NH Housing Permits Dropped In 2020 For The First Time In 8 Years

CONCORD, NH — A new study from the state’s Office of Planning and Development shows housing construction permits lagging behind prior years and not keeping up with the migration flow of new people moving into New Hampshire.

The 44-page report, compiling data from hundreds of building inspectors and planning departments across the state, shows a dip in year-over-year permits issued between 2019 and 2020, from 4,483 units to 4,446 units — the first drop since 2013. At the same time, the U.S. Census estimated around 5,500 people moved into the state during the same time period. According to researchers, Atlas Van Lines also showed New Hampshire registering as the fourth-highest percentage of inbound moves in the United States in 2020, at 61.6 percent.

During the 2019 to 2020 timeframe, more than 59 percent of the permits were for single-family homes, a year-over-year increase of around 9 percent. Manufactured homes made up only 4 percent of all new permits.

Ken Gallager, a principal planner with the Office of Planning and Development, said he and a colleague spent months compiling the data in an effort to track population growth in the state and offer analysis of housing trends and demand. The office, which was previously part of the Office of Strategic Initiatives but is now a division of the New Hampshire Department of Business and Economic Affairs, hoped “this information would add to the greater discussion” around the topic.

“We have people right now who can’t find places to live,” he said.

The data, he said, would allow policymakers, including local and regional organizations, to assess their housing needs when addressing permitting, planning, and zoning.

“We can offer tools,” he said. “We are not really in a position to beat towns over the head (about deciding policy); towns are making these decisions … it’s a hot topic right now so we are happy to get this information out.”

The Office of Planning and Development did not, however, address the elephant in the room when it comes to housing — the cost of educating children and school districts, which are seeing budgets increasing annually while, at the same time, enrollments have been in a nosedive across the state, due primarily to families having fewer children when compared to the past. The cost of educating children, the majority of which is funded by local property taxes as well as a statewide education property tax, a local tax collected by the state, was a part of the housing equation but difficult data to collect at the same level as local permits, Gallager said.

“We would have to calculate populations and have a major expansion of operations (with planners at the state) to get at the greater detail that that would require,” he said.

Planners, he said, were working on new population projections in five-year age groups, with a new report expected this summer. While New Hampshire is aging or graying, that metaphor only tells part of the story, researchers are finding. Granite Staters, who moved into the state between the 1970s and 1990s, are “sticking around,” Gallager said. But, the state aging is not based on their median age cohort, he said, it is based on migration.

“People who are old, moving into the state, is not accurate,” Gallager said. “(Residents) in their 60s and 70s are tending to move away — but a spike of people who are moving back are in their 80s.”

Local Housing Supply

Amherst: 4,466 dwelling units per 2020 Census. Forty residential permits were issued by the end of 2020 including 36 single-family units and four two-family units.

Bedford: 8,279 dwelling units per 2020 Census. One hundred and 17 residential permits were issued by the end of 2020 including 26 single-family homes and 91 units in a five or more-unit building.

Concord: 19,085 dwelling units per 2020 Census. Fifty-six residential permits were issued by the end of 2020 including 27 single-family homes, nine two-family homes, and 20 units in a five or more-unit building.

Exeter: 7,459 dwelling units per 2020 Census. Fifty-two residential permits were issued by the end of 2020 including 10 single-family and two-family homes and 32 units in a five or more-unit building.

Hampton: 10,153 dwelling units per 2020 Census. Sixty-six residential permits were issued by the end of 2020 including 11 single-family homes, two two-family homes, and 53 units in a five or more-unit building.

Londonderry: 9,849 dwelling units per 2020 Census. One hundred and 23 residential permits were issued by the end of 2020 including 92 single-family homes, 27 two-family homes, and four manufactured homes.

Merrimack: 10,517 dwelling units per 2020 Census. One hundred and 35 residential permits were issued by the end of 2020 including 58 single-family homes, 29 two-family units, and 48 units in a five or more-unit building.

Milford: 6,846 dwelling units per 2020 Census. One hundred and 20 residential permits were issued by the end of 2020 including 115 single-family homes and five two-family homes.

Nashua: 39,663 dwelling units per 2020 Census. Thirty-one residential permits were issued by the end of 2020 including 29 single-family homes and six two-family homes. The city lost four three- to four-family units in 2020.

North Hampton: 2,032 dwelling units per 2020 Census. Four residential permits were issued by the end of 2020, all single-family homes.

Portsmouth: 11,161 dwelling units per 2020 Census. Sixty-eight residential permits were issued by the end of 2020 including 25 single-family homes, six two-family homes, 26 three- to four-family homes, and 11 manufactured homes.

Salem: 12,681 dwelling units per 2020 Census. One hundred and 42 residential permits were issued by the end of 2020 including 67 single-family homes, 16 two-family homes, 56 units in a five or more-unit building, and three manufactured homes.

Windham: 5,575 dwelling units per 2020 Census. Forty-seen residential permits were issued by the end of 2020 including 43 single-family homes and four two-family homes.

At 4,446 units for 2020, new construction permitting is more than double what it was in 2011, the lowest number of permits during the past two decades. However, it is about half of the highest point in the last 20 years, in 2004, about three years before the first signs of the Great Recession and housing market collapse.

The data, Gallager said, was a key component of a regional housing needs assessment adding that permits were the one piece of information for people to understand the housing crunch as they move forward with local decision-making around zoning and planning.

The New Hampshire Council on Housing Stability has suggested that 13,500 new housing units would be needed by 2024, which the state was close reaching now, according to the study. The New Hampshire Housing Finance Authority, however, believes 20,000 to 30,000 new units were needed to meet demand.

County Housing Supply

According to the U.S. Census, in 2020, Hillsborough County had 175,571 dwelling units. At the end of 2020, 1,015 new units of residential permits were issued including 595 single-family homes and 281 multi-family homes of five or more units.

In Merrimack County, there were 65,565 housing units, according to the 2020 U.S. Census. At the end of 2020, another 434 units had been permitted. Most of those units, 272, were single-family homes while 141 were multi-family units.

In 2020, according to the U.S. Census, Rockingham County had 135,338 residential units. Another 1,166 were added by the end of 2020 — including 742 single-family homes and 205 multi-family units that have five or more residences.

The lack of inventory has created an artificial bubble in housing prices in New Hampshire, with many being priced out of buying. Many communities, like Concord, the state's third-largest city, are showing available inventory at less than 1 percent.

According to the report, Milford posted the most single-family home permits in the state in 2020 — 115, followed by Londonderry at 92, Salem at 67, and Merrimack, in fourth, with 58.

The state has nearly 643,000 housing units, according to the study.

Read the full report, in PDF format, linked here.

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