Surging rents point to migration

  • Concord Housing + Redevelopment recently purchased 10-12 S. State St., pictured here, as well as the Four Wall Street building in Concord. The area around Pleasant Street has attracted the interest of developers, who will be adding dozens of apartments to the downtown. Caitlin Andrews

Seacoastonline.com/Fosters.com
Published: 10/18/2020 8:12:42 PM

Rockingham, Hillsborough and Strafford counties have seen close to a 30% increase in the median rent for a two-bedroom unit over the last five years.

That’s according to a housing market report released this month by the New Hampshire Housing Finance Authority, showing Rockingham County at a 28% increase and Strafford and Hillsborough counties at 26%. Merrimack County’s increase during that span is 14%, and the statewide increase is 22%.

Rising rents are occurring with a predicted migration of Boston area workers to New Hampshire, now that many companies have implemented work-from-home policies for the foreseeable future. There’s likely to be an impact on the Granite State’s housing market as a result, the report notes.

Russ Thibeault, founder of Applied Economic Research, wrote in the NHHFA report that with COVID-19 work-from-home policies “cutting the umbilical cord to expensive housing and work space in and near Boston,” it’s likely New Hampshire will see more migration into the state.

That’s a good thing, Thibeault said, but the state needs additional affordable housing infrastructure if it wants to accommodate that migration.

Thibeault said affordable housing was not cited as one of the top factors attracting migrants to New Hampshire, “meaning that it is mostly those with higher incomes who can afford to move here.” That ultimately will pose a major issue for the expansion of the middle-income labor force, he said.

Sarah Wrightsman, executive director of the Workforce Housing Coalition of the Greater Seacoast, said a migration of workers from the Boston area would add “an interesting layer to the housing puzzle.” She noted what some New Hampshire residents might consider “luxury” housing, is affordable to those living on Boston salaries.

“From what I’ve seen, it seems to be driving demand for luxury housing,” Wrightsman said. “I personally know a young professional who earlier this year brought his Boston salary up to New Hampshire. He is renting a luxury unit in downtown Portsmouth that is less expensive than his apartment in Boston and is affordable to him.”

Wrightsman said other communities are using this trend to make the case for more market rate or luxury housing – rather than affordable housing for local workers.

Data from the NHHFA report doesn’t show an increase in people from Massachusetts purchasing homes in New Hampshire. The number of homes purchased in New Hampshire by Massachusetts buyers is slightly less than this time period last year.

Economic indicators show household income in New Hampshire has increased over the past five years, the report states, but may be starting to slow seven months into the COVID-19 crisis.

Currently, the average rent of a two-bedroom unit in Rockingham County is $1,623, and in Strafford County, it’s $1,291. Those units average $1,534 in Hillsborough County and $1,206 in Merrimack County.

Rockingham has the highest median list price for a single-family home at $475,000. Strafford is fifth at $319,000. Merrimack County is third at $349,000 and Hillsborough is eighth at $265,000. The statewide median is $359,900.

Home For All Director Paige Farmer said the federal moratorium on evictions is also a challenge.

“There’s a lack of movement right now just with the extended moratorium on evictions,” said Farmer, whose organization was formerly the Greater Seacoast Coalition to End Homelessness. “We’re seeing because of that average rent ticking up a bit. Conversely, we don’t want to see people evicted to loosen up the rental market. It’s a little bit of a catch-22 there.”

While the pandemic accelerated the housing crisis, Wrightsman noted “New Hampshire’s housing market was already headed in this direction.”

“We desperately need more units that are affordable to members of the workforce,” she said. “Every time I hear an existing business is expanding or a new business is putting down roots here, I ask, ‘Where will the workers live?’”

Wrightsman said New Hampshire needs more units, “period.” She cited cottage clusters, duplexes, rentals, accessory dwelling units and starter homes. “We need all of them and we need every community to help because we have a supply problem,” she said.

As reflected in NHHFA’s report, Wrightsman noted New Hampshire dropped to less than one month of home supply at or below $300,000 in September, “meaning that if the market continues at the same pace, but no new houses are added, we’d be completely out of inventory in one month.” In a healthy market, there would be five or six months of home supply, she said.

These articles are being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org. 




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