Future of housing initiative uncertain after Executive Council freeze on $100m plan

The future of a proposal to inject $100 million in federal funds into New Hampshire’s housing rental market is unclear after the New Hampshire Executive Council tabled Gov. Chris Sununu’s plan.

In a 5-0 vote on April 20, the Executive Council voted to withhold approval of the plan, which Sununu said will target “low- and middle-income” rental housing. Councilors have expressed concerns about the lack of concrete guarantees that the money will go to affordable housing projects.

Now Department of Business and Economic Affairs Commissioner Taylor Caswell – whose department would be tasked with overseeing the distribution of funds – is seeking to overcome that skepticism by providing more details ahead of the council’s next meeting on May 4.

But while Caswell and Sununu try to convince advisers, they have indicated that they do not want to change the structure of the program to provide the guarantees requested by advisers, arguing that the state needs flexibility to distribute the rewards effectively.

Sununu said concrete definitions of affordability are not helpful for the program.

“We’re not going to create our own guidelines – one-size-fits-all guidelines on what ‘middle and low income’ is, knowing that those guidelines are more local, depending on funding and depending, again, on structure. of this project might look like,” Sununu said at a press conference after the vote. “We are doing everything not to create artificial safeguards that will exclude projects.”

Caswell agreed. “There is no need to ‘go back to the drawing board’ or make changes to the structure of the program,” he said in a statement. “We will be accelerating the program design process to make decisions now on many program details and communicate them to the board before its next meeting.”

Several executive advisers said they could not approve the funding without further restrictions in writing. Sununu administration officials say they will use the coming weeks to flesh out their vision and explain it to advisers – even if the underlying structure of the grant program does not change.

“At nearly every meeting, state government agencies present programs to (the) Executive Council and seek their approval to ‘accept and expend’ a particular amount of funding to be used for a particular purpose,” Caswell said. in a press release. “We seek to provide them with enough detail to give consent, but every once in a while they are just looking for more detail. Yesterday was one such case, and we will be looking to provide them with what they need to make a decision on this essential element of workforce housing.

The proposed scheme was touted by Sununu as a one-time boost to the state’s housing market, which has struggled with low levels of housing stock and rising prices. The plan would allocate $60 million in matching grants for housing estates in the state and $40 million in grants to incentivize cities to speed up permitting processes and revise zoning laws.

The program would allow developers or housing organizations to request up to $3 million in matching funding for projects, as long as those projects are used for rental housing and include at least five units.

But a two-page explanation of the plan released by the department this month has been criticized by some lawmakers for not including revenue caps for the types of housing projects it would fund.

Those concerns first surfaced at the April 15 Joint Legislative Tax Committee meeting, where Democratic Senator Cindy Rosenwald questioned the department’s decision to treat federal recovery money funding the project as an “income replacement”, a designation that allows the state to use the money. without necessarily targeting low-income residents.

This committee approved the program, 8-2. Some Democrats voted to endorse the program even as they urged Caswell and Sununu to focus on affordable housing.

But by the time the proposal reached the Executive Council on Wednesday for final approval, concerns about the lack of specificity had spread to both parties.

“It’s only two pages out of $100 million,” Councilman Dave Wheeler, a Republican from Milford, said, speaking to Caswell and Sununu. “And with all due respect, if it’s affordable housing, before we hand out $100 million of taxpayers’ money, we need to know the definition of affordable and what it’s going to be spent on. “

Councilwoman Cinde Warmington, a Democrat from Concord, agreed, saying “nothing in these documents would prevent this money from being allocated to market-priced housing or luxury housing.”

Warmington’s comments sparked a tense back-and-forth with Sununu.

“I have $100 million allocated for low and middle income housing,” Sununu said. “If you don’t want to vote for him, you don’t have to.”

“You can tell what it’s about, but then let’s see it in writing,” Warmington replied. “Let’s put some eligibility criteria here.”

Neither Wheeler nor Warmington were immediately available to comment Monday on factors that could alter their votes.

While the funding program is in limbo, some see the delay as an opportunity. The state’s largest affordable housing organization — Housing Action NH — embraces the filing decision and advocates for state officials to use the additional time to add clear affordable housing goals to the program.

But Housing Action NH is still hoping councilors will approve a version of the scheme, said Elissa Margolin, director of the organisation. The opportunity the $100 million presents to the state is too great for the board to kill the whole proposal, Margolin added.

“I would say, overall, we’re pretty optimistic,” Margolin said. “We have a system of checks and balances, as the governor said, and it’s an opportunity for (the advisers) to get more information, and that’s part of the process. And we’re all about affordable housing. So we appreciate the opportunity to have this brief extra moment of advocacy, but we should.

And Margolin said that while the organization advocates for affordable housing projects to be prioritized, flexibility can be beneficial in completing some housing projects. It allows mixed-income housing projects – in which affordable housing is included alongside market-priced housing – to go ahead, which can be easier to get approved. And it keeps some projects from being blocked by statewide caps tied to accessibility measures, she said.

“Flexibility is also good for developers,” she said. “And one of the reasons that’s good is that it allows our developers to address real local and regional needs and local markets so they can push these shovel-ready projects forward.”

The main requirement of the program, says Margolin, is that the money does not go to renting luxury apartments. Currently, there are no specific safeguards to prevent this, although Sununu and Caswell have pledged not to use the funding for high-income rental housing projects.

“There are no luxury apartments, there are no condos, there are no — these are all multi-family housing for low- and middle-income families,” Sununu said.

Whether advisers approve of the plan will depend on how detailed the new plan is – and whether it sufficiently addresses their affordability concerns. The Tax Committee has already approved federal funds to support the hiring of three new Department of Business and Economic Affairs staff to help the program get started; Caswell said those staff members will develop a more detailed plan for the program.

If the board approves the $100 million ‘accept and spend’ funding request, the Ministry of Trade and Economic Affairs would still have to bring the specific projects it wishes to fund to the board for final approval, the attorney general said. of New Hampshire, John Formella. advisors last week.

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