House Special Committee on Housing (03/31/23)

Introduction

The committee welcomes the Murkadis Institute from George Mason University to present on solutions to the housing crisis in New Hampshire.

• The Murkadis Institute is a non-partisan, non-profit research center that works with legislators and policymakers on various issues, including housing.

• Charles Gardner and Celine Firth are scholars at the institute who will be presenting today.

• They provide some basic stats on New Hampshire and policies that they have seen work in other states.

Presentation by Murkadis Institute

Charles Gardner and Celine Firth introduce themselves and their backgrounds before diving into their presentation.

Introductions

• Charles Gardner is a research fellow with Mercadis, while Celine Firth is one of the directors of the Urbanity Project at Mercadis.

• They both give brief introductions about their backgrounds and experience in urban economics and housing.

Policy Ideas for State Legislatures

• The handout provided includes policies that have been successful in other states that could be relevant to New Hampshire's legislative session.

• These policies include things like zoning reform, inclusionary zoning, and tax incentives for affordable housing development.

Case Study: Accessory Dwelling Units (ADUs)

• Emily Hamilton conducted a case study on ADUs in New Hampshire, specifically looking at a 2017 law that requires towns to allow ADUs but allows for various regulations.

• Despite the weak law, there has been substantial permitting of ADUs in New Hampshire.

Understanding the Housing Market in New Hampshire

In this section, the speaker discusses how the pandemic has affected the housing market in New Hampshire and how it is different from other states.

Housing Prices and Rents

• The speaker explains that when prices rise without rents increasing, it might indicate that demand is coming from something that's not fundamental.

• When rent and prices are rising together, it indicates a fundamental demand based on people's jobs, retirement incomes, and where they want to live.

Housing Stock in New Hampshire

• The speaker notes that there has been a decline in housing stock in the North Country of New Hampshire but an increase downstate. However, overall, New Hampshire's housing stock and population are growing at about two-thirds of the national rate.

• The pandemic accelerated growing demand growth for living at the edges of metro areas. Long commutes are more tolerable when done only a few times a week. There is also an increase in demand for nice vacation homes.

Sources of Demand

• There will be a big boom of retirements based on US demographics as baby boomers hit retirement age. This puts pressure on small housing stocks found in rural or vacation-oriented areas.

• More people can take long vacations and work remotely for extended periods. This increases demand for nice places to become vacation homes.

Solutions

The speaker promises to discuss solutions later on after Charlie speaks.

Land Use Planning and Zoning in the United States

This section provides an overview of land use planning and zoning in the United States, with a focus on New Hampshire. It discusses the history of zoning, the role of municipalities in zoning, and the state's enabling statute for zoning.

History of Zoning

• Zoning in the United States dates back only about a century.

• New Hampshire has a long history dating back to the 1600s, but zoning was not adopted until the 1920s.

• The Dartmouth vs. Woodward case set in motion modern corporate law on the free enterprise system and just passed its 200th anniversary.

• New Hampshire went approximately 300 years without zoning before adopting it.

Municipalities' Role in Zoning

• Approximately 220 out of New Hampshire's 234 municipalities have adopted zoning codes.

• Municipalities derive their authority to zone from the state enabling statute (New Hampshire Revised Statute Section 672-1).

• The current version of that statute imposes some obligations upon municipalities, including developing a balanced supply of housing for people of all incomes, promoting agriculture and forestry, protecting natural resources from development for other uses, and prohibiting forbidding in-home daycares.

State's Enabling Statute for Zoning

• The state enabling statute acknowledges that there is a role for the state in setting objectives for and limitations on local zoning power to promote individual property rights and economic freedom.

• There is precedent for the state pushing back on some of the most exclusionary and restrictive rules set by local towns and cities.

• The state has been taking an active role in pushing back against some of the constraints on housing production and people's economic activities that are set by local levels.

Supply and Demand in the Housing Market

This section discusses supply and demand in the housing market, with a focus on how policymakers can influence the market.

Supply and Demand

• As policy makers, you look at a market, you see supply and demand prices move as supply and demand move.

• Policymakers can influence the market by looking at both supply and demand.

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