The House Special Committee on Housing met again this week, continuing to take input from various stakeholders. One of the themes that has emerged is what “affordability” really entails, including the important policy question: Who should bear the cost, and when? 

Roads: For example, is it better policy to build roads to town standards (many of which reflect DOT’s geometric design standards) and have the town (i.e., taxpayers) bear the cost of maintenance, or should towns be dotted with private roads built to whatever standard the developer determines is appropriate? Private roads may cost less to build initially, but they generally don’t last as long before serious maintenance is required and the ongoing cost of maintenance—snowplowing, pothole repair, repaving—falls on a smaller group of individuals, often at a higher cost. In many situations, residents on those roads later seek town acceptance of the road once they have fallen into more serious disrepair. 

Public Sewers: If high density leads to cheaper building costs and high density is only possible where public sewers are available (and, to a lesser extent, public water), should the cost of sewer upgrades fall on new builders, or on the whole user base, which is typically a subset of taxpayers? Requiring the whole user base to subsidize the costs of necessary upgrades may help lower the initial build cost of new or renovated homes but will result in higher costs for all sewer users. 

Building & Fire Standards: Do requirements that increase the cost to build homes but decrease the cost to operate the homes over time, via heating/cooling, maintenance, and insurance costs, improve affordability, or serve as a barrier? An estimate heard this week was that it may cost an initial $12,000 more to comply with the insulation and energy sections of the 2023 International Building Code standard, but with the U.S. Department of Energy estimating that a properly sealed and insulated home sees a reduction in heating and cooling costs of approximately 18 percent per year, additional cost savings through the use of more energy-efficient systems, and the average amount of time spent in a house being 13 years, the average owner may see a higher upfront cost, but is almost certain to see a cost savings above the initial extra build cost. 

The committee also heard a very interesting anecdote about a manufactured housing park placed for sale. The homeowners in the park were given the opportunity of banding together to purchase the 325 homes, but the outstanding offer from a hedge fund was $58 million which, to be matched, would require the homeowners to agree to increasing their lot rent from $500 to $900 per month. That was far beyond what the residents could afford. After purchase, the fund has been steadily increasing rent. 

How the committee may approach these issues and policy questions is not yet known, but we expect that there will be legislation filed in September for the 2024 legislative session. We are hopeful that the legislation will dovetail with some of the funding that we expect the Senate to provide in HB 2, including creation of the Housing Champions Program, to maximize funding and collaboration among stakeholders. The housing problems our state faces are long-running and will not be solved quickly—nor are they unique to New Hampshire—but we think that collaborative approaches will result in positive policy changes that lower costs that can be passed onto home buyers. We’ve already seen that occur this year with the cooperative efforts on bills such as SB 78, altering the statutes relevant to performance bonding, and we look forward to continuing those efforts.

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