Workforce Housing Rules Focus on ‘Fair Share’

The Londonderry ordinance on Workforce Housing – called “Inclusionary Housing” in the ordinance – states its purpose is “to encourage and provide for the development of such housing within the town. It is intended to ensure the continued availability of a diverse supply of home ownership and rental opportunities for persons meeting the definitions established in the State of New Hampshire’s ‘Workforce Housing Statutes,’ RSA 674:58-61.”

In implementing the ordinance, Londonderry officials said they considered the region’s affordable housing need as defined in the Southern New Hampshire Planning Commission Housing Needs Assessment. Currently, according to Londonderry Zoning Board of Adjustment Chairman James Smith, there are no workforce or inclusionary housing units in Londonderry.

“There hasn’t been any new workforce housing built in town,” Smith said last week. “The rental units in town aren’t workforce housing and have been here for years, but there haven’t been any new ones built yet.”
According to GIS (Geographic Information Systems) Manager and Comprehensive Planner Jon Vogl, just because a housing unit or apartment or even a home’s sale price is within workforce housing parameters doesn’t make it workforce housing.

“There was a time when the prices of some homes were within workforce housing prices, but that didn’t mean those homes were workforce,” Vogl said. “In order to be designated workforce, the owner/occupier of the home agrees to sell the home at workforce dictated rates. With the homes on the market today, even if bought at a workforce comparable price, the owner is free to sell it at whatever the owner wants, so it is not workforce housing.

“The workforce housing that we’re looking at down the road are all rental units because the developer or landlord has agreed to maintain those units as workforce housing at set rental prices under the workforce housing guidelines, and when the tenant leaves, the apartment stays workforce,” Vogl explained. He said no owner-occupied workforce homes are planned.

Regional Needs
In a document titled “Housing Needs,” the Southern New Hampshire Planning Commission in 2010 notes that:
“While it is important for communities to periodically evaluate whether they are meeting their fair share of the region’s estimated workforce housing distribution, it should be understood that with respect to RSA 674:59, it is only necessary to demonstrate that they are providing reasonable and realistic opportunities for the development of workforce housing. A community needs only to demonstrate that they reach or exceed their fair share if the community intends to claim that it has met its fair share obligations and is therefore exempt from certain aspects of the new law. The significance of this methodology is that it represents one means of establishing an estimate of the number of standard affordable housing units, from a theoretical standpoint, that would be needed to accommodate workforce housing income households by the year 2015.

“This calculation allows communities five years beyond the publication of this report to plan for needed increases in the distribution of workforce housing units in the region,” the report continues. “The estimate produced by using the fair share models should be considered as a guide or goal for each community striving to increase the housing supply and provide decent, affordable housing for all levels of income. It provides a mechanism by which each community can assess its fair share need relative to other communities in the Southern New Hampshire region. Further, it provides a framework for the establishment of a cohesive affordable housing policy at the regional level.”

What’s Happening in Town
Town Planner Cynthia May said in an email that “there is no fixed number or percentage of housing that is required to be ‘work force’ in a community. It has to be reasonably provided for.”
She noted that the statute does not define “fair share” in relation to housing.
May referenced the New Hampshire Housing and Finance Authority’s “Meeting the Workforce Housing Challenge Guidebook” and noted that the law does not require “a certain percentage of housing as affordable in any community.”

Chapter 2 of that guidebook states “the State’s workforce housing statute requires all communities to provide ‘reasonable and realistic opportunities’ for workforce housing, including rental multi-family housing. Additionally, the law requires that such housing is permitted in the majority of the residentially zoned land in each municipality. For an opportunity to be reasonable and realistic, workforce housing must be ‘economically viable.’

“To achieve this,” the chapter continues, “the statute specifically states that lot sizes and densities required by local ordinances and regulations must be reasonable, but does not numerically define ‘reasonableness.’”
The chapter notes the Legislature intended to provide communities with “maximum feasible flexibility” in meeting their workforce housing obligation.
The statute allows communities to meet the requirement in one of two ways – by adopting ordinances and regulations that permit economically viable workforce housing in a majority of residentially zoned land, as Londonderry did, or demonstrating that the existing housing stock is “sufficient to accommodate the municipality’s fair share of the current and reasonably foreseeable regional need for workforce housing.”
Workforce Housing

Recently two developments have appeared before town boards for approval of a combined total of 198 units of inclusionary housing. Wallace Farm, a development slated for Perkins Road, was recently granted variances that include the designation of 120 of the proposed 240 units as workforce or inclusionary housing.
Neighborworks of Manchester is proposing to construct 12 buildings to be known as Londonderry Town Homes on Mammoth Road, just north of Trail Haven Drive. It would have 78 units within those 12 buildings as inclusionary or workforce housing.

According to the ordinance, there are two types of inclusionary/ workforce housing. “Workforce Rental Housing – where the rent plus utilities for the dwelling unit does not exceed 30 percent of the allowed individual household income (60 percent of the Area Median Income adjusted for a family of three, as defined by the U.S. Department of Housing and Urban Development as required by RSA 674:58)., and Workforce Owner-Occupied Housing – where the total cost of mortgage principal and interest, mortgage insurance premiums, property taxes, association fees, and homeowner’s insurance does not exceed 30 percent of the maximum allowed income of the purchaser (100 percent of the Area Median Income adjusted for a family of four, as defined by the U.S. Department of Housing and Urban Development as required by RSA 674:58).

The calculation of housing costs must be based on current taxes, a 30-year fixed rate mortgage, a 5 percent down payment, and prevailing mortgage rates within the region,” the ordinance reads. The recent Master Plan adopted by the town refers to this category of housing as “affordable housing,” according to May, and states, “While Londonderry remains a desirable place to live, the community lacks choices and high quality affordable housing, making it difficult for singles, young professionals, and retirees to find a place to live.

A lack of walkable destinations and shortfalls in the quality of the public realm further deter potential residents and visitors. A complex regulatory framework also suppresses the potential for investment by the private sector. “In order to respond to these issues, the Plan provides a new framework for growth to address quality of life while also seeking to have a positive impact on the economy, business climate, tax base, and the sustainability of the Town long into the future,” the Master Plan update states.

“The community overwhelmingly supports the idea of preserving and enhancing Londonderry’s natural areas while also identifying strategic areas to focus growth within walkable activity centers while leaving existing residential neighborhoods unchanged.

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