I am writing today in support of Senator Bradley’s bill SB 15, (the Affordable Housing Fund), as it addresses the critical importance of public-private partnerships in order to make affordable housing a reality. Senate Bill 15 proposes a $10 million appropriation for state fiscal years 2020-21 into the Affordable Housing Fund. It also proposes an annual transfer of $5 million from the Real Estate Transfer Tax into the Fund.
The truth is that without a public- private partnership provided through the Affordable Housing Fund, affordable housing will not get built in the Mount Washington Valley, nor elsewhere in New Hampshire. This is due to the inherent costs of housing development including high property costs, infrastructure costs due to regulations, rising material expenses, and labor costs. Almost every state in our country, including red states and low tax states, has recognized that state housing trust funds play a critical role in financing and incentivizing the private market to serve a wider range of incomes. With the exception of New Hampshire, every other New England state has made major investments in their state housing trust funds, ranging from $37 million (Vermont) to $1 billion (Massachusetts). We are competing with our neighboring states for our workforce.
The Affordable Housing Fund was created by the legislature in 1988 to facilitate the development of affordable housing. The Fund typically provides below market rate loans to developers in order to leverage the investment of other private and federal loan resources. According to the National Housing Trust Fund Project, 47 states and the District of Columbia have created housing trust funds to encourage the development of affordable housing. Most states have a dedicated funding source, (typically connected to real estate transactions), to capitalize the trust fund. To date, New Hampshire has had no dedicated funding source and investments have been relatively small.
There is an affordable housing shortage in New Hampshire. The lack of affordable housing in our state is affecting workforce recruitment and retention. It is driving millennials and young families out of our state. It is increasing homelessness for working families.
I urge us all to recognize that an unfettered market today will not serve every member of our community. In order to sustain vibrant local economies, we need an appropriate balance. The public-private partnership has proven effective for other states. Private market vigilance, tempered by public mission, will result in housing that is affordable for every-day working people.
Senator Bradley’s Affordable Housing Fund bill embraces that balance. Let’s continue to move forward with a well-funded state housing trust fund.
Executive Director of the Mount Washington Valley Housing Coalition