In its Dec 13 “Broadside” the Josiah Bartlett Center carried a housing in New Hampshire story. In the story it cited “A positive shift” in New Hampshire’s pro-housing movement. They report the governor criticized municipalities for using “… local regulatory powers to impose severe restrictions on housing development.” The example cited by the Governor was Bedford. The governor’s comment in part was the town “… has made it difficult for people to build lower-priced homes, particularly multi-family housing.”
Finding the root cause
Now maybe Bedford is restrictive. And, maybe that’s a good thing and maybe it isn’t. The people of Bedford are the ones who get to decide about zoning and construction regulation in their town. NOT the state. That’s the law. If New Hampshire has a need for more residential construction the private sector will find a way to meet the demand. It is called free markets.
The Josiah Bartlett Center also reports “Taylor Caswell, commissioner of Business and Economic Affairs, called the situation a crisis…” Whether or not there is data a government agency feels supports calling a residential housing shortage a crisis, the state has no business inserting itself into the private residential construction business for anything outside of health and safety. Commissioner Caswell needs to cool his jets.
Interestingly the data cited in the “Broadside” story is state housing data. The data presented does not correctly present the information. New Hampshire really is a tale of two areas. The south and more specifically the arc around Boston is where the bulk of the shortage exists. The rest of the state sees the issue to a much smaller degree.
Market response
The market may not work on the bureaucratic timeline, but it does work. First a shortage happens. Then the market recognizes need when prices begin to rise. The greater the difference is between the demand and the supply, the higher the motivation to act. The market will fill the need. But it will do it in the timeframe that balances the ability to pay with the product supplied. Finding the fit is a process. It used to involve buyers and sellers. These days regulators feel the need to insert themselves, which costs time and time is money.
A residential housing shortage is part of a natural positive response to expansion in economic activity. When the economy gets better and grows, in this case because of reductions in taxation and regulation, people and businesses come to New Hampshire. Next wages go up. Then the wage increase is spent to create new residential and business construction. That further feeds the business cycle… if we can keep it going.
New Hampshire does not need state subsidies for affordable housing. Subsidies will not solve the problem. The lack of incentive to build is not the cause of the shortage. Local governments are going to have to decide whether existing regulations are preventing developers from meeting the market demand for lower-priced homes.
Municipalities have a role to play
What does the community want? Have the town planners gone overboard with planning and control? Are they part of the problem not the solution? City planners all have masters degrees and they know all the right answers and they love putting them into our planning and zoning codes.
Developers want to build the homes people are willing and able to purchase. Now we get to see if New Hampshire really is a friendly place to move to. What are we going to do with our egregious local regulations? Planning and zoning rules can literally make it illegal to build for market demand.
What is important to New Hampshire’s municipalities? The market isn’t the problem, government interference in the market is. That understanding is essential to filling the residential housing shortage. A shortage of residential housing in New Hampshire really is a good issue to have to deal with.
