Rentpocalypse NH

Art by Lalo Alcarez

In Oregon last month, Governor Kate Brown signed a statewide rent control law. Like many states, Oregon has a shortage of rental properties. This law caps annual rent increases to seven percent plus inflation, which amounts to a limit of about 10 percent this year. It also exempts new construction for 15 years, and landlords may raise rent if renters leave. This isn’t doing a whole lot to help anyone, which is why landlords didn’t fight it. They were more afraid that the state would remove the current ban on local rent control policies. It will do little to help those who are at the low end of the income scale, who will continue to spend upwards of half of their income on rent.

The budget calculation formula from the 60’s that is still in use today, warns that we should spend no more than 30 percent of our income on rent. Anyone who spends more than that is considered “cost burdened.” Anyone spending 50 percent or more is considered “severely cost burdened.” It is not the wealthy that are “severely cost burdened.” It is your barista, the clerk at the cash register, the server taking your order, the person stuffing you into a chairlift, the person who cares for your grandmother - the workers of the service economy that we all rely on. It might also be your grandmother. Elderly people are a fast growing segment of the homeless population. 

A 2018 report by the New Hampshire Housing Finance Authority found that NH has a rental property vacancy rate of 1.96 percent. A vacancy rate of 4-5 percent is considered a balanced market for supply and demand. The survey found that the median rent for a 2 bedroom apartment has increased 19 percent over the last five years. In Carroll County that increase was 11.7 percent. It was 31 percent in Coos. The last recorded vacancy rate for Carroll County was 1.4 percent in 2016. The sample rate has been too small for the study for the last two years. 

The 2018 report from the National Low Income Housing Coalition found that a minimum wage worker earning $7.25 an hour would have to work 96 hours a week to afford a one bedroom rental. The average wage of a NH renter is around $15 an hour. The wage needed to afford a two bedroom rental is $22.32. Right now, the average rent for a one bedroom in NH is around $900. It’s upwards of $1200 for a two bedroom.

In addition to having very high housing costs, NH also has very low unemployment. So far that low unemployment has done little to raise wages. Employers are only now starting to grasp that housing is a big part of their problem. Housing is one of the many problems that New Hampshire has been ignoring for decades. Adequate housing might mean people with kids and that means funding their education. We fund education through property taxes, and NH has the second highest property taxes in the nation.

When the economy collapsed in 2008, people lost their houses and moved into rentals. That caused prices to skyrocket. The collapse of the economy created the so-called “sharing economy” where desperate folks were trying to monetize their possessions by ride sharing or renting out rooms in their houses. Airbnb caught on, and quickly became a way for privateers to buy up housing and rent it for big bucks. Both events meant fewer rentals for working folks. A lot of the people whose finances were destroyed in 2008 never got back to where they were. The jobs created in the aftermath of the 2008 economic collapse were largely low wage service jobs. While rental costs have increased in NH by 19 percent over the last five years, for most workers, wages have not. Homelessness, however, has increased by 10 percent in the last 4 years. 

NH has a problem. We have an aging population. We have a housing shortage. We have a lot of low wage jobs. Raising the minimum wage would help, but it won’t solve the housing shortage. Even if we raised the minimum wage to $22 an hour, there still wouldn’t be enough housing. Some ideas: there should be no new commercial construction that doesn’t include housing. Building an outlet? Build up: stores and restaurants downstairs. Housing upstairs. That should be true of every single ugly new store built along the Rt. 16 strip. Locally, there are many empty buildings. Some of them have been empty for years. Turn them into housing.  (Also, build more housing.) A tourist economy needs workers. An aging population needs caregivers – and housing, unless you want Granny living in her car. Until then, there are many helpful YouTube videos on how to live in a car.

“A man’s car is his castle,” – said  no one, ever.   

Published as an op-ed in the March 8 edition of the Conway Daily Sun Newspaper 

Deliberately Decreasing Our Means

Every biennium the legislature creates a new state budget. This budget is required to be balanced every year. This happens no matter what party currently holds the majority in the House, the Senate, or the Governor’s office. Right now the legislature is winding down. The Committee of Conference reports will have been voted on by the time you read this.

As always, the most interesting item to watch is the budget wrangling. The House got started a bit late this year; probably because the O’Brienistas created so many diversions that everything was late. On days when the House is session, bills that will be coming up for a vote fall into two categories in the calendar: Consent and Regular. The Consent Calendar is comprised of bills that come out of committee with a unanimous vote to either pass or kill. They’re generally non-controversial, and are easily dispatched with voice votes. O’Brienistas made it a “thing” this session to yank as many bills off the consent calendar as possible, just to gum up the works and create delay.

Rep. Neal Kurk chairs the House Finance Committee. Kurk has long been a fiscal conservative, but generally someone who could be sensible when the situation called for it. This biennium apparently Kurk was so giddy at GOP control of both houses that he’s thrown caution and good sense out the window in favor of ideology. He partnered up with Free Stater Dan McGuire to create a hastily written budget that was guaranteed to ensure that NH would continue lose ground economically and hurt a lot of people along the way.

The original version included $88 million in DOT cuts, which meant rest areas and some bridges would be closed. Half the workforce would be eliminated. Federal funds would be lost, the widening of I-93 would be jeopardized, and some 2500 miles of roads and 1000 bridges would have been turned over to cities and towns to pay for. Apparently Meals on Wheels was a socialist program that needed to be cut, and Service Link was completely de-funded. Dan McGuire proposed $2 million in cuts to the NH Veteran’s Home, which would have resulted in 25 veterans losing their place to live. Some changes (the proposed cuts to the Veteran’s Home were too much for even the most rabid members of the right) were made, and eventually the budget found its way to the Senate. The Senate made some cosmetic changes and added business tax cuts. Because when you claim that there isn’t enough money to adequately fund the needs of the state, the only thing to do is cut revenue! 

A recent op-ed in the Laconia Sun penned by Senators Jeb Bradley and Jeanne Forrester claimed that the Senate decided to reduce business taxes at the end of the budget process. On January 8, Senator Bradley introduced a bill to lower the business profits tax (BPT). On January 8, a bill Bradley co-sponsored was introduced to lower the business enterprise tax. (BET).  Those bills were both passed by the Senate and Bradley tabled both. The intent from the very beginning of the session was to lower business taxes. To pretend otherwise is disingenuous at best. They’re telling us on the one hand that we must live our means while the other hand is slashing the means we live on.

The lowering of the BET and the BPT are touted as the way to bring business to our state. The fact that businesses actually want good infrastructure, lower utility costs, and an educated work force is lost on our representative ideologues, who are firmly steeped in the kind of economic policies that have failed to work since the Reagan administration. NH is a wealthy state, yet we refuse to raise sufficient revenues to fix the things that need fixing and invest in the future. As a result, we have the 11^th worth infrastructure in the United States. Award winning NH civil engineer Darren Benoit tells us that if we start right now, it will cost us $1.5 billion to fix everything. NH also ranks at about 100^th place out of the 50 states for state funding of our university system. We want an educated workforce, but we do not want to pay for it. If a budget is a statement of our values, than it’s painfully clear that the budget writers don’t value our state or its people.

The budget for tourism, the second largest industry in our state was level funded in this budget. This will not hurt the southern part of the state. It is likely to impact the North Country. Be sure to thank your GOP representatives for voting against the best interests of our area. It’s also worth pointing out that this budget fails to invest in repairing our state parks, something that would also benefit the tourist economy.  

A variety of self-congratulatory legislators are boasting that the substance abuse treatment budget was increased. It was but the Senate added those increases. They were not in the original House budget. The increases came about because even the most rabid ideologues couldn’t pretend that there aren’t significant numbers of young people dying from heroin overdoses.

Another aspect of all of this that goes unmentioned by our budgeteers is the downshifting of costs. Items the state doesn’t adequately fund (like infrastructure) get passed on to the counties and municipalities, which will likely be passed on to you, in the form of an increase in your property taxes.  

As I write this, the Governor has stated her intent to veto the budget unless changes are made. The NH GOP is wailing about the need to compromise. Their definition of “compromise” appears to mean that the House Republicans get to write the budget; the Senate Republicans get to change it, and the Republicans of both bodies compromise with each other in the Committee of Conference. The CoC process included the compromise of closed door meetings with Greg Moore of the Koch funded Americans for Prosperity. After all that internal GOP compromise (with a dash of Koch-promise) the Governor is expected to meekly sign it, displaying her willingness to compromise.

This budget fails to address the needs of our state and blows a big hole in future budgets by cutting business taxes. It guarantees that nothing will ever get fixed properly, because we will have to live within our deliberately decreased means.

Published as an op-ed in the June 26 edition of the Conway Daily Sun newspaper.