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Business groups and housing advocates clash over proposed local affordable-housing investment fees
Summary
Senate Bill 471 would let municipalities levy an "affordable housing investment fee" on new units that do not meet affordability requirements. Business and homebuilder witnesses warned the draft lacks fee caps and could make projects unworkable; municipal leaders and housing advocates debated whether funds should be retained locally or pooled for statewide impact.
The Senate Ways and Means Committee heard sharply divided testimony on Senate Bill 471, a bill that would enable municipalities to levy an affordable-housing investment fee on new housing that does not meet local affordability standards.
Nate Graves of the Business and Industry Association told the committee his group supports affordable housing but opposes the bill ‘‘because this legislation does not give parameters around how much this fee may be’’ and because additional unbounded costs risk making development projects fail to "pencil out." He warned the bill’s municipal-only spending language could create many small local funds that are too small to finance actual projects, leaving money “stranded.”
Brody Ducha, representing the New Hampshire Municipal Association, said the association requested the bill as a local tool for communities to raise funds without increasing property taxes. He described the proposed fee structure as modeled after impact-fee statutes — retained locally, with public reporting and an appeals process — and said municipalities seeking to support affordable units wanted flexibility in design.
Builders and realtors testified that the fee amounts to a penalty. A Phil from the New Hampshire Home Builders Association said any fee on housing ‘‘acts as a penalty’’ and risks being passed directly to homebuyers or renters; Joanie McIntyre of the New Hampshire Association of Realtors warned that higher closing costs and transfer-fee–based charges would exacerbate affordability problems.
Housing advocates struck a cautionary tone. Nick Taylor of Housing Action New Hampshire called the proposal well-intentioned but structurally problematic, saying small local trust funds ‘‘aren’t really enough to actually get a project built’’ in many towns and urging either statewide pooling or stronger links to existing lending and grant programs.
Committee members pressed witnesses on options to prevent stranded funds — including automatic forwarding of funds to statewide housing entities, regional pooling, and carving the fee out for larger multifamily developments — and on the distinction between these fees and traditional impact fees.
The chair recessed the public hearing until the prime sponsor can appear next week to present the bill.
