April 4 Housing Matters Newsletter

Welcome to the Housing Matters Newsletter! 

This week, the House Finance Committee finalized its version of the state budget (House Bill 1 and 2). The House version of the budget will go to the floor for a full House vote next Thursday, April 10th. 

As we’ve discussed, and you may have seen in news coverage, this is a tough budget year with revenues coming in below projections and the expiration of federal dollars. Given the difficult fiscal environment, there are some highlights and lowlights for housing advocates in this budget. 

Increasing Housing Supply via Financial Incentives

• 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 state law requires that $5 million collected from the Real Estate Transfer Tax be appropriated to the Affordable Housing Fund each year. House Bill 530 and Senate Bill 81 sought to double the annual allocation to $10 million per year. The House Finance Committee did not include the increase in the budget.
• 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, including housing development and rehabilitation. Existing state law includes $5 million in tax credits. Senate Bill 158 sought to double the annual tax credits to $10 million. The House Finance Committee did not include the increase in the budget.
• 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.” Governor Ayotte proposed extending the lapse date (when the funds need to be spent), given that the new program was in rulemaking from much of last year. The House Finance Committee removed the extended lapse date and did not include any new funds for the Housing Champions Program.

• 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. Governor Ayotte proposed $8 million per year in emergency shelter funding, which would maintain the existing funding levels. The House Finance Committee maintained this funding level. Senate Bill 113 would increase the funding to $12 million per year; it was tabled in the Senate for consideration in the budget.
• Homeless Prevention: The Department of Health and Human Services’ Homeless Prevention Program provides rental assistance and supportive services to help prevent households from entering homelessness. The House Finance Committee maintained Governor Ayotte’s appropriation.

• 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. Governor Ayotte’s proposal streamlined approvals through a 60-day timeline and consolidated oversight to the Department of Environmental Services and Department of Transportation. The House Finance Committee maintained the Governor’s permitting reform. 

The House Finance Committee included a number of other policy and budget changes in House Bill 1 and 2 that impact housing. These changes include:

• Eliminating Regional Planning Commission Funding: The House Finance Committee cut the planning administration grants for the RPCs ($100,000 per year) from Governor Ayotte’s proposed budget. These grants, administered through the Department of Business and Economic Affairs, provide $11,000 in funding to all nine regional planning commissions. These funds often leverage federal dollars. The RPCs assist communities with technical assistance and long-term planning. In smaller communities without full-time planning staff, they serve as the town staff. 
• Partners in Housing Program: The House Finance Committee included elements of HB 572 into HB 2. This proposal would simplify the process for communities to develop municipally owned land into housing and create a program within the Housing Champions Program at BEA to assist in the funding of this development. The proposal in HB 2 established the program, but did not fund it.
• Renewable Energy Fund (REF): The House Finance Committee transferred all funds in the Renewable Energy Fund to the General Fund. The REF, through SB 129 (2017) and multiple updates signed by Governor Sununu, includes a low-moderate income solar program designed for developments serving people at or below 300 percent of the poverty level. In recent years, Catholic Charities, Lakes Region Community Developers, Keene Housing, and multiple manufactured housing cooperatives have utilized this program to provide low-cost energy to residents.
• No-Cause Eviction (HB 60): The House Finance Committee included HB 60, which allows for evictions at the end of lease term without cause, in House Bill 2. There is no budget implication, but the Finance Committee deemed it a policy priority.
• Eliminated the Housing Appeals Board; Created New Commercial Court Docket: The House Finance Committee created a new Commercial Court Docket and repealed the Board of Tax and Land Appeals, the Housing Appeals Board, and the Human Rights Commission, placing those functions all into the new docket. The priority for Housing Action continues to be reducing unnecessary delays, which the Housing Appeals Board has successfully accomplished.

As always, if you have questions about the legislation we mention in the newsletter or housing-related proposals that aren’t included, please don’t hesitate to reach out.

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Best,
Nick Taylor

Please voice your support for allowing homes to be built near jobs!

House Bill 631, as amended, would allow multi-family housing on land zoned for commercial activities such as retail and office space. This proposal will help revitalize aging strip malls and underutilized office space, and allow for more vibrant main streets where Granite Staters can live and work. It encourages new housing options where there is existing infrastructure and jobs.

Please support HB 631 online here by selecting Thursday, 4/10 -> Commerce Committee -> HB 631.

Check out our one-pager on HB 631!

The committee rooms are back in full swing as we pass the midway point in the legislature. 

House Housing Committee: Tuesday, April 8th, LOB Room 305

10:00 am — Senate Bill 173, relative to residential property subject to housing covenants under the low income housing tax credit program.

• What The Bill Does: This bill establishes a clear formula for assessing the value of Low Income Housing Tax Credit (LIHTC) housing developments.
• Why It Matters: LIHTC developments have strict affordability requirements to serve lower income earners. This important role they play in the housing market means that the value of the development is less than a typical unrestricted, market-rate development; however, when assessed for property tax purposes, these developments can end up paying market-rate property taxes. This bill, which is the result of years of work from the Assessing Standards Board, would create a clear assessing standard that factors in the affordability restrictions.

1:00 pm — Senate Bill 282, relative to stairway requirements in certain residential buildings.

• What The Bill Does: This bill would modify the state building code to allow for additional multi-family designs with one staircase. 
• Why It Matters: Building code requirements along with local zoning requirements are the key drivers in what type of housing is allowed to be built and what it looks like. One requirement is that buildings have two exit stairways that are accessible from all points on each floor. This limits the range of sizes and floor plans available to architects and developers – and the data shows that is doesn’t have an impact on safety. Read more about single-stair reform here. 

2:00 pm — Senate Bill 284, relative to the required maximum number of residential parking spaces

• What The Bill Does: This bill limits residential parking spaces to one per unit with exceptions for certain workforce housing and multi-family developments, where the limit that can be required is 1.5 spaces per unit.
• Why It Matters: Parking requirements are often one of the key limiting factors for housing development. They can create seas of pavement or lead to expensive garages that drive the price of the home up. Parking reform doesn’t lead to no parking, it leads to right-sized parking that fits the unique needs of each development.

• What The Bill Does: This bill would allow multi-family residential uses in areas zoned for retail and office space. 
• Why It Matters: The idea behind allowing residential uses in commercial zones is that it encourages homes to be built near jobs and focuses development to areas with existing infrastructure. 

10:30 am — House Bill 410, limiting local authority to adopt restrictions on the building and development of residential properties.

• What The Bill Does: This bill prohibits “extraordinary restrictions of residential property” by municipalities and creates a list of restrictions that are deemed to be extraordinary, including certain restrictions on lot sizes, residential use in commercial zones, off-site construction, and more.
• Why It Matters: The objective of this bill is to limit overburdensome restrictions on personal property and return the primary purpose of zoning to a compelling health or safety interest.

The House of Representatives will convene for session on Thursday, April 10th. The state budget bills, House Bill 1 and House Bill 2, are the key votes next week.

The Senate will next convene for session at the call of the Senate President (likely 4/10 or 4/17).

The House and Senate were not in session last week.

UNION LEADER – In a new poll, more than three-quarters of those surveyed support lawmakers passing four housing bills to set smaller house lot sizes, mandate allowing accessory dwelling units, favor residential apartments in commercial zones and eliminate community-wide parking space requirements.

Housing Action N.H. reported that in its poll nearly six in 10 (59%) support building more housing, even if it would mean reducing local control over that development.

“The message is clear: New Hampshire is experiencing a severe housing shortage that is being felt from southern New Hampshire to the North Country and all across the state. Voters support solutions to our housing shortage,” said Nick Taylor, Housing Action N.H.’s director.

“These results show that a significant majority of New Hampshire voters support proposals currently in front of the Legislature this session, and we urge them to pass these proposals quickly to begin addressing the housing shortage.”

YouGov conducted the poll for Housing Action, surveying 406 registered voters from March 3-10. The survey has a margin of error of plus or minus 6%.

The proposal that received the most support (88%) was to permit apartments to be sited on the second floor of buildings in any commercial zone (HB 631).

Only 7% opposed the idea and the rest (5%) were undecided.

The accessory dwelling units legislation (HB 577) had the backing of 76%, as did the requirement that at least half the new residential units in a community be built on smaller lot sizes (SB 84).