NH Will Need 90,000 More Housing Units by 2040

New Hampshire will need 60,000 more housing units between 2020 and 2030, and nearly 90,000 units between 2020 and 2040 to meet housing demand, according to the NH Housing Finance Authority’s (NHHFA) 2023 Statewide Housing Needs Assessment. These numbers assume a statewide ownership rate of 71%, a rental vacancy rate of 5% and an owner vacancy rate of 2%. Currently the rental vacancy rate is 0.5%, which is “far too low to support a functional market,” the assessment states.

NHHFA Executive Director and CEO Rob Dapice says the assessment will help legislators and other stakeholders in the housing arena understand NH’s housing challenges. “The report quantifies the severe housing need,” he says. “Based on the run up on home prices and the historic increases in rents and the extraordinarily low vacancy rates, [many people] already know that there’s a problem. What this report does is provide details and data to understand the problem better.”

New Hampshire has 23,000 renters paying a higher rent than what is considered affordable for their income level. In 2021, an estimated 45% of renters in NH were paying more than 30% of their income on rental costs. The median rental rate for a two-bedroom apartment in the spring of 2022 in NH was $1,584.

According to NHHFA’s assessment, performed by Root Policy Research, the high price of renting makes it nearly impossible for lower-income renters to find a place to live that they can afford. And the rental situation is exacerbated, Dapice says, by the difficulty higher income people are having buying homes. “A lot of people [with higher incomes] are renting down,” he says, explaining that this reduces the availability of existing affordable housing for people who have low-to-moderate incomes.

Lower-density housing, with four or fewer units in a single structure, accounts for 80% of the state’s housing units, and Dapice says policy change is needed on both the state and local level addressing zoning issues that prevent higher density housing. HB 44, which was killed this year, would have required municipalities to permit single family lots in residential districts to be used for up to four units where water and sewer is available. Other bills, such as SB 231, would provide millions of dollars for the affordable housing fund as well as money for shelters and services and other incentives for development. SB 145 would recognize municipalities that make their zoning more housing friendly.