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Increasing rents in N.H. are an obstacle to retaining young workers

  • A “for rent” sign is seen outside a home on Washington Street in Concord on Wednesday, July 12, 2017. (ELIZABETH FRANTZ / Monitor staff)

  • A “for rent” sign is seen outside a home on Washington Street in Concord on Wednesday, July 12, 2017. (ELIZABETH FRANTZ / Monitor staff)

  • The median cost of a two-bedroom apartment, including utilities, in Concord, Merrimack County and statewide. NICK REID—Chartbuilder

  • The vacancy rate of two-bedroom apartments in Concord, Merrimack County and statewide. NICK REID—Chartbuilder



Monitor staff
Wednesday, July 12, 2017

Finding an affordable place to live is one of the major challenges to New Hampshire’s ability to retain and attract young workers.

And it may be getting more difficult as rental units become increasingly expensive and scarce, according to a report released this week by the New Hampshire Housing Finance Authority.

The housing authority’s annual survey found that the average renter of a two-bedroom apartment in Merrimack County will pay $672 more this year for rent and utilities compared to last year. Rising by 5 percent, median rents in the county outpaced the 4 percent increase statewide.

At $1,176 a month for a two-bedroom unit, median rents here are still cheaper than in Rockingham and Hillsborough counties, but apartments are equally hard to find. The vacancy rate, which was already extraordinarily low, continued its eight-year slide to 1.1 percent, lagging behind the state average of 1.4 percent.

As the CEO and president of Stay Work Play, a nonprofit dedicated to attracting and retaining young workers, Kate Luczko said these factors are a growing concern. Seven years ago, she said, the chief complaint was about the availability of jobs, but increasingly it’s related to housing.

She said she hears stories about young adults who are forced to decide whether they’ll take a job offer in New Hampshire, where they’ll have to live with their parents, or go elsewhere and rent an apartment on their own.

“It makes the decision more difficult. It’s not cut and dry,” Luczko said. “We run into a lot of people who want to stay here, but when it comes down to it, they have to be able to find income and they have to be able to find a place to live.”

A pressurized market

Whether it’s because they can’t afford it or they don’t want to, young people have delayed buying homes since the recession compared to other generations, said Phil Sletten, a policy analyst for the New Hampshire Fiscal Policy Institute.

That may put more pressure on the rental market, he added, which could be a deterrent for workers who are considering moving into the state.

“If we’re looking to attract young people to New Hampshire, then for folks who are not ready to buy a house ... they may be attracted by, ‘Alright, here’s a rental unit I can afford. I’ll try out this job. I’ll try out this state. I’ll see how well it works out for me,’ ” Sletten said.

That scenario can be short-circuited if there’s nothing available in the area where the person is considering moving, or the options don’t meet their needs.

While New Hampshire is a relatively high-income state, perhaps well-positioned to afford high rents, many of the new jobs that are being created are in low-wage industries such as retail and food service.

“The fastest growing occupations in the state pay wages that make higher rental prices harder to absorb,” Sletten said.

New Hampshire’s low unemployment rate means that it can make use of new workers, especially in its growing fields, but the workers may find more favorable situations elsewhere – for instance, in metro Boston, where the minimum wage is 34 percent higher and the public transportation is more viable.

“You can imagine a situation where rent may be higher in a more urban area, but it’s not dramatically higher, and maybe they don’t need a car,” Sletten said. “In New Hampshire, they wouldn’t be able to make that trade-off.”

Hard to absorb

In Merrimack County, the median rent of a one-bedroom apartment, including utilities, was on par with the state average at $936.

Using the typical benchmark of 30 percent of income for rent, a person would need to earn $37,440 to afford that average one-bedroom apartment. That’s $18 an hour, assuming 40-hour work weeks. The comparable figure for a two-bedroom is about $23 an hour, which was almost exactly the average wage earned in Greater Concord last summer, according to a New Hampshire Employment Security study.

But the reality for renters is not so rosy.

The National Low Income Housing Coalition estimates renters’ incomes using census data. Statewide, the average renter earned $14.75 an hour, and in Merrimack County, the comparable figure is $12.32.

Accordingly, the state’s housing finance authority found in a 2014 study “that almost half of renters in the state pay more than 30 percent of their income on rent, and low-income families are particularly likely to be paying this much or more for their housing.”

To pay the median rent on a one-bedroom, without breaking that 30 percent threshold, while earning the average wage, a worker in Merrimack County would have to put in nearly 60 hours a week. At minimum wage, it’d be almost 100 hours.

This most recent data on rental costs in New Hampshire was collected by the University of New Hampshire Survey Center by polling the owners and managers of more than 26,000 unsubsidized rental housing units statewide, New Hampshire Housing said.

(Nick Reid can be reached at 369-3325, nreid@cmonitor.com or on Twitter at @NickBReid.)