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Primary Residence: New Hampshire

Primary Residence is an in-depth look at housing policy and its critical importance for voters in Democratic primary states, in the lead up to the 2020 Presidential election.  In this inaugural edition, we speak with Nick Norman, Director of Legislative Affairs and Government Affairs Chair, Apartment Association of New Hampshire (AANH), about the state’s housing crisis, where lawmakers are getting it right and getting it wrong and which candidate might take top marks.

Home to the nation’s first primary, immediately following Iowa’s caucuses, New Hampshire plays an influential role in determining the nominees for President of the United States. The tax-free state is not particularly delegate-rich nor is it widely representative of the diversity of the United States. However, the outcome of the state’s primary election has correctly identified Democratic and Republican nominees 17 times since 1972. A political crystal ball of sorts, candidates flood the state early on in their campaigns with the hope of translating hundreds of rallies, meet-and-greets and selfies into genuine electability.

Housing remains a critical issue to voters in New Hampshire, as residents grapple with an affordability crunch caused by a significant lack of housing and amplified by misguided public policy introduced in the state legislature. New Hampshire faces a housing shortage that will require close to 1,000 new apartment homes to be developed annually to meet demand. In speaking with Nick Norman, a 32-year veteran of the real estate industry and advocate for property owners of rental housing, we found that many of the same pressure points that are experienced nationally manifest themselves as local hurdles relative to New Hampshire’s size and housing need.

“There’s an overwhelming majority of people who believe that the big shortage of housing has driven the affordability issue we are seeing here in New Hampshire,” he says. “New regulation that the legislature has put forward, in an attempt do something that helps renters afford housing, just exacerbates the problem.” 

The Wrong Direction

With a population just over 1.3 million, New Hampshire is home to more than 120,000 renters, largely based in the state’s three largest cities of Manchester, Nashua and Concord. The average rent for a 1-bedroom apartment is between $1,049 and $1,145. New Hampshire rents account for some of the highest in New England, overtaking its next-door neighbors, Maine and Vermont. This is due to a variety of factors that have made New Hampshire an attractive place to live and do business. The state’s urban core is situated on its southern border with Massachusetts. More than 83,000 residents commute to Massachusetts for work each day, while close to 30,000 Bay Staters, by far the largest of any New England state, work in New Hampshire. Manchester’s airport also serves as an inexpensive alternative to flying into Boston.

Commenting on his members’ experiences, Normans says, “We continue to be the ‘Live Free or Die’ state, but we are softening due to our abutting neighbors who are much more progressive.” That progressive wave won both houses of the state legislature in 2018, ending eight years of Republican control in the Senate and four years in the House. “That progressive bent is slowly creeping into New Hampshire.”

He explained that one such legislative proposal, which requires that housing operators provide a 90-day notice to residents prior to a rent increase, highlights the self-defeating policies that are being introduced by lawmakers. “Renters will start looking for new housing at a 90- or 60-day notice, but they’ll hardly find anything available because renters only need to give a 30-day notice to their building if they leave. Property owners will be getting requests for units that they don’t have available yet, generating higher demand and driving up rents.” 

Alternative Solutions

Demand-side solutions, while well intentioned, often do little to generate more housing, which is what New Hampshire housing providers and residents desperately need. Norman says that New Hampshire has loosened its restrictions on the construction of accessory dwelling units (ADU) in an attempt to increase the density limits of single-family zoned land. Partial upzoning of this nature can increase housing options in a community, but lawmakers must work with housing providers to ensure that such a solution adequately meets demand.

New Hampshire Governor Chris Sununu has tried to alleviate the burden placed on existing housing by releasing a comprehensive plan to address the workforce housing shortage. In the plan, Gov. Sununu recommends a series of local policy options that would encourage the development of more affordable housing, including a menu of economic-based development incentives meant to balance the high cost of developing and operating housing. 

Additionally, the plan promotes the adoption of mandatory inclusionary zoning (IZ) ordinances that artificially distort the rental market, increase the cost of market-rate units and disincentivize new development altogether. A newly introduced bill in the state legislature, which is based on the IZ recommendation, stipulates that municipalities must establish a program that does not render a development financially infeasible, therefore encouraging the application of incentives. A step in the right direction, the bill must ensure that the value of the incentives is significant enough to offset the losses accrued during the development of below-market-rate units. 

Election Outlook

Has New Hampshire’s desire for more affordable housing development resonated with the presidential candidates campaigning across the state? Well, not quite, according to state polls and Norman’s membership. Candidates have remained relatively quiet on the issue of housing, opting to exchange jabs at the experience of their opponents or deride the incumbent administration. 

Senator Bernie Sanders (I-Vt.), who advocates for a national rent cap standard, has benefited most from progressive sentiment settling over New Hampshire. He currently leads on second place by 5.2 percent. “My members are very aware that a large part of our problem in housing is over government regulation and restriction,” Norman says, expecting opposition to any platform advocating for greater regulatory oversight for housing. Trailing Sen. Sanders is Mayor Pete Buttigieg, who experienced a dramatic surge in polling during the weekend that has drummed up support from the moderate and conservative voter demographics. This comes after a problematic Iowa caucus that delivered Mayor Buttigieg a narrow win in the nation’s first election contest. 

For Democrats voting in the February 11 primary, few have expressed interest in Vice President Joe Biden or Senator Elizabeth Warren (D-Mass.), whose popularity has dwindled as the early voting states drew closer. Vice President Biden has even gone on record stating, “I took a hit in Iowa and I’ll probably take one here.” According to the feedback Norman has received from his membership, whose allegiances span both sides of the political spectrum, President Trump still has a lock on New Hampshire in the General Election, regardless of the Democratic nominee. “The bulk [of my membership] are likely seeking pro-business policies.” Combine this preference with the razor-thin margin that candidate Hilary Clinton delivered to win the state in 2016, and New Hampshire may very well swing back to the right. 

Campaigns are malleable early on, absorbing the pain points of voters and crafting solutions that reflect those sentiments. Norman says that if there is any common ground that can be found between candidates and the housing providers of New Hampshire, it is under the issue of providing assistance for lead paint remediation. 

More than half of New Hampshire’s housing stock was built prior to 1980 and faces high costs when considering lead remediation methods. The state offers little support to housing providers, which has resulted in higher rents and contributed to the affordability gap. Under a federal lead remediation program, that could change. 

“It is easy to end up with government money that has so much red tape and restrictions that the project becomes ineligible for funding,” says Norman. “Therefore, if a grant fund was established with few restrictions, especially surrounding the use of renovation, repair and paint technology as opposed to full lead abatement, for small projects then that would be useful.” 

The prevailing candidate in New Hampshire will not be the definitive nominee for the Democratic Party, but history has shown it is still within the realm of possibility. As primary season gets into full swing, campaigns will terminate and support for candidates will begin to consolidate. There are clear winners and losers at stake, and housing providers must use their power as voters to select a President that will protect the industry’s rights to develop and operate high quality rental housing in their communities. 

The National Apartment Association (NAA) will provide ongoing coverage of the 2020 Presidential Election Cycle highlighting its importance to the rental housing industry. Stay tuned for more spotlights on candidates’ housing policies, debate analysis and much more. For more information on the 2020 Presidential Election, please contact NAA Manager of Public Policy, Sam Gilboard.