Housing in the New Hampshire State Budget: House Finance Memo

To: House Finance Committee
From: Housing Action NH
Date: March 12, 2025
Re: Housing in the New Hampshire State Budget

Housing Action NH is a statewide advocacy organization dedicated to promoting policies that increase access to housing. Our members include housing developers, landlords, lenders, property managers, homeless service providers, and others.

New Hampshire is facing a housing shortage that is driving up costs. Our housing shortage prevents everyday Granite Staters from having a place to live in our communities. It also forces seniors out of the communities they’ve called home, prevents the workers our economy relies on from finding an affordable place to live, and hurts the lowest-income earners the hardest, increasing homelessness. 

New Hampshire Housing’s 2023 Statewide Housing Needs Assessment found that the state needs an additional 60,000 homes of all types and income levels to meet current and future needs. 

The New Hampshire state budget is critical in addressing our state’s housing shortage and increased homelessness. We ask that you support:

1. Increasing the supply of affordable housing through financial incentives; 
2. Supporting housing stability through state homeless shelter contracts and eviction prevention funds, and; 
3. Maintaining the permitting policy changes included in Governor Ayotte’s budget.

Increasing the Supply of Affordable Housing

Affordable Housing Fund: The Affordable Housing Fund (AHF) has been a crucial tool in financing affordable housing since 1988, leveraging more than $500 million in private dollars to create or preserve 3,600+ housing units statewide​. Existing New Hampshire state law (RSA 78-B:13,III) allocates the first $5 million collected through the Real Estate Transfer Tax to the Affordable Housing Fund. This provides critical predictability for the fund as the non-profit and for-profit developers who utilize the affordable housing fund benefit greatly from predictability as it can take months, if not years, to secure all necessary financing and approvals. 

• Budget Request: The Senate unanimously passed Senate Bill 81 out of the Commerce Committee, and it is now under consideration by the Senate Finance Committee. SB 81 would increase the annual allocation from the Real Estate Transfer Tax from $5 million to $10 million and make a one-time $25 million appropriation to the Affordable Housing Fund. Housing Action NH requests that you consider these appropriations in the House Budget, prioritizing the sustained, predictable funding provided through the Real Estate Transfer Tax allocation.

Community Development Finance Authority Tax Credit: The Community Development Finance Authority (CDFA) Tax Credit Program is a proven public-private partnership that generates over $11 million in economic activity annually​. While CDFA tax credits can be used for projects other than housing, this program is a critical tool for redevelopment, particularly for historic buildings.

• Budget Request: The Senate unanimously passed Senate Bill 158 and tabled it for consideration in the budget. SB 158 would double the annual tax credit availability from $5 million to $10 million, which would impact revenues by $3.75 million. Housing Action NH requests that you increase the CDFA tax credit program from $5 million in annual credits to $10 million. 

Housing Champions Program: The New Hampshire Housing Champion Designation and Grant Program, established by the state legislature with $5 million in funding in the last biennium, encourages municipalities to promote housing by offering benefits to those designated as “Housing Champions.” Communities achieving this designation become eligible for infrastructure improvements and housing production grants. To qualify, municipalities must demonstrate that their zoning and land use regulations support workforce housing, provide training for land use board members, implement sewer and water infrastructure enhancements, and develop public transportation and walkability features like sidewalks. As of 2024, 18 municipalities across the state have received the Housing Champion designation.

• Budget Request: The Governor’s budget proposal extended the lapse date for FY 24-25 Housing Champions funding to ensure a thoughtful distribution of existing funds, given that this new program was in rulemaking for much of the last biennium. Housing Action NH requests that the House maintain the amended lapse date and appropriate an additional $5 million into the Housing Champions Program to sustain funding for the FY 26-27 biennium. 

Supporting Homeless Services and Housing Stability

Homeless Service Contracts: The state of New Hampshire assists in the funding of 13 emergency shelters, which serve Granite Staters who have no other place to turn for shelter. The urgent need for these shelters has increased in recent years with the overall increase in homelessness. According to DHHS, there were 2,432 Granite Staters served through the emergency shelter program. This includes 682 residents enrolled in the families with children category. State funding does not cover the entirety of operating expenses with shelters raising, in some cases, over $500,000 in additional funds.  

• Budget Request: The Senate unanimously passed and tabled Senate Bill 113 for consideration in the budget. This bill allocates $12 million per year for emergency shelters. Governor Ayotte proposed $8 million per year in emergency shelter funding, which would maintain existing funding rates. Housing Action NH requests that you maintain the existing funding rates and consider increasing support to keep up with increased overall operating costs. 

Homeless Prevention: The Department of Health and Human Services’s Homeless Prevention Program provides rental assistance and supportive services to help prevent households from entering homelessness. Emergency shelters are expensive, and eviction can disrupt learning and employment. According to DHHS, there were 1,432 enrolled Granite Staters in funded prevention and housing stabilization projects in 2024. 89.9% of program exits lead to permanent housing.

• Budget Request: The Senate unanimously passed and tabled Senate Bill 113 for consideration in the budget, which would allocate $3 million per year to DHHS for its housing stabilization programs. Housing Action NH requests that you fund these programs at $3 million per year. 

 Cutting Through The Red Tape

Permitting Reform: Developers seeking to build more housing in New Hampshire often work with as many as four different state agencies: the Department of Environmental Services, the Department of Transportation, the Department of Natural and Cultural Resources, and the Fish and Game Department to secure necessary permits. Each department, while well-intentioned, has its timeline, approval process, and points of contact. The permitting reform included in Governor Ayotte’s budget is a significant positive step in treating our housing shortage with the urgency it needs and creating more predictability for developers. 

• Budget Request: Maintain the permitting reform included in Governor Ayotte’s budget. This reform streamlines approvals by creating a 60-day timeline and consolidating permitting oversight between the Department of Environmental Services and the Department of Transportation.

Conclusion

To address New Hampshire’s housing shortage and increasing homelessness, we need a comprehensive approach that addresses immediate shelter needs and increases the number of homes at all income levels. These policies would complement each other and have a significant positive impact on our economy and our communities.