The Hippo


May 31, 2020








Downtown Manchester apartments. Photo by Rebecca Fishow.

Renters’ dilemmas
It’s a tough market for rental housing in NH


 It was a warm evening June 24 when CATCH Neighborhood Housing hosted a groundbreaking ceremony for the construction of 16 two-bedroom apartments at Bow Highlands in Bow.

At the ceremony, Bow Selectman Jill Haddaway said that there were many Bow residents who were looking for affordable housing, and the development is a perfect fit for the town. The apartments will cost renters from $700 to $925 per month, based on their income.
The next day in Nashua’s historic district, the Stabile Company held a ribbon cutting ceremony for the Cotton Mill Apartments — 109 units in a renovated mill building, of which about half are market-rate and half are affordable housing.  The $36 million project took six years to finance and is supported by historic tax credits, low-income tax credits and HUD insurance. 
“If you just do affordable housing, you sometimes can get cast as a low-income housing project, which doesn’t always denote what it really is,” said John Stabile, owner of the Stabile Company. “But by mixing the incomes, we just built some really great downtown housing that everybody can enjoy. … The cost difference is very small because the median income is such that there isn’t a big difference.”
Both of these projects, and a few others like them across the state, are good news for New Hampshire’s growing renter population — but they’re likely not enough. The results of the New Hampshire Housing Finance Authority annual Residential Rental Cost Survey, released June 19, paint a bleak picture of rising rental unit prices and fewer options.
More renters, less options, lower incomes 
While some new affordable housing is being built, local authorities say the demand far outweighs availability. Funding for low-income developments and renters is scarce. 
If you’re in the market to rent an apartment in the state but you’re not particularly wealthy, you may find yourself frustrated by high rental costs and a meager selection of available units. 
That’s the message conveyed by the results of the NHHFA report. 
In the past year, the median monthly gross rent across the state has increased by slightly more than 3 percent to $1,085 per month, including utilities. The most significant cost increases occurred in Grafton, Carroll and Belknap counties, and in Manchester and Nashua.
“It’s was what we expected to see,” said Jane Law, director of communications for New Hampshire Housing Finance Authority. “Along with rising rental costs, there are reduced vacancy rates, so there is a lot of demand out there for rental units.”
Vacancy rates have dropped to 3.2 percent statewide for two-bedroom apartments — the largest category of rental units in the state.
A balanced rental market would have vacancy rates between 4 and 5 percent, and anything in the low 3 percentages means those looking for housing will likely have a hard time finding what they want. Most of the housing that is being built is on the more expensive end of the spectrum, Law said. 
Even more troubling: the costs are going up at a disproportionate rate to renters’ incomes.
A renter would have to earn 121 percent of the state’s median income — more than $44,000 a year — to afford the statewide median cost of a typical two-bedroom apartment with utilities, according to the survey. Currently, about half of New Hampshire renters are spending more than 30 percent of their income on rent.
Housing Action New Hampshire reported that the average hourly wage earned by New Hampshire renters is $13.35 ($28,000 annually), which is just barely more than the state’s “Extremely Low Income” threshold. 
In order to afford market-rate two-bedroom housing, renters need to earn $20.18 per hour. 
“The average or median renter income is not keeping pace with the rise in rental costs, and that causes some people to move further away from their job in order to afford housing, and again it prevents people from getting into home ownership because of rental costs,” Law said. “That said, rental costs are not cheap either.”
A continued perfect storm is causing it all. Thousands of households have left ownership and gone back into the rental market; student debt has prevented young people from making down payments on homes; and the median household income is still lower than it was five years ago. 
The situation has left renters wondering about their options. Law suggests more of what they are already doing: taking on roommates or buddying up with friends to make housing more affordable, or staying with Mom and Dad after college. Others get second jobs to make up the difference. 
Budgeting is also important, said Trevor McCourt, marketing and communications assistant for Neighborworks of Southern New Hampshire, a nonprofit that provides access to housing services.. 
“People forget about budgeting,” McCourt said. “There was a time [when], in order to get a mortgage, you had to sit down and do a budget, but we still think it’s very important. … If you are buying a cup of coffee instead of making it, or buying a sandwich every day, that makes a difference.” 
Subsidized housing: more need than demand 
One of the largest funding sources of the state’s affordable housing developments is low-income tax credits from  the federal government. To earn them, developers go to NHHFA and go through rigorous and competitive rounds of evaluation. When they are awarded the tax credits, developers sell them to investors. 
“It’s a great public-private partnership and it’s a great means to get capital. So then developers have upfront cash, which helps them with the development costs and lowers the amount of debt they need to carry,” Law said. 
Less debt means developers can rent at prices affordable for people earning 60 percent or sometimes 50 percent of the area median income. But it hasn’t been easy for developers to get that support — currently there are $3 of requests for every $1 available to developers, Law said. 
Although the need is greater, federal aid has been increasingly scarce.
“It’s the opposite of more funds opening up,” Law said. “We have had decreasing funds. One of the subsidy sources we have is through the Department of Housing and Urban Development, and that one has been slashed quite a bit within the last five years.”
New Hampshire receives $3 million from HOME, which is the small-state minimum, and less than the state received during the American Recovery and Reinvestment Act in 2009. States with larger populations, like California and New York, are dealing with much greater cuts. 
But “Even if we haven’t felt any cuts, we haven’t seen any increases, which, considering inflation, feels like a cut,” Law said. 
Currently, the 18,300 low-income units across the state are in high demand. Word gets out about a new development and spots fill up quickly.
“Oftentimes when [Neighborworks of Southern New Hampshire] gets approvals to do a new development,  people read about in the newspaper or see it on TV and ... start calling the next day, a year before it’s built,” said McCourt. 
While low-income housing is more affordable, it’s still too pricey for the 38,000 extremely low-income renters who earn $24,000 a year or less. Some people who fall into that category receive housing aid from funds set aside for veterans, seniors and the disabled, but the others may try to get rental assistance commonly referred to as Section 8, which moves with the tenant instead of staying with the apartment. 
In New Hampshire, there are 9,000 Section 8 vouchers statewide, and there’s currently a 10-year waiting list for those, according to Laurel Redden, membership and communication coordinator for Housing Action New Hampshire. 
It’s not a problem that will be easily solved, and it looks like any changes to the current state of low-income rental funding would likely be downward, Law said. 
“There’s budget tightening in general in Congress,” Law  said. “So a lot of programs, not just housing programs, take hits. But we, of course, in the housing industry take those hits personal.” 
As seen in the July 10, 2014 issue of the Hippo.

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