The report - the product of a collaboration between the New Hampshire Housing Finance Authority and the New Hampshire Center for Public Policy Studies - raises concerns for both state policymakers and for the state’s residential real estate industry.
“... with recent shifts in the state’s demographic and economic trends, New Hampshire’s current housing infrastructure could end up a drag on future economic growth and stability,” the report said in its executive summary.
Demographic trends show that New Hampshire is getting more and more gray: New Hampshire is the fourth oldest state, with an average age of 41.1. The national average is 37.2. Maine is the oldest (42.7) followed by Vermont (41.5) and West Virginia (41.3) then the Granite State.
The housing study looked at the demographic forecasts and talked to a wide range of builders, planners, public officials and real estate experts, and it reached five broad conclusions:
- Overall home ownership demand is declining;
- New Hampshire’s current housing supply is poorly aligned with evolving preferences;
- The so-called ‘New Hampshire advantage’ has an effect on housing affordability;
- Seniors will dominate the state’s future growth;
- Efforts must be taken to facilitate a more balanced housing market.
There’s a cause-and-effect relationship between the state’s attraction to Baby Boomers, who, in many cases, are aging out of their large homes and are seeking to downsize. But younger people looking for homes aren’t looking for - nor can they necessarily afford - the three and four-bedroom McMansions. And there are just fewer younger people, as out-migration of younger people is forecast as a real problem for the state.
Said the report: “Given the relative paucity of young households in the state, it’s unclear whether the larger units built for Boomers during their child-rearing years will draw sufficient interest from buyers in future years. In addition, younger age groups are, in general less likely to be home owners compared to previous generations. In fact, each new group of young people is increasingly less likely to be home owners. Moreover, financial pressures cause younger generations to gravitate toward more non-conventional housing solutions, including co-ownership and “doubling up,” and a preference for the flexibility associated with renting.”
The study indicated a need for more workforce housing that better reflects the needs and economics of younger people.
In addition, the study indicated the state is ill-prepared for the fact that the number of senior citizens in the state will have doubled between 2010 and 2015.
“There are important limits on the ability of seniors to age in place, including high rates of disability, lower income and savings, limited transportation options in many parts of the state, and the decline in the size of the caregiver workforce,” said the report.
State and local officials and policymakers need to take a look at creative ways - through zoning and financing and construction and/or building rehabilitation - to solve the housing disconnect.
“What would a successful shift in regulatory efforts look like? Some argued that multi-generational housing – where unrelated folks live together in a co-op – could be one component of the future housing market. Mill rehabilitation and conversion to housing is attractive because it offers one floor living, smaller and, arguably, more efficient units and desirable in-town living,” said the report.
But the report writers noted that “encouraging these changes as a means of encouraging movement in the housing market would require a complex set of policy decisions on property tax exemptions, land use requirements, and zoning ordinances.”
The report was a topic of conversation last month on New Hampshire Public Radio’s “The Exchange”. Give a listen here.
Paul Briand is an editor with the non-partisan, non-profit Live Free or Die Alliance, which encourages the discussion and analysis of New Hampshire politics and policies.