New Hampshire housing advocates say the new federal 21st Century ROAD to Housing Act will give developers more flexibility and incentives to build affordable units in the state. The bipartisan legislation, which became law in July, is a wide-ranging combination of more than 60 bills previously introduced in Congress.
Elissa Margolin, director of St. Anselm College's Initiative for Housing Policy and Practice, said the legislation will mostly modernize the country's housing regulations — much like updating a toolbox to reflect the times.
“It's like you used to have a drill that you had to plug in the wall, but now a lot of people use cordless drills,” Margolin said in a recent briefing on the legislation organized by New Hampshire Business Review.
Margolin said there aren’t a lot of new tools in the legislation, but it will help communities and developers navigate housing red tape. Here’s some of the takeaways for how the changes will affect New Hampshire.
Manufactured homes cost construction will likely go down
The ROAD Act no longer requires manufactured homes to be built on a chassis — a metal frame used for transportation on trucks. Today, few of these homes are transported from place to place, so a chassis is no longer necessary. Now a manufactured home can legally be placed directly onto a permanent foundation.
Sarah Marchant, chief operating officer at the New Hampshire Community Loan Fund, said this law will cut down on costs, potentially increasing supply of manufactured home construction in the state.
In a state where the median price for a single family home just hit $580,000, Marchant said that manufactured homes are often the only housing available under $200,000 right now, and aiding their construction will help first-time home buyers and people looking to downsize.
“These are actually affordable homes that you can purchase, build equity in for less than renting a two-bedroom apartment,” Marchant said. “So they're an incredibly important part of the homeownership story here in New Hampshire.”
Rental assistance for low-income rural renters can continue indefinitely
In 2015, 72 low-income Upper Valley families almost found themselves displaced with less than 30-days notice, until a developer bought their property last minute and kept it as subsidized housing. The reason for the abrupt change was a section in the U.S. Department of Agriculture Rural Development 515 Program, “a clunky program from the 1950s,” Margolin said.
Under the program, assistance for rural tenants was cut off once the property owner — who used USDA financing to create the affordable units — paid off their USDA mortgage.
That would happen “even if the owner wants to keep the property affordable and keep tenants in that housing,” said Jack Ruderman, legislative affairs adviser for New Hampshire Housing.
Now, existing rental assistance and property owners’ mortgages are no longer linked, so rural tenants can continue to get rental assistance, regardless of the owner’s mortgage status.
Duplicate environmental reviews will be cut for developers
The ROAD Act has several provisions designed to reduce duplicate environmental reviews and make housing development move faster.
Previously, developers had to get environmental approvals from both the U.S. Department of Housing and Urban Development and the USDA.
“That results in ridiculous inefficiencies and redundancies,” Ruderman said. He added that environmental reviews often lead to delays in the construction process, increasing developers’ costs.
The new legislation directs the two agencies to create a joint review process for projects receiving their funding.
“It’s really critical to shorten the time frame for those projects,” he said, “And the environmental review process is the biggest thing that tends to drag it out.”
Banks can invest even more in affordable housing
Banks are major investors in the Low-Income Housing Tax program, which funds multifamily affordable housing construction in New Hampshire. The ROAD Act raises the federal limit on how much banks can invest in the program.
Ruderman said the change will increase investment demand, eventually leading to developers getting more financing support when building affordable housing projects.
