Portsmouth council work session weighs RSA 79‑E tax‑relief tools to spur housing conversions

PORTSMOUTH, N.H. — Portsmouth staff and a New Hampshire Housing expert outlined how RSA 79‑E tax‑relief tools could be used to encourage rehabilitation and conversion of existing buildings into housing, while councilors and residents asked how the incentives would affect affordability and the city’s tax base.

Sarah Writesman of New Hampshire Housing opened the March work session with an overview of RSA 79‑E, describing it as enabling state legislation municipalities can adopt to offer temporary tax relief that helps bring older or underused properties back into productive use. "We're talking about RSA 79E today," she said, summarizing the statute's traditional use for historic preservation and adaptive reuse projects.

Writesman said the program typically freezes assessed value and provides relief in increments that can extend — under common local interpretations — up to 15 years when combined with added affordable units; she noted the newer residential property revitalization zones allow single‑family and small multiunit properties outside downtowns to qualify and that no property may receive 79‑E relief more than once in a 20‑year period.

She described housing opportunity zones as a separate option that currently has an affordability requirement — roughly one‑third of units at or below 80% of area median income under common interpretation — and said the law, as read by staff, offers up to about 10 years of relief under current language. Writesman also flagged pending legislation (referenced in the session as HB13 and as HB 1103) that would give municipalities more latitude to set affordability terms and would clarify that opportunity zones can apply to new construction; the presentation noted a proposed structure that would offer different relief durations depending on whether workforce housing is included.

Writesman and colleague Peter Britz walked the council through New Hampshire case studies ranging from small infill conversions in Lebanon to large mill and courthouse redevelopments in Manchester and Dover, which showed how temporary tax relief has helped projects clear financial hurdles and generated larger long‑term increases in assessed value. Using the Dover courthouse project as an example, Writesman said the developer accepted millions in foregone revenue tied to long‑term rent restrictions while the city forewent a smaller amount in near‑term tax revenue.

Councilors focused on how Portsmouth might implement the tools. Staff said municipalities commonly pair 79‑E adoption with development agreements or recorded covenants to secure public benefits such as below‑market units, public‑use infrastructure and financial analyses that test whether a project truly needs relief. Peter Britz described Dover's approach of requiring a fiscal analysis with several scenarios and recording commitments at the registry of deeds.

Public commenters raised concerns about outreach and unintended consequences. Gerald Duffy, a Pleasant Street resident, asked whether the residential revitalization option could be used to preserve small, naturally occurring affordable buildings or whether it could accidentally enable conversions that remove existing affordability. "I'd hate to see it happen and then have it be not naturally occurring affordable housing anymore," he said.

Another commenter, Mr. Kennedy of Picking Avenue, asked whether adopting 79‑E options requires a ballot question; Writesman said the statute is a local option that the council can enact by ordinance and that it does not require a voter referendum. She said adoption would then move through planning and zoning implementation and likely involve outreach so property owners and developers are aware of the incentives.

Councilors and staff weighed whether to adopt several program types at once or phase them, noting administrative monitoring needs and the city's leverage from a valuable real‑estate market. Council discussion also touched on using HUD fair‑market‑rent measures (as Dover does) versus state workforce rent limits to define affordability.

No ordinance or formal vote occurred at the session; staff will use the council's guidance to develop draft implementation language, outreach plans and any recommended development agreements or evaluation templates for future council consideration.