This story was originally produced by the NH Business Review. NHPR is republishing it in partnership with the Granite State News Collaborative.
After living in North Carolina for three years, Lisa Lozeau-Trzepacz knew she wanted to return to New Hampshire.
“The city wasn’t my first choice,” admits Lozeau-Trzepacz, a resident of The Factory at Willow in Manchester.
What attracted her was the appeal of a professional community and a key fob security system that limited residents’ access to only community areas and the floor they lived on.
“I don’t look actively (for another apartment) because I don’t want to leave,” says Lozeau-Trzepacz. “I feel very settled here and comfortable and I can’t stress (enough) the safety.”
Over at 75 Canal, Brian Pratt, a civil engineer with Fuss & O’Neill, who helped design and get permitting for luxury apartment building he ironically now lives at, enjoys living downtown.
“It’s a really good community. There’s a lot of like-minded young professionals that live here. They put on events pretty much weekly in part just to socialize. There’s ton of outdoor spaces,” he says, standing in a courtyard with patio seating, cornhole and a view of the millyard and Uncanoonuc Mountains.
“I figured it would be cool to live near work and live in the downtown and do that live, work, play that we’re all focused on,” says Pratt, citing the slogan for the young professionals-geared nonprofit Stay Work Play.
Downtown development
Multifamily housing development has been a post-pandemic boon for downtown Manchester.
Traditionally the city has been a business and financial center where professionals worked but didn’t necessarily reside. When the COVID-19 pandemic sparked en-masse remote work, restaurants and shops were hit hard by the lack of foot traffic.
“Manchester coming out of COVID, downtown was kind of a ghost town,” says Tom Farrelly, executive managing director of commercial real estate firm Cushman & Wakefield.
But the development of hip, luxury apartments with work from home spaces, amenities and community hang-outs is turning the tide.
Some notable examples are the 2021 opening of The Factory at Willow at the former Cohas Shoe Factory, new construction at 75 Canal in November 2024, and Brady Sullivan’s conversion of office space into residences at 1000 Elm Street in November 2024 and The Lofts at Waumbec Mill in March 2025.
“The advent of converting office to residential is a gamechanger,” Farrelly says.
“Now you have an extended presence. There are restaurants serving breakfast, lunch and dinner. It’s brought bustling life to Manchester. And I think Manchester has a very bright future ahead of it. It’s going to be easier to attract the kind of companies you want to see establish their roots and grow.”
The City of Manchester recently published a second draft of the proposed Manchester Zoning Ordinance and other regulations that deal with land use and development. The objective is to streamline building codes to reduce the need for variances, which are formal exceptions to local zoning laws.
The public is welcome to submit comments and questions to the Planning and Community Development Department by no later than Monday, Sept. 22.
After holding listening sessions, Nicola Strong, deputy director of planning and zoning for the City of Manchester, says the city plans to change district lines and allow more mixed-use development in certain areas. It will also form a base code regarding what housing types and aesthetics are allowed in certain neighborhoods, considering the types of development that have already received variances but were nonconforming with current zoning.
One example she gives is variances already granted to build duplexes in traditionally single-family neighborhoods. Now zoning would allow it outright.
Farrelly welcomes the new land-use codes, having recalled in the mid-1980s the city’s opposition to converting the mills for residential use, thinking some form of industry would take the space, but it never did. Instead, manufacturers transitioned to mainly single-story industrial buildings with more efficient access to loading docks.
The new land-use code, “It’s going to create a lot of interest,” Farrelly says. “It eliminates confusion and things that bog down progress because the rules of the road will be more understood and apparent.”
“I think it comes down to the best possible combination of maintaining the history while allowing for the new to come in,” Strong says.
The economics of luxury units
There is no formal definition or designation for marketing an apartment as luxury quality.
“Everyone’s interpretation is slightly different, but generally a luxury apartment is a newer apartment with more amenities than your average apartment building,” says Eric Jackson, director acquisitions and development for The Stabile Companies, a construction company based out of Nashua.
The profile of the average resident in downtown Manchester has changed significantly.
From 2019 to 2025, the number of downtown residents with a college degree increased by more than 26%, according to real estate software company Placer Labs. The median household income also rose by a whopping 126%, from $36,000 to $81,700.
Jackson points to the pandemic as a turning point that made New Hampshire in general more attractive.
Employees with remote work or retirees from Boston, New York, Los Angeles, Seattle and elsewhere moved into the state.
It’s a welcoming trend for developers who see building opportunities not only in downtown Manchester, but also in Dover, Portsmouth and up and down the I-93 corridor.
“We saw an increase in sales through the pandemic and coming out of the pandemic. However, costs through that time were high and inconsistent so it made business very hard to manage,” Jackson says.
He recalls starting a project with lumber at one price point, and by the end of the project it had almost doubled.
Liz Hitchcock, founder of The Factory at Willow, benefitted from the unique timing of preparing for The Factory at Willow just ahead of the pandemic.
“We had bought quite a bit of our materials, and on top of that was Massachusetts doing construction during COVID and New Hampshire didn’t, so we had people coming up from the construction field.”
She points out it’s not the stone countertops or wood cabinets that make an apartment more costly. “It’s really about the mechanicals and electrical and plumbing. It’s really the HVAC that costs a majority of the money,” she says.
Those expenses plus the general cost of land and development lead to a pricey market.
“The land costs are so expensive and the development costs are expensive, so in order to make the numbers work you have to charge higher rents,” says Amy Chhom, a broker/consultant who has worked with developers in Manchester and is chair of the Manchester Development Corporation Board.
She calculated that 75 Canal, which paid $5.625 million to acquire 2.31 acres of land, spent approximately $2.43 million per acre or $22,500 per unit.
A 500-square-foot studio at 75 Canal costs $1,888, one-bedrooms range from approximately 700 to 800 square feet for $2,254 to $2,578 and two bedrooms and a limited supply for three bedrooms are approximately 1,000 to 1,100 square feet for $3,000 to $3,400.
Chhom says multifamily developers must charge higher rents to achieve stabilization within a certain number of years to mitigate investor risk.
Meanwhile, an unfurnished studio at The Factory at Willow leases for $1,740 for 472 square feet or $1,985 for 765 square feet. With access to a fitness center, outdoor space and walk-out patio, it could be labeled luxury, but after some debate Hitchcock decided against it to appeal to artists, gig economy workers and traveling nurses.
A more than 500-square-foot apartment one bedroom at The Residence at 1000 Elm, converted office space developed by Brady Sullivan, runs at $2,100.
High interest rates are making acquiring financing harder for developers who don’t have the net worth to put down more equity, Chhom says.
Farrelly says these factors make it apparent that the only way to build housing at lower market rates requires government subsidies.
“It’s hard to deliver a quality product at a reasonable rent with the fact that steel and lumber and copper and all the things that go into a development pro forma (financial projection) and (high) interest rates, it’s hard to say I’ll just build low-income housing, you really can’t do it at today’s prices for construction materials. You’re going to have to get tax breaks and other ways to subsidize the pro forma for affordable housing. Not necessarily low income, but affordable.”
Housing affordability issue
While it may not be considered affordable or attainable to some renters, there is a train of thought that adding more of any type of housing helps relief pressure on the existing housing supply.
“You often see people deciding to move from a middle-income type of development to luxury,” says Hitchcock.
“We always hope there’s a trickle-down effect because people want to upgrade,” Chhom says.
She has seen the rents go down in multifamily units she manages. Chhom could have marketed one residence for $2,400, but she chose $1,800 to keep the tenant of two years who had no issues. “That’s probably more prevalent for middle housing management. To maintain good residences, you have to lower it compared to those ones on Elm.”
But overall, “I do think we have a strong lack of affordability,” especially considering families in the city who rely on public transportation, Chhom says. “Those market-rate units are above what Section 8 housing assistance is willing to pay, so you’re forced to be in a lower quality product.”
“It does relieve cost pressure,” says Nick Taylor, director of Housing Action NH, which advocates for affordable housing across the state. “But it certainly takes time, and it’s not overnight and it can be challenging for folks. It can’t be the only solution; you still need housing for folks who are making well below the median income in the region or transitional housing options.”
Taylor lamented that the state budget cut the affordable housing fund by $25 million. The fund is used for low interest loans and grants to developers to build below market rate housing.
But he was pleased that Gov. Kelly Ayotte signed HB 577, which allows property owners in to construct detached accessory dwelling units.
And Farrelly noted the passage of House Bill 631, which requires municipalities to allow multifamily residential development in commercial zones.
“I think Gov. Ayotte has taken some steps and measures to eliminate some of the mystery getting approvals,” Farrelly says.
“If you do some of the things required of you in the design, it’s almost guaranteed you’ll get approval.”
While some developers have jumped on the luxury housing trend, Jackson has noticed the pendulum is swinging.
“Our observation now would be the demand for luxury apartments or new Class A apartments, at the top of the market, is slowing down a little bit and probably topping out,” Jackson says. “We are still seeing pretty strong demand in the middle of the market in the Class B type properties that are priced just under what you might consider luxury or Type A properties.”
Instead of affordable, Jackson clarifies the better suited term is attainable or reasonably priced homes.
He notes there’s tremendous demand for middle and lower price points, but again, high building costs and interest rates make it necessary to charge high rents to justify the construction.
Stabile Companies produces fewer multifamily rentals and instead is focused on townhome projects that make housing reasonably priced by building with some density and scale.
“That’s why you won’t find much (single-family housing) below $600,000 because rates are high and construction costs are high. That’s the magic for us is building in scale and using economy of scale to create projects that are still financially feasible.”
Taylor notes another model gaining traction.
“We’re seeing a bit more of employers and developers working together to develop employee housing and using either employer’s financial investment to make it more affordable or donating land or figuring out some other land to help make the math work.”
Dartmouth Health has four apartment developments in Lebanon and White River Junction, Vermont. Service Credit Union is exploring mixed-use development including apartments behind its headquarters.
“It’s a model still being developed, but we’re seeing it come up in conversations more and more, because it’s really hard to find something entry-level or retail or service workers can afford,” Taylor says.
These articles are being shared by partners in the Granite State News Collaborative. For more information, visit collaborativenh.org.
