This article, written by attorney Chloe Golden, was originally published by the NH Union Leader and can be found here.
For many years, housing production has failed to keep pace with job growth in the Granite State, making recruiting and retaining new workers increasingly difficult.
In 2023, the New Hampshire legislature recently established an incentive program to drive workforce housing development and funded the program with $5,000,000 in grant funds.
The voluntary Housing Champion Designation and Grant Program (RSA 12:O-71-76) rewards housing friendly regulations and infrastructure through special funding sources.
The NH Department of Business and Economic Affairs is responsible for administering the designation program. Recently, they have opened the application and adopted regulations to administer the program in its first year.
The program could reduce costs to developers, encourage forward-thinking infrastructure development and create new housing.
Workforce Housing
Although the Program encourages many forms of new housing, it prioritizes workforce housing development. Housing Champions must promote and permit housing that is primarily two-bedrooms or more and affordable based on a statutory formula. For home ownership, that means annual mortgage payments, real estate taxes and insurance premiums are one third of income for a family of four making 100% of area median income. For renters, affordable means rent and utilities total a third of income for a family of three making 60% median income.
Designation and Benefits
Three elements of the program reward towns for promoting—and approving—affordable, workforce housing.
1. Designation
By earning the Housing Champion designation, municipalities that have committed to increasing housing development in their community become eligible for two additional sources of funds— infrastructure funding and per-unit production grants. To qualify for the designation, communities will:
• Adopt zoning, site plan, and other land use regulations that promote workforce housing
• Train members of land use boards on appropriate procedures, and laws that apply to board members
• Implement sewer and water infrastructure improvements
• Implement public transportation and walkability infrastructure like sidewalks
NH BEA’s scoring matrix measures municipality against these requirements and adding two optional categories to scoring, including rewarding towns that have provided financial incentives for housing development. The application and more information can be found on the agency’s website.
2. Infrastructure Funding
A common concern facing municipalities considering workforce housing is the overburdening of existing infrastructure. Likewise, lack of infrastructure may deter developers from even considering communities. RSA 12-O:73 should mitigate this problem by providing designees with grants or low interest loan programs to expand infrastructure and accommodate new housing. Unfortunately, the infrastructure grant program is not yet funded.
3. Housing Production Municipal Grants
Finally, the program pays for actual production, awarding grants on a per-unit basis for certificates of occupancy that a town issues for workforce housing units.
The success of the Housing Champion program, of course, depends on implementation. Full funding of the grant programs is essential to incentivize municipalities to participate in the first place.