MANCHESTER, NH – High rents and low vacancy rates continue to plague New Hampshire’s rental housing market. The New Hampshire Housing Finance Authority recently released their New Hampshire Residential Cost Survey Report, which shows that vacancy rates in Hillsborough County remain low at 2.3 percent, a 5 percent rate is considered manageable. In Manchester, the median rent for a 2-bedroom apartment has risen from $1,406 in 2019 to $1,483 in 2020.
In September Mayor Joyce Craig established an Affordable Housing Taskforce to look at potential solutions to the city’s shortage of affordable housing. They held their second public meeting on October 21 where each of the three subcommittees reported back on their discussions. The meetings are broadcast live on Manchester Community Television.
According to the City’s recent Consolidated Plan Report, Manchester has 48,969 housing units, of those, nearly a third were built before 1939. From 2000 to 2010 the city added 3,235 units. Since 2010 only 822 additional units have been constructed.
The Zoning, Regulations and Land Use group noted that there are not many large, undeveloped parcels left in the city. One suggested solution to the housing shortage is infill development where builders are encouraged to construct smaller, individual projects on smaller lots.
However, local regulations present significant barriers to redevelopment, particularly in older parts of the city. For most of the city’s history the required size of a building lot was 5,000 square feet. Current regulations require 6,500 square feet. When one of these older lots becomes vacant, it is impossible to redevelop it without going through a cumbersome permitting process.
The city has identified 74 vacant or blighted buildings in the city. Some have been resolved, others have been slated for demolition. The remaining 58 properties contain 93 units that could be added to the city’s inventory of rental housing and returned to the tax rolls.
Local regulations regarding fire damaged buildings give the owner 12 months to rehabilitate a building without requiring a lengthy permitting process. The committee noted that insurance settlements can take a long time to resolve and after 12 months many owners prefer to just take the insurance payout and forget about restoring the building.
Removing some of these barriers represents simple steps the city could take to encourage more development on inner-city lots.
During the meeting it was noted that changing regulations, offering density bonuses, waiving parking requirements, and other incentives discussed by the taskforce might encourage new development, but it is not a guarantee that any new units would be affordable.
Public resources to build affordable units are limited and the current market rates are so lucrative most private developers would have little interest in building them.
The Incentives and Funding Committee suggested that the City of Manchester adopt a goal of creating 100 new units of affordable housing each year for five years. These units would be made available to households making less than $35,000 a year, which is 60 percent of the area median household income. After adopting this goal, the Board of Mayor and Aldermen would use it as one of the criteria for making CIP funding decisions.
The taskforce will hold their final meeting on November 18. Individuals who would like to submit public comment can do so by emailing Shannon MacLeod, Policy Director, Office of the Mayor at smacleod@manchesternh.gov.
