Study: strict local land regulations responsible for NH housing shortage

  • In this June 24, 2021 photo, lumber is piled at a housing construction site in Middleton, Mass. Rising costs and shortages of building materials and labor are rippling across the homebuilding industry, which accounted for nearly 12% of all U.S. home sales in July. Construction delays are common, prompting many builders to pump the brakes on the number of new homes they put up for sale. As building a new home gets more expensive, some of those costs are passed along to buyers. (AP Photo/Elise Amendola) Elise Amendola

Monitor staff
Published: 10/12/2021 5:26:57 PM

New Hampshire’s rising housing costs can be blamed on local residential regulations, according to a new study from the Josiah Bartlett Center for Public Policy, a free-market think tank.

Jason Sorens, the Director of the Center for Ethics in Society at St. Anselm College, conducted a recently released research report that shows local housing rules like zoning, subdivision regulations and building codes have played a role in making housing more scarce and costly in New Hampshire.

“Why have house prices and the prices for rental properties increased so much in New Hampshire, especially over the last two decades?” Sorens said. “The answer, spoiler alert, is that it’s mostly residential land use regulation, which is consistent with what economists have found nationwide.”

Sorens presented his findings at an event at the Doubletree by Hilton in Manchester on Tuesday, followed by a panel discussion with Sarah Marchant, Nashua’s community development director and N.H. Housing Managing Director of Policy and Public Affairs Ben Frost, moderated by Josiah Bartlett Center President Andrew Cline.

Sorens’ peer-reviewed model estimated the strictness of New Hampshire regulations by estimating what a house in a particular area “should” cost and then subtracting that number from the actual price. He also accounted for population growth in a given town.

These strict regulations may have emerged for a variety of reasons over the past few decades, but many policies are “rent-seeking and exclusionary,” meaning property owners keep supply low despite growing demand so that the value of homes can increase.

“This is zoning where ‘we’ve seen people want to move to our town, we can really jack up the prices of our houses,’ ” Sorens said. “We’re gonna make a lot of money as homeowners, and maybe a side benefit of this is we keep those people out of our neighborhoods, our schools, so this can be allied with racist and classist motivations.”

In Brookline, a lawsuit filed last month accuses the mostly-white town of being racially discriminatory when it rejected a proposal to build a new 80-unit townhome development meant to serve low-income families.

“Many community members expressed opposition to the proposed workforce housing community using racially charged language and employing insidious racial stereotypes and code words about the types of tenants who would live in affordable housing,” the lawsuit states.

Some towns have also ramped up their housing regulations in reaction to the policies of neighboring communities, creating an “arms-race” that makes it more difficult to build new housing.  

Regardless of motive, some of the consequences of these policies, which Marchant and Frost later referred to as “not in my backyard” or NIMBYism, include economic and racial segregation, the departure of young people and families, and unequal educational outcomes. 

Policy solutions to the problems identified in the report range from changes to local policies that loosen requirements like setbacks and lot size to state-level proposals, like legislation that would offer homeowners compensation for regulation that negatively impacts property values.

The report also recommended that the state decentralize planning authority and give power to individual neighborhoods – or allow for regional multi-community planning compacts.

Nashua has modified its own zoning ordinances to be “form-based”, which Marchant explained as a way of maintaining some visual consistency without imposing detailed setback or frontage requirements. Instead, new buildings that meet basic standards can skip a long planning process.

“So with form-based, you regulate the public space, and what happens behind private is private, you do that to make a form that feels comfortable,” Marchant said.

The report also showed some of the municipalities with the most restrictive land use policies were in areas with wealthier populations in the Seacoast and Upper Valley regions, with towns with more permissive rules located along the “inland Appalachian trail.” The top three municipalities with the most restrictive land use policies were New Castle, Rye and Portsmouth.

During the Q&A portion, one attendee from a town of about 5,000 people asked about the tax burden associated with school-age children.

“What we’re deathly afraid of is a family with two kids moves into town, and adds $30,000 to our costs of schools, and pay $7,500 in taxes,” he said. 

Cline said that New Hampshire had lost 25,000 public school students in the last 13 years as enrollment drops, meaning that even new multi-family housing won’t overwhelm taxpayers. “It’s a myth that kids are going to drive up the tax rate,” Cline replied. 

Some communities have recognized the impact of older anti-growth policies and are working to reverse them, Frost said. 

“There are a lot of communities that are doing a good job, some of which haven't gotten there yet,” he said. “For years, Londonderry was one of the most exclusionary communities in the state. And 15 years ago, they recognized they had a problem, they did something about it.”

Cities like Keene and Dover have also taken steps to make it easy to create new housing, but some of the biggest obstacles exist for small towns that lack paid staff with the time to analyze and tweak planning rules. 

“You need to invest - our small towns need to put some investment,” Marchant said. 

Cassidy Jensen bio photo

Cassidy Jensen has been a reporter at the Monitor, covering the city of Concord and criminal justice, since July 2021. Previously, she was a fellow at the Toni Stabile Center for Investigative Journalism at Columbia University, where she earned a master's degree. Her work has been published in Documented, THE CITY, Washington City Paper and Street Sense Media. When she's not at City Council meetings, you can find her hiking in the White Mountains.

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