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New Hampshire’s $100 million housing investment, InvestNH, is starting to pay off.

“InvestNH was absolutely critical in allowing more housing to be built,” said developer Jack Franks.

Franks, president and CEO of Avanru Development Group, said InvestNH’s help was key to some of his new affordable housing projects in Newport, Swanzey, and Hillsborough.

“Hillsborough would not have happened,” Franks pointed out.

Polls consistently show housing costs are a top priority for Granite Staters, and many of the state’s employers say housing is one their biggest challenges in attracting quality workers. Using federal ARPA relief funds to get more apartments and homes built, InvestNH is making a difference, though there’s still a long way to go.

“This crisis is not going to be solved overnight, but we are working with local leaders to get them the resources they need to match housing needs in their community,” said Department of Business and Economic Affairs Commissioner Taylor Caswell.

Administered by the BEA, InvestNH has already impacted more than 4,657 new housing units throughout the state, according to Caswell, with more to come.

BEA worked through InvestNH to create a capital grant program to fund the development of affordable housing; a demolition program to assist municipalities in preparing for or addressing housing challenges and project developments in older dilapidated properties; a per-unit incentive grant program that awarded municipalities $10,000 per unit of approved affordable housing, and the Housing Opportunities program, which assisted 67 communities to review and develop planning and zoning strategies to facilitate appropriate housing in their towns.

“The goal with these one-time funds has been to help accelerate affordable housing units getting to market and setting the stage for more private investment in affordable housing statewide by providing incentives and resources to local communities,” Caswell said.

BEA used InvestNH to fund: $64 million for the Capital Grant program that impacted 1,605 new units; $16.2 million for the Per Unit Grants program that impacted 1,910 units; $11.5 for the Demolition Grants program that impacted 2,302 units; and $7.9 million for the Housing Opportunity Planning Grants program that went to 67 communities throughout the state.

BEA’s new state Housing Champions program will soon be able to continue the InvestNH programs, thanks to state general funds totaling $15 million.

Even with InvestNH, New Hampshire has a vacancy rate of around 1 percent or less, according to Franks, leaving Granite Staters to pay more for rent or looking out of state for a decent home they can afford.

“It’s beyond critical mass at this point. It’s at absurdity, the amount of housing that’s needed in the state,” Franks said.

Of his three new developments, two were fully rented soon after opening. Both the Swanzey and Newport apartment projects now have waiting lists, and the Hillsborough development is taking applications now.

The biggest obstacle to building more affordable housing that Franks encounters are the sometimes redundant and contradictory local regulations that slow construction, or stymie projects altogether. Franks hopes incoming Gov. Kelly Ayotte will work to streamline those regulations and cut the red tape that make the housing crisis worse. 

Ayotte told NHJournal she’s ready to help.

“Tackling New Hampshire’s housing crisis is a key priority for my administration — we need more housing for our workforce, our seniors, our families, and every community across our state,” Ayotte said. “As Governor, I’ll work to streamline the state permitting process, cut unnecessary red tape that creates barriers to construction, and bring stakeholders together to discuss how we can incentivize construction of more affordable housing while respecting local control. Working together, we’ll keep New Hampshire moving in the right direction.”

The chickens have come home to roost for New Hampshire’s housing market.

In May 2023, the state’s affordability index – a measure of housing affordability – hit its lowest point in the two decades it has been recorded.

Experts say the combination of high interest rates, restrictive zoning regulations, and lack of affordable housing is to blame.

The record low in affordability comes as median prices for single-family homes reached a record high of $465,000.

The affordability index for May was 66. According to the New Hampshire Association of Realtors, “The number means the state’s median household income is just 66 percent of what is necessary to qualify for the median-priced home under prevailing interest rates.”

For context, “That’s the lowest in NHAR’s recorded history and a 36 percent decline in two years. By comparison, the affordability index in May 2013 was 180.”

As a result, the market has taken a hit. “There were 1,489 single-family residential homes on the market in New Hampshire at the end of May, a 10 percent drop from a year prior,” according to the NHAR – 1.4 months’ supply of inventory.

A healthy, balanced market is generally 5-7 months’ supply of inventory.

Sales are also down, as “the 959 single-family residential homes sold in May marked a 22 percent drop from May 2022. In the first five months combined, sales decreased 21 percent in 2023 compared to the same period last year.”

Borrowing has become more expensive in the fight against inflation. In early May, the Federal Reserve raised interest rates for the tenth straight time by 0.25 percentage points, bringing rates to their highest mark in 16 years. Today, 30-year fixed mortgage rates are hovering at nearly seven percent.

However, the Fed is widely expected to keep interest rates unchanged when their Federal Open Market Committee meeting wraps on Wednesday.

While monetary policy is important, industry observers say the real problem is at the local level. At a time when housing affordability is at an all-time low in the state, zoning regulations are making it difficult to build affordable housing.

In a 2021 landmark study, Center for Ethics in Society Director Jason Sorens and the Josiah Bartlett Center for Public Policy found residential land use regulations at the local level were a major cause of rising housing costs in the state. As one of the most prohibitive states for residential construction, local regulations – from minimum lot sizes and bureaucratic rules to single-family-only, maximum height, and minimum parking requirements – hinder residential development.

And when the housing supply can’t meet demand, housing prices increase.

The New Hampshire Zoning Atlas, a user-friendly tool to understand local land use regulations, sheds light on the issue. Showing some “23,000 pages of zoning regulations in 2,139 districts in 269 jurisdictions” (according to the Josiah Bartlett Center), the map reveals how difficult New Hampshire townships have made building residential housing.

The Biden administration’s recent attempt to increase housing affordability nationwide was to issue a rule through the Federal Housing Finance Agency (FHFA) adjusting mortgage lending by federal guarantors Fannie Mae and Freddie Mac.

Having gone into effect on May 1, the new rule effectively means that home buyers with good credit will pay more to subsidize those with bad credit. According to The Wall Street Journal, “Home buyers with a good credit score over 680 will pay about $40 more each month on a $400,000 loan, and upward depending on the size of the loan.”

“Those who make down payments of 20 percent on their homes will pay the highest fees. Those payments will then subsidize higher-risk borrowers through lower fees.”

That rule will likely not have its intended effect and could actually worsen the problem. As Bruce Elmslie, chair of the UNH Economics Department, told NHJournal last month, the rule “creates perverse incentives when you’re incentivizing those actors who have lower credit. And increasing the fee on a higher credit score, that’s a disincentive to people from taking the most credit-worthy actions.”

Selling houses to people who cannot afford them, and subsidizing these high-risk borrowers, has a troubling recent history (think back to the 2008 housing market crash).

In an op-ed for the Union-Leader, state Sen. Donna Soucy and Rep. Matt Wilhelm, both Manchester Democrats, touted the housing funding included in the new state budget that passed with large bipartisan majorities.

“If you’ve tried to find housing in New Hampshire, you are acutely aware that the cost of rent is rising nearly 20 percent year-over-year, which is unsustainable for workers and young families. To alleviate this crisis, Democrats fought to include $25 million for the Affordable Housing Fund, $10 million for InvestNH, and $5.25 million for the newly formed Housing Champions program,” they wrote.

But as long as interest rates remain high and onerous zoning regulations are widespread, taxpayer dollars won’t be enough to create the estimated 150,000 new housing units the state will need by 2040. And with Tuesday’s report that unemployment in New Hampshire dropped to the lowest level ever recorded in the state at 1.9 percent, the demand for that housing won’t diminish any time soon.

New Hampshire ranks as one of the best states in the country to be a nurse, even as providers like hospitals and assisted living facilities struggle to staff up.

A new WalletHub analysis ranks New Hampshire as the fifth best state to be a nurse based on the strong opportunities for advanced training, high pay, and good working environments. Jan Carney, associate dean for Public Health and Health Policy at the University of Vermont, said this is an excellent time to enter nursing.

“The long-term outlook for the nursing field is outstanding,” Carney said.

Though Maine came in as the second-best overall state, the Granite State easily outperformed the rest of New England. Connecticut ranked 13, Rhode Island 25, Massachusetts 29, and Vermont is near the bottom at 42.

Among the data points used for the rankings, New Hampshire placed first when it comes to the number of nursing job openings per capita. The Granite State isn’t alone in New England when it comes to needing more nurses. Massachusetts, Maine, and Vermont all land in the top five states with the most openings per capita.

According to Susan Reeves, the executive vice president of Dartmouth-Hitchcock Medical Center, the state’s nursing shortage is driven by an aging population, high housing costs, and a lack of affordable child care. 

Reeves recently told WMUR that Dartmouth-Hitchcock, the state’s largest healthcare system, uses temporary staff and employment agencies to fill as many as 400 nursing positions because it cannot find permanent staff. New Hampshire faced a nursing shortage before the COVID-19 pandemic, and factors like the state’s lack of workforce housing have only worsened the situation.

“We’re dealing with issues such as child care and housing, which is a huge constraint to bring talent to our areas to serve in our hospitals,” she said.

Dartmouth-Hitchcock Medical Center in Lebanon is in the middle of one of the more expensive housing markets in the state. The healthcare leader is taking the housing issues head-on, developing its workforce housing developments in the hospital’s surrounding area.

Brendan Williams, president of the New Hampshire Healthcare Association, also saw a connection between housing and healthcare jobs. He supports Gov. Chris Sununu’s workforce housing initiative. 

“The governor is on the right track working to increase housing stock, though that will not produce immediate relief, obviously,” Williams said. But it is not enough by itself, he added.

“In the near term, the Medicaid increase the House authorized is essential to making caregiving more attractive. Wages have soared to record highs and are outside Medicaid means. The Senate, we hope, will do as much as the House, if not more.”

And more should be done to bring new nurses into the field and keep them working, says Rebecca Sutter, George Mason University nursing professor. Between the nurses in the Baby Boom generation retiring and the high burnout rate for new nurses, the need for nurses will continue to be a concern for years to come. Public policy leaders and healthcare facilities need to focus on a sustainable strategy to train and retain nurses.

“Healthcare organizations and policymakers need to address the nursing shortage through strategies such as increasing funding for nursing education programs, providing incentives for nurses to remain in the workforce, and improving working conditions for nurses,” Sutter said.

The Executive Council approved the first $50 million in funding for Gov. Chris Sununu’s InvestNH Housing Fund, an ambitious plan to deal with the Granite State’s housing crisis. 

“This initial $50 million investment will create 1,500 new rental units across the state, helping increase supply, drive down costs, and ensure New Hampshire is the best state to live, work, and raise a family,” Sununu said.

InvestNH is a $100 million investment plan to boost housing construction by covering the gaps in hard construction costs on affordable multi-family developments.

The plan uses money from the state’s portion of the $1.9 trillion American Rescue Plan Act. The fund will eventually direct $60 million toward developers, with $10 million going to the New Hampshire Housing Authority, and another $10 million earmarked for non-profit and small-scale for-profit developers. The remaining $40 million is going to municipalities to help streamline the zoning and planning process to get the projects built. There is also money that municipalities can use to demolish old structures and update zoning ordinances to meet current needs.

This first $50 million will be used for housing projects which will be held to affordability restrictions and construction completion deadlines within 18 months.

Both Sununu and his Democratic opponent, state Sen. Tom Sherman agree the current crisis in affordable housing availability is putting the state’s economic growth in danger. There are tens of thousands of high-paying jobs available in New Hampshire, but not enough potential workers can find places to live.

Sherman has released his own housing plan, which he said builds on Sununu’s $100 million investment.

While the council approved the housing funds, it stalled funding for a decade-old sex education plan a fourth time. No member of the council moved to vote on the $682,000 contract, leaving it in limbo.

The program is aimed at reducing teen pregnancy in Sullivan County and the city of Manchester, pockets of the state with the highest rates.

Republican councilors Joe Kenney, David Wheeler, and Ted Gatsas all previously supported the same program, but now cite concerns about parental rights when arguing against the contract. While parents must give permission for their children to participate in the program, details about what the curriculum exactly teaches are not available to the public.

Liz Canada, Advocacy Manager for PPNNE/Planned Parenthood New Hampshire Action Fund, blasted the move, saying it puts women and children in harm’s way. The council has previously voted to defund family planning contracts with clinics that also perform abortions.

“By gutting the family planning program and rejecting routine funding for after-school sex education, the Executive Council has jeopardized New Hampshire’s capacity to reduce rates of unintended pregnancy and sexually transmitted diseases in our state at a time when the landscape of reproductive health care nationwide is in chaos because of the U.S. Supreme Court’s decision to overturn Roe v. Wade,” Canada said. “Now is not the time to risk the ability of trusted community organizations to deliver what could be life-saving information and support.”

Thousands of housing units could be added to New Hampshire in the coming months if Gov. Chris Sununu and his allies in the state’s business community get their way.

Sununu unveiled details of his $100 million investment plan on Tuesday. He hopes it will alleviate the housing crisis that experts say is making it harder for employers to recruit workers and for young people to remain in the state.

Starting next week, developers will be able to apply for money from the new InvestNH Housing Fund, which will help cover the financial gaps in hard construction costs on affordable multi-family developments.

“We’re moving quickly. We don’t want to just talk about things in this state, we want to make them happen,” Sununu said.

Though New Hampshire’s economy is booming, the lack of affordable housing could put that growth in danger. There are tens of thousands of high-paying jobs available in New Hampshire, but not enough potential workers can find places to live, Sununu said.

“We just need affordable housing in this state to keep up with the level of economic growth,” Sununu said.

Elissa Margolin, director of Housing Action NH.

Businesses cannot find workers, and people are not taking jobs in the Granite State because there is nowhere to live. Ellisa Margolin, director at the non-profit Housing Action NH, said the $100 million fund represents a serious effort to address the crisis that impacts the state’s entire economy.

“The workforce shortage that we’re experiencing is directly related to our shortage of housing in this state,” Margolin said. “If it’s difficult for a new medical resident to accept his residency at an area hospital because he can’t find housing he can afford, you can imagine what it’s like for a single parent with children.”

Nicole Ward, general manager at the Copper Door in Bedford, is lucky enough to live in workforce housing located behind the restaurant. She said the potential for more businesses to be able to provide affordable housing for employees will make for better businesses and communities.

“I just think a project like this, being able to provide more affordable living for employees like myself, would lead to a better work ethic, more longevity and less turnover, and a better work environment altogether,” Ward said.

The InvestNH Housing Fund will use money from the state’s portion of the American Rescue Plan Act. The fund will direct $60 million to go toward developers. Of that, $10 million will go to the New Hampshire Housing Authority, and another $10 million is earmarked for non-profit and small-scale for-profit developers.

The remaining $40 million is going to municipalities to help streamline the process to get the projects built. There is also money municipalities can use to demolish old structures and for updating zoning ordinances to meet current needs.

Taylor Caswell, New Hampshire’s Business and Economic Affairs commissioner, said the state wants to encourage affordable multi-family developments, whether it is a large apartment project or a small Victorian home on Main Street that could be converted into a five-unit apartment building.

“The goal is to get more units online as fast as possible,” he said.

According to the Josiah Bartlett Center for Public Policy, a free-market think tank based in Concord, the unwillingness of communities like Manchester to allow more housing construction has limited their growth when compared to nearby communities.

Between 1970 and 2020, the total number of housing units in the Queen City grew by just 37 percent. In Salem, they grew by 76 percent, in Nashua by 80 percent, and statewide by 127 percent. As a result, Manchester’s population and economic growth also lagged behind.

“Because city officials chose to limit growth, Manchester’s population and economy have grown at a slower rate than the rest of the state as a whole,” wrote the Bartlett Center’s Drew Cline. “Artificially limiting the city’s housing supply created a drag on the city’s economic growth and cultural life.”

The state’s housing shortage, which is contributing to its employee shortage, is just one of the current challenges facing the state. Another is the recent announcement of soaring electricity rates from the state’s largest utilities.  Sununu recently announced a $60 million utility bill relief package that includes a one-time $100 dollar grant to some 600,000 electric ratepayers. He also has plans to address the looming home heating crisis that will take hold this winter as oil costs continue to skyrocket.

Sununu said Washington is to blame for rising prices that are hurting New Hampshire families.

Commissioner of the New Hampshire Department of Business and Economic Affairs Taylor Caswell.

“This energy crisis in America — the Biden administration has created a massive problem,” Sununu said Tuesday. “When it costs you twice as much to put gas in your car, it’s going to cost you at least twice as much to put home heating oil into your tank.”

Sununu’s Democratic opponent in November’s election, state Sen. Tom Sherman (D-Rye) dismissed Sununu’s efforts as too slow and lacking in transparency.

“New Hampshire’s housing crunch is making it difficult for families to pay their bills each month and companies to find workers,” Sherman said. “While Granite Staters have been struggling for years, Sununu delayed so long in distributing rental assistance funds that nearly $20 million in federal funds were reallocated to other states. Sununu was the last governor in the region to put ARP funds towards affordable housing and chose to create a brand new program with more red tape instead of efficiently investing in existing programs. We need to make sure this is a transparent process that helps Granite Staters, not just a handout to campaign donors during an election year.”

Sununu said he was working with House Speaker Sherman Packard, R-Londonderry, and Senate President Chuck Morse, R-Salem, to address the heating crisis using state surplus funds. Sununu’s plan would allow the state to expand eligibility for heating assistance so that more families would be able to benefit. He is not interested in waiting for Congress to change the rules to make the federal assistance program more accessible as Granite Staters struggle to heat their homes. 

“We are not going to wait for the winter to see if the feds get around to fixing their problem,” Sununu said.

Information about the InvestNH Housing Fund and how to apply can be found at www.invest603.com. 

Nashua is one of the best-run cities in the country according to a new WalletHub analysis. It finds the Gate City offers high-quality services within an affordable municipal budget. 

Nashua ranks fourth overall in the study based on metrics like financial stability, infrastructure, safety, health, the economy, and education. Nampa, Idaho tops the list followed by Boise, Idaho, and Fort Wayne, Ind.

There is no secret to Nashua’s success, city leaders said.

“It’s not that it’s magic, it’s just good old hard work,” said Nashua Alderman Mike O’Brien.

Mayor Jim Donchess said city hall staff and department leaders work at bringing the best services to residents at the most efficient cost.

“I know here in Nashua we are very careful with money,” Donchess said. “We look at every expenditure while also making sure we’re investing appropriately in our city services.”

According to the analysis, Nashua is tied for second place in quality of roads and fourth in lowest violent crime rate. The city made the top 10 in both the quality of the services and the lowest cost per capita. That is a rare combination.

Wendy Hunt, with the Greater Nashua Chamber of Commerce, said if Nashua has a secret it is the leadership and the dedicated municipal employees.

“I think the secret to Nashua is the departments work well together, elected officials work well together, and they’re very responsive,” Hunt said,

Aldermen throughout the city are willing to deal with constituent problems and work for solutions, she said. “They are always very on top of the needs of the community.”

O’Brien said Nashua’s leadership takes a long view when it comes to managing the city.

“I’m not doing this to make changes, but to be a custodian for the city,” O’Brien said. “My grandchildren will grow up in this city and I want to make it the best city we can afford to make it.”

Robert Wright, Senior Faculty Fellow at the American Institute for Economic Research, said many American cities saw the quality of life decline during the COVID-19 pandemic. Wright said poorly run cities suffered rising crime, school dropouts, increased unemployment, and increased municipal debt.

“All (the declines) were self-inflicted as shown by well-run cities that quickly dropped unnecessary COVID restrictions, nipped unrest in the bud, and maintained criminal deterrence policies.

Nashua continues to have low unemployment (2.3 percent) as the pandemic’s effects fade.  O’Brien said Nashua’s Police and Fire Departments have done an excellent job keeping people safe, and the city is even using a COVID-19 protocol–outdoor dining downtown–to its advantage. O’Brien said outdoor dining has become so popular the city plans to continue making it possible.

Nashua is not without its problems. O’Brien cited a lack of affordable housing in the city as a concern that needs to be addressed. He is confident the city will continue to work on improvements.

“We in Nashua understand the needs of the community, and we actively work hard to make the city a desirable city to live in,” he said.

Two New Hampshire cities made the top 20 despite being one of the smallest states. Manchester checked in at number 19.

In a new analysis of home value and purchasing power trends, New Hampshire ranks fourth in the nation, with home values up 6.1 percent in the last year alone.  Compared to the national average of a mere 2.3 percent increase, that’s good news for Granite State homeowners. In fact, some people are asking if the news is too good.

Housing prices are frequently mentioned by workers thinking of relocating to New England, in particular younger workers.  While rising home values can make existing homeowners happy, it makes relocating to New Hampshire that much harder for renters and would-be future buyers.

“We can say all day long that we want young people to move back here, but there is no place for them to live where they would like to live.” That’s the view of Carmen Lorentz, executive director of Lakes Region Community Developers. She told the Laconia Daily Sun: 

“Many of the young and talented workers that we are begging to stay or move to New Hampshire do not want to live in an apartment. Many of them want to own a house – that is part of the New Hampshire lifestyle they envision for themselves.”

And with New Hampshire home prices consistently rising faster than both the New England region and the rest of the nation, it makes that vision harder to realize. In an interview on NHPR last month, Executive Director of the New Hampshire Housing Finance Authority Dean Christon, described the NH housing market as “an environment where there’s price pressure and limited inventory of both [housing] up for sale and rental housing.  It affects lower income people more, and it affects people trying to purchase their first home.”

So are rising home values creating a crisis?  Mark Fleming says… not yet. Fleming is Chief Economist for First American Financial Corporation, the company that calculates the Real House Price Index (RHPI) rankings based on income, mortgage rates and an unadjusted house price index.  Fleming told NHJournal.com that, while New Hampshire housing prices are up, they still aren’t “back.”

“Our index for New Hampshire is a 68 on a 100 scale, 100 being the purchasing power of a homeowner in the year 2000,” he says.  “In real terms, New Hampshire is still 32 percent away from getting back to their year 2000 levels.”

A key factor in that relative affordability? New Hampshire incomes, which also rose last year. Personal income in the Granite State grew by 3.5 percent—the fastest in New England.

Still, Fleming says, unless something changes, the housing market could start having a negative impact on the rest of the economy by pricing out both young families and the skilled workers employers need. The issue, he says, isn’t on the demand side—even if interest rates doubled, there would still be a net increase in demand, Fleming estimates. It’s on the supply side.  There just aren’t enough housing units being built in New Hampshire for long-term price stability.

Bob Quinn, Vice President of Government Affairs for the NH Association of Realtors. agrees.

“We believe the best long-term solution is increasing housing stock and thereby maintaining our growing economy,” Quinn told NHJournal.com.  “The most significant impediments to housing from a public policy perspective are restrictive zoning laws. Some communities put up unnecessary obstacles to the development of housing, which increases the cost. We strongly believe in allowing developers to build more densely, therefore accommodating both the desires of home buyers while preserving New Hampshire’s natural resources.”

Data from the New Hampshire Housing Finance Authority appears to back this view. Their February 2018 Housing report found:

• A relatively low inventory of homes for sale, particularly under $300,000
• Housing permits (reflecting construction activity) of multi-family and single-family homes at half the level they were prior to the Great Recession (end of 2007)

In addition to increased supply, Fleming also urges New Hampshire leaders to promote education in high-skill, high-wage jobs.  “Your region is never going to compete on price,” Fleming says. “But you can encourage young people to pursue the high-wage jobs of the future to pay the housing prices of the future.”

The good news is that New Hampshire’s housing assets continue to increase in value. Perhaps the better news is that, with increased inventory and an educated workforce, New Hampshire has the public policy tools to keep from “valuing” itself into a housing crisis.

When Sen. Dan Feltes, D-Concord, introduced a bill Wednesday, he sought a $25 million appropriation to the state’s affordable housing fund. Instead, he’s walking away with $5 million at best.

Senate Bill 94 would have put $25 million in the NH Housing Finance Authority’s Affordable Housing Fund to do what its name suggests — create more affordable housing for Granite Staters.

“This is a competitiveness issue,” Feltes testified before the Senate Capital Budget Committee. “We have to think about housing. I think, quite frankly, if there is one bill that’s a top priority, this is it. We have to do something right now and something significant.”

This funding mechanism isn’t anything new. It’s been around since its creation in 1988, under former Republican Gov. John H. Sununu, to be a revolving loan fund that provides low-interest loans and grants to build, rehabilitate, or acquire affordable housing. It’s first appropriation was $4.5 million. Since then, there have only been a few times when the Legislature has added cash to the fund. The fund didn’t see another dime until 2002, when $5 million was added to it.

In 2007, during Democratic Gov. John Lynch’s administration, approximately $750,000 was given to the fund. In 2015, $800,000 was added, and in 2016 $2 million was appropriated, but that money was earmarked for housing for people with substance use disorders.

The appropriation last year came to fruition on Tuesday where city and state officials broke ground for the Families in Transition’s Family Willows Substance Use Treatment Center and Recovery Housing in Manchester. The expanded treatment center and recovery housing focuses on women, and mothers with children dealing with the opioid crisis. It’s expected to provide treatment for about 400 women. Gov. Chris Sununu and U.S. Sen. Maggie Hassan attended the groundbreaking ceremony.

Feltes said the lack of funding for affordable housing is a “workforce, jobs, and competitiveness issue.” Testimony from leading experts on affordable housing in the state said all three areas are connected and important for New Hampshire’s future.

Without affordable housing in the state, people have trouble finding a place to live and workers end up living farther away from their jobs. Sometimes that’s too much for employees, so companies are left with an inadequate workforce, and without a strong workforce, or affordable housing, the state won’t be able to convince businesses to come and set up shop.

“You’ll hear about how we need a stronger workforce and affordable housing to keep the young working families that are demographically and economically needed as we move forward,” Feltes said.

Feltes is right. Lawmakers have heard testimony and had meetings from advocacy groups, government agencies, and political experts on how New Hampshire’s aging population will impact housing, transportation, and health care costs.

Already, workers are feeling the crunch of high housing costs, spending approximately 60 to 75 percent of their income on housing each month, according to Elissa Margolin, director of Housing Action NH, a coalition of organizations and businesses advocating for expanded workforce and affordable housing options.

Currently, the statewide median rent in New Hampshire is approximately $1,206 a month, she said, which is a 15 percent increase from five years ago. The vacancy rate, a factor in what’s driving the rising rents, is at 2 percent statewide and about 1 percent near the larger job centers.

The Granite State has already fallen behind the rest of New England and most of the country in terms of providing funding for affordable housing.

Rhode Island voters recently approved a $50 million bond for their state’s housing trust fund. They previously issued a $25 million bond in 2012 and a $50 million bond in 2006. Vermont uses a percentage of their real estate transfer tax for its housing trust fund, which is about $9 million a year.

In Maine, which has a similar population size to New Hampshire and similar workforce challenges, regularly funds its trust fund through their real estate transfer tax, with about $6 million invested annually. In 2009, a $50 million bond was approved, followed by another $15 million bond in 2015.

Connecticut and Massachusetts have also recently appropriated hundreds of millions of dollars a year to affordable housing.

Dean Christon, executive director of NH Housing Finance Authority, said the fund gives them “a lot of flexibility into how these dollars are being used.” They can be spent on housing from homeless shelters to senior housing to workforce rental housing.

David Juvet, senior vice president of public policy for the NH Business and Industry Association, said for the businesses he talks to, workforce and housing are the top issue for them.

When asked by Sen. David Watters, D-Dover, if the state should have “some skin in the game,” he responded that “there is some legitimate policy reason why the state should be involved with helping to assist economic development.”

The issue of affordable housing, workforce development, and business competitiveness of the state is usually a bipartisan issue. Everyone wants to see New Hampshire succeed. Affordable housing, especially when it comes to providing relief for the substance abuse crisis, also receives bipartisan support.

The bill only had Democratic support though, including Senate Democratic Leader Jeff Woodburn and House Democratic Leader Steve Shurtleff.

So why aren’t Republicans jumping on board? Well, it’s most likely the price tag of the legislation — $25 million can be a hard sell. During the hearing, Senate Majority Leader Jeb Bradley asked a witness if they would the measure if it were a different amount.

The committee also has to tackle a more pressing issue with the unanticipated charge costing the state millions of dollars to convert several state-owned buildings to natural gas after Concord Steam Corp. announced plans to close this year. The Senate Capital Budget Committee will her testimony on that bill in the coming weeks.

Ultimately, the committee unanimously voted on an amendment to changed the $25 million appropriation to the Affordable Housing Fund to only $5 million, and then they recommended that the bill “ought to pass” when it goes to the Senate soon.

Some activists say any little bit can help “move the needle” some more.

“We need the state’s oar int he water to help steer the ship,” said Evelyn Whelton of the Mount Washington Valley Housing Coalition. “A small push at the state level would influence housing growth and send a signal to businesses and those who want to move here, that we are engaged in economic development and are serious about it.”

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