New Hampshire rental availability rate well below national averages

For years, New Hampshire has had an unsavory distinction: the state with one of the lowest rental availability rates in the world.

The national rental vacancy rate is 5.8%, according to the US Census Bureau. The average in the Northeast is 4.9%. The target number recommended by housing economists as a sign of a healthy market is 5%.

New Hampshire’s vacancy rate is 0.5%.

The figure comes from Monday’s 2022 Residential Rental Cost Survey report, the latest annual snapshot from New Hampshire Housing and the University of New Hampshire Survey Center. The report, which is based on telephone and online surveys of 9,662 units across the state, is peppered with bad news for tenants and potential workers in New Hampshire.

Rents for all units in New Hampshire have increased 32% since 2017. The median price for two-bedroom units is $1,584 to $300 higher than in 2018. These increases appeared nationwide, too. Apartment openings are extremely rare, and median rents are more expensive than most people’s wages can bear.

The shortage is creating real hardship for tenants and non-tenants alike, noted Nick Taylor, executive director of the Workforce Housing Coalition of the Greater Seacoast, an advocacy group.

“Any community you go to right now, you see almost every business has a ‘Now Hiring’ sign right on the window,” he said. “And that’s because we desperately need workers and they can’t find rental accommodation.”

The problem affects workers trying to enter the market, Taylor said, but also families trying to expand their living space and seniors looking to downsize. And the shortage seems to be hitting New Hampshire hard.

“It’s definitely something that continues to be an eye-opener to New Hampshire’s lag nationally, even in the Northeast,” Taylor said.

Two-bedroom units are most expensive in counties such as Hillsborough, Grafton and Rockingham, where median rents range from $1,700 to $1,800 per month, according to the new report. They are particularly high in Portsmouth, at a median of $1,762, and Nashua, at $1,980.

“The survey results reflect a continuation of a theme that is of great concern to residents, business owners and state officials: there is high demand for apartments, very limited supply, low vacancy rates and pressure on affordability,” New Hampshire Housing Executive Director Rob Dapice wrote in an introduction to the report.

The dollar amount of rent only tells half the story. In Sullivan County, only 7% of two-bedroom units are priced below the median affordable rent, based on income, the lowest in the state. In Grafton and Hillsborough counties, that number reaches 8%. By comparison, Cheshire and Merrimack counties have 24% and 21% of units below the affordability threshold, respectively.

Statewide, a family income of $63,400 is needed to afford a median apartment, which is 131% higher than the actual state median, according to the report. In Grafton County, median rents are 160% higher than corresponding incomes.

Meanwhile, availability has plummeted, even in the most remote counties. In 2013, Coos County had a 9.5% vacancy rate among its units; in 2022, the vacancy rate was 2.7%. Belknap County, which had a vacancy rate of 7.5% in 2013, now has 0.7% of its vacant units.

The low availability of rental units in the state has persisted as homes have also become increasingly difficult to buy, with unusually low inventory levels, record prices and few new homes being built due to housing shortages. construction supply.

According to Ben Frost, deputy executive director of New Hampshire Housing, this difficult buying market has also inflated the rental market. A double whammy of high house prices and rising mortgage rates has kept the prospect of owning a new home out of reach for people at the lower end of the income scale.

“And so to the extent that people can’t buy, they’re going to rent, which puts more pressure on the rental market,” Frost said in an interview.

Competition among tenants also affects prices. The monthly rent for a one-bedroom apartment has increased over the past year, enough to approach the rent for a two-bedroom apartment in some areas, Frost noted.

This change could indicate that smaller and more expensive units are coming to market. This could show that developers are targeting their units at younger, millennial and Gen Z tenants, who may be fine with a smaller size and willing to pay more for a nicer building.

But it could also mean couples and families are increasingly being pushed into smaller one-bedroom units to save money, Frost said. Whether this turns out to be a long-term trend will require further research, he said.

For Taylor and other housing advocates, New Hampshire’s abnormally low level of rental housing availability adds urgency to efforts to build more affordable housing across the state.

The Workforce Housing Coalition of the Greater Seacoast is focused on advocating for more housing, Taylor said, with the goal of building support from residents and city officials near the Seacoast to change local zoning ordinances and build support for new units.

The housing crisis is forcing families to make tough choices and is having an economic impact on New Hampshire businesses, Taylor said. The solution, he added, is to help residents make the connection.

Edward N. Arrington