New Hampshire Invests $100 Million of American Rescue Plan Funding in Increasing Affordable Housing Development

New Hampshire has approved a plan to invest $100 million in federal COVID-19 relief funds in the state’s housing infrastructure. The InvestNH initiative was proposed in February by Governor Chris Sununu and the state’s Department of Business and Economic Affairs as a way to increase the number of available rental units in the state. Advocates successfully pushed for the plan to include income limits on certain projects to increase housing affordability for lower-income households. The final plan was approved by New Hampshire’s Executive Council on May 4, 2022, and implementation will begin soon.

Like many states, New Hampshire has struggled for years due to a dearth of housing stock and increasing rents, putting affordable housing out of reach for many residents. InvestNH’s primary project dedicates $60 million of flexible, supplemental funding for a capital grant program for the development of new multifamily rental housing. Applicants must demonstrate that units in their projects will be available only to tenants earning 80% or below of the area median income (AMI) or will have rent restrictions that do not exceed the maximum affordable rent for tenants at or below 80% of AMI. For projects with fewer than 15 units, applicants will be required to commit to a rent cap below the maximum rent affordable to households earning 80% of the median income in the area of the property.

The plan includes other provisions to incentivize multifamily housing development and combat some of the administrative barriers that often thwart affordable housing development at the local level. For example, it allocates $30 million in grants to municipalities that issue permits for eligible housing. Another $5 million will support municipalities as they review their zoning codes, identify barriers to affordable housing development, and propose and adopt changes to these regulations.

The affordability provisions of InvestNH are an improvement on the governor's original proposal. Some members of the Executive Council raised concerns that the initial plan did not guarantee dedicated funding for affordable housing and did not protect against funding being spent on luxury apartments. The administration had argued that the omission of affordable housing requirements was intended to allow projects to move forward flexibly and quickly and pledged not to use the funding for high-income rental housing. Nevertheless, the Executive Council paused further consideration of the proposal until the governor’s office addressed affordability. Once further details were revealed, the Executive Council passed the InvestNH proposal in a 4-1 vote.

Housing advocates – such as Housing Action New Hampshire, an NLIHC state partner – were pleased to see that such a large amount of funding will be invested in the state’s housing supply and that the funds will be used to promote long-term housing affordability. They plan to work with policymakers on successful implementation of the funds.

“The affordable housing crisis in New Hampshire is directly linked to the lack of supply of rental housing,” stated Elissa Margolin, director of Housing Action NH. “It was gratifying to see our lawmakers in every branch and at every level prioritize ARPA [American Rescue Plan Act] resources for this. Housing Action NH will stay engaged and advocate for this new program’s successful implementation.”

Housing Action New Hampshire has been pushing to provide better tools to help communities respond to the demand for more housing. In addition to InvestNH’s initiative, SB 400, the Community Toolbox Bill, would provide a foundation of enabling policies, economic incentives, improved timelines, and a more transparent local review process. After the New Hampshire House of Representatives tabled the measure, a Committee of Conference restored many of the provisions through a new legislative vehicle. If approved, housing advocates can celebrate the passage of a new Tax Increment Financing tool, speedier timelines for local planning and zoning boards, density provisions, and enhanced training opportunities for planning and zoning board members.

For more information about these advocacy efforts and Housing Action New Hampshire, contact Elissa Margolin at [email protected].