State to distribute $50 million to build 1,472 new rental units, after council approval
Many of the units constructed will be set at affordable rental rates, according to details provided by the Department of Business and Economic Affairs. (Getty Images)
New Hampshire will distribute $50 million in federal funds to help develop 1,472 new rental housing units after the Executive Council signed off on a final list of recipients Wednesday.
In a unanimous vote, the council approved awards to 30 housing developments across the state. The awards, a part of the state’s “InvestNH” housing program, will provide a financial boost to the projects, acting as a line of credit for developers.
On average, developers are receiving $1.7 million, though many are receiving the maximum amount of $3 million, and some are receiving as little as $250,000. The approved developments are spread across each of the state’s 10 counties, with the largest three based in Exeter, Dover, and Franklin.
Many of the units constructed will be set at affordable rental rates, according to details provided by the Department of Business and Economic Affairs. Of the 1,472 units, 918, or 62 percent, will be rented out at rates affordable to households making 80 percent or less of the Area Median Income, the department said. The rest will be set at market rates as determined by the developers.
“It’s phenomenal,” said Gov. Chris Sununu at a press conference after the vote. “The interest is huge, the opportunity is huge, we’re moving forward, we’re getting contracts out, we’re putting shovels in the ground, we’re creating affordable housing in a program that has never even been conceived of before.”
The approval of the disbursements is a key milestone in the InvestNH program, which is designed to distribute $100 million of New Hampshire’s federal COVID-19 relief funds. In addition to the $50 million in direct payments to developers, the program includes $10 million for affordable housing projects to be distributed by New Hampshire Housing; $30 million to incentivize towns to approve projects quickly; $5 million to allow towns to hire consultants to overhaul zoning and planning ordinances; and $5 million toward demolition grants to allow municipalities to clear dilapidated buildings.
But even with 1,500 more units in line for construction, housing scarcity is likely to continue in New Hampshire. New Hampshire Housing, the state agency, has estimated that 20,000 new units will be required in the state in order to meet existing demand and bring vacancy rates to a healthy level.
Under rules devised by the department, the federal funding may be awarded only to developers who have gathered the majority of their funding from other sources. Competition was strong; 117 developers applied in total, according to the department. Recipients were chosen by staff members at the Department of Business and Economic Affairs based on the number of affordable units being offered, the location of the units, and other factors, department Commissioner Taylor Caswell said at the council meeting.
Developers receiving the funds must finish construction on the projects within 18 months of receiving them, but that deadline can be extended by the department until Dec. 31, 2024.
Sununu has billed the InvestNH as a one-time opportunity to expand the state’s housing stock, citing the workforce housing shortage and the needs of local employers. But during the program’s initial approval stage, affordable housing advocates and executive councilors raised concerns over the lack of affordability requirements for the new units. After the council held up approval of the program, the department added some affordability minimum requirements.
On Wednesday, Councilor Ted Gatsas, a Manchester Republican, reiterated some of those concerns about affordability, pointing to the program rules that required developers to cap their costs at $330,000 per rental unit.
“Are you trying to tell me that the cost of $330,000 is affordable?” Gatsas said.
“The standard that we use, that $330,000 cap, is the standard that (the U.S. Department of Housing and Urban Development) uses for their low-income housing tax credit program,” replied Caswell.
Gatsas later voted to approve the funds.
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