Last spring, Gov. Kelly Ayotte signed a raft of legislation changing zoning laws at the state level to encourage new housing development. While a group of legislators is working to repeal many of those zoning changes, housing advocates are working on another big barrier to building: water and sewer infrastructure.
The NH Zoning Atlas, a collaborative project published by the Saint Anselm College Initiative for Housing Policy and Practice, shows that only 11.6% of buildable land in NH has access to public water, 6.2% has access to public sewer, and only 5.6% has access to both. Wells and septic tanks are an alternative, but they require larger lot sizes and don’t work for all terrain. That translates into higher costs for builders and is one of the many reasons why you see large-lot McMansions instead of starter homes.
While many water and sewer decisions are made at the local level, state lawmakers will consider several policy proposals in 2026 related to this vital infrastructure.
More Grant Funding
The most direct way the state could support the expansion of local sewer and water infrastructure would be increased grant funding to municipalities. Unfortunately, a tight budget makes additional spending difficult. The fiscal year started July 1, and already state revenues have come in below target. Federal grants and money from PFAS lawsuits could offer some alternative funding for water infrastructure, but state policymakers can’t increase that money on demand.
Legislators could choose to prioritize housing-related water and sewer projects within existing grant programs. For example, Rep. Chris Muns (D-Hampton) is sponsoring a bill that would give priority consideration to innovative community-based or regional water or wastewater treatment projects under the Housing Champion Designation and Grant Program, if the projects allow for houses on smaller lots.
Enabling Indirect Funding
There are also indirect ways state and local government can provide financial support to new water and sewer infrastructure, such as tax credits and special assessment districts. A special assessment district allows a municipality to charge properties within a designated area for infrastructure improvements that benefit them.
Rep. Joe Sweeney (R-Salem) has requested a couple of bills related to special assessment districts for housing and infrastructure. At the time of this writing, the bill texts were not yet public.
Rep. Sweeney is also sponsoring a bill “creating an off-site infrastructure improvement tax credit.” A tax credit might make it appealing to developers to upgrade municipal water and sewer infrastructure to accommodate more housing. Again, the bill text was not public at the time of
this writing.
Maximizing the Use of Existing Infrastructure
To maximize housing without expanding water or sewer infrastructure, state policymakers could change state zoning laws to cap minimum lot sizes anywhere public water and sewer is available. However, the NH Zoning Atlas revealed that large lot size requirements often did not correspond to water or sewer needs. In some cases, residents may resist public water and sewer specifically because it enables more housing.
There were several bills introduced in 2025 to cap minimum lot sizes at the state level. For example, HB 459 and SB 84 would both prohibit a minimum lot size over 22,000 square feet, or about half an acre, for single family homes serviced by municipal or community sewer infrastructure. Legislative committee members are recommending “interim study” for both—a polite way to kill legislation. Still, smaller lot sizes remain a priority for housing advocates.
So long as most of the buildable land in the state is without public water and sewer, towns must also consider how new housing, with new wells, might impact existing wells. Some wells in NH ran dry during the 2025 drought. Rep. Kat McGhee (D-Hollis) is the prime sponsor of a bill that would allow planning boards to request a water supply study upfront from subdivision developers, if the developers are not using a community water system. The NH House rejected a similar bill last year, partly over concerns it would discourage housing development.
Anna Brown is executive director of Citizens Count, a nonprofit dedicated to providing unbiased information about NH issues and candidates. For more information, visit CitizensCount.org.
