For anyone in the market for a new home, it will come as no surprise that housing inventory in New Hampshire is at a historic low, and that should be of real concern for policymakers in Concord, and not just because of the obvious correlation between fewer home sales and less tax revenue.
Perhaps even more significant from a long-term standpoint, without adequate housing, the ease with which prospective workers can move into the state decreases, creating a serious impediment to our state’s economic growth.
The statewide inventory of housing for sale is at its lowest level since the New Hampshire Association of Realtors has tracked that data point, and it’s getting worse. Currently, the inventory of homes for sale is down a significant 32 percent from the past year.
There are many reasons for the low inventory, but undoubtedly a huge factor is the lack of new housing being built in our state. While one might logically assume that with prices trending up and inventory down there would be more activity among developers and more housing starts, it is not happening.
Why not? A big part of the problem is unnecessary town regulations and a general lack of interest to encourage, or in many cases even allow, developers to build more densely.
The result: A study by the National Association of Realtors shows that new housing starts in New Hampshire are nowhere near where they need to be to keep up with demand.
For example, Rockingham County would have needed 1,990 new housing units to keep up with demand in 2015, yet only 1,041, or just over 52 percent, were authorized by local municipalities in the county. It was even worse in our state’s largest county, Hillsborough, where only 45 percent of the 2,044 recommended housing starts were authorized. Here in Merrimack County, the study found that 780 housing units would have kept up with demand in 2015, and just 378 (48 percent) were, in fact, authorized.
And though the most recent National Association of Realtors study only takes us through 2015, at least anecdotally we are not sensing much of an improvement since then.
Here’s the danger: Without a change in our state’s mindset toward housing, New Hampshire’s economic development is in jeopardy. Middlesex County in Massachusetts and Cumberland County in Maine, both looming on the New Hampshire border, are examples of areas doing a better job of allowing – and ultimately building – new housing, and those areas are therefore better situated to compete for new businesses.
While New Hampshire towns are more likely to lay out the welcome mat for a new office park or retail development, too often these very towns turn their backs when a multi-family housing project – one that would potentially provide decent and affordable housing to those new workers – is proposed.
Businesses and their employees generally are not looking for 19th-century Victorians or 1960s-built ranches. More likely, they want new construction located in or near more urban amenities. New Hampshire is not, on the whole, providing that as a viable housing option.
When towns and cities across the state put up roadblocks to new construction, it only leads to sprawl and eventually the unnecessary encroachment on our natural resources. That outcome might work for an older, retired resident, but it is not a vision that will create economic growth.
Politicians cannot be in favor of economic growth while doing nothing or, even worse, restricting the ability to create housing options that workers need.
The Office of State Energy and Planning estimates that New Hampshire’s population will increase by 100,000 over the next 25 years. Without that population growth, our economy will stagnate. The state needs to understand and plan for where its residents are going to live.
The lack of inventory may be great for today’s spring sellers, but public policymakers need to understand that it will have significant impacts on tax revenues and economic growth for many springs to come.
(Rachel D. Eames is president of the New Hampshire Association of Realtors.)