New Hampshire’s August unemployment rate was 2.7 percent. Employers from high-tech manufacturers to fast-food restaurants are flying “help wanted” signs. Waits for service are longer. Finding someone to do home repairs can be a full-time job. Everyone in the trades is flat out and booked far ahead.
The shortage of workers means existing companies can’t expand and new employers can’t move to New Hampshire. The labor shortage, economists warn, has become a drag on economic growth. The reasons are many but two are paramount – demographic trends and a critical shortage of affordable housing.
The state is the nation’s second oldest. Retiring boomers are not being replaced in equal number by new workers. The construction industry alone lost 1.5 million workers during the last recession. There are fewer high school graduates, and they are avoiding jobs in the trades. Demographers estimate that the state’s high school population will drop by 27 percent over the next two decade
Graduates of New Hampshire’s many colleges, both native born and out-of-staters, move away but often fail to return or are stymied by housing costs when they try to do so. Pay, in a state that still relies on the federal minimum wage of $7.25 per hour, has not kept pace with rents or home costs. It’s reached the point where some employers, among them Dartmouth-Hitchcock Medical Center, are debating whether to build company-owned housing.
There is, as many have pointed out, a disconnect between the housing older owners have, big three- and four-bedroom homes, and the housing younger workers and their families want or can afford. People now want to live close to services in the center city, but a diminishing supply of land and high construction costs have driven up the price of even modest dwellings, which aren’t being built in great numbers because there’s more profit in building big homes.
The state’s extreme reliance on property taxes to fund government makes the problem much worse.
The tax bill on the median price home in Concord, $227,000 according to Zillow, tops $6,000 per year or $500 per month. Property taxes add hundreds of dollars per month to rental costs.
Concord has done more than most places to create and maintain a mixed housing stock that includes affordable options. But more than 200 units of housing in Concord’s downtown have either been recently built or are under construction or in the works. All will be sold or rented at market rates, which means upward of $1,200 per month for a two-bedroom apartment. That’s good news for the downtown and proof that the city’s investment in its Main Street was a wise one. What isn’t being built on any scale is affordable housing.
Plenty of smart people – planners, economists, housing experts, builders and others – have worked for decades to find an answer. The solutions of the past, vast Levittown-style bungalow developments, towering housing projects or cheek-to-jowl triple-deckers, either won’t work or people don’t want to live in them.
Last year, the Legislature passed a bill that requires municipalities to permit the addition of an accessory dwelling unit, once called a mother-in-law apartment, to increase housing availability. So far, it’s had little effect.
What can be done, or at least tried? Zoning laws, building codes and other impediments to affordable housing should be revisited. Unused city and state land could be sold at a discount to providers of workforce housing. Incentives to create age-restricted housing, where they exist, should be replaced by incentives to create mixed-use housing. What’s unlikely to change, at least in the foreseeable future, is the state’s reliance on property taxes and the federal government’s reluctance to subsidize housing for the less well-off. The answer, for now, lies in local and regional efforts to address the shortage.