A friend of Lincoln real estate broker Brent Drouin’s recently analyzed what he might be able to build on approximately 10 acres of vacant land in Woodstock.

There was certainly enough to construct a number of smaller, 1,300-square-foot housing units on the Grafton County property. But the friend concluded it would probably be simpler and more profitable to just build a single “second home,” perhaps for an affluent Massachusetts vacationer who could afford a larger and more expensive abode with all the bells-and-whistles amenities.

“He couldn’t make the numbers work,” Drouin, owner of Century 21 Mountainside Realty, said of his friend who was interested in building smaller and more affordable housing units. “They [home builders] just can’t do it with today’s high labor and constructions costs. It’s tough to build and still keep things affordable.” 

Welcome to New Hampshire’s North Country, where residents and business owners are experiencing a shortage of affordable housing as bad or worse than the shortage southern towns and cities are also seeing these days.  

Crunch Hobbles Businesses 

The housing problem in the mountains and lakes region may arguably be more acute than in other areas of the state, for a variety of reasons, not least due to the region’s more remote nature and the difficulty of getting contractors to build smaller housing units that average workers can afford, industry officials say. 

“The further north you go, the worse it gets,” Russ Thibeault, president and founder of Applied Economic Research, said of affordable housing challenges in New Hampshire. “Housing prices and rents up north may be lower than in other parts of the state, but the incomes are also lower – and yet it’s still expensive to build.” 

To be clear, Thibeault, whose economic and real estate consulting firm is based in Laconia, said there’s an affordable housing shortage in just about every corner of New Hampshire, with the statewide vacancy rate for apartments now running at about 1 percent. There’s only a three-month supply of homes for sale on the market today, he added, compared to the more traditional six– to nine-month supply of homes. 

In all, Thibeault estimates that the state needs roughly 15,000 to 20,000 new housing units just to stabilize the market. 

But those in northern parts of the state can’t wait for new housing to be built – and many recreational and hospitality businesses, such as ski mountain operators, are now resorting to offering potential employees subsidized housing perks or large monetary bonuses to work at establishments, officials say. 

“It’s an acute problem,” Victoria Laracy, executive director of the Mount Washington Valley Housing Coalition, said of the workforce housing shortage in her area. “We pretty much have a zero percent vacancy rate and we’re having trouble attracting people to live and work here.” 

Laracy and others know that offering employees subsidized housing or bonuses are mostly stopgap solutions to long-term problems. 

So that’s why Laracy and others are now pushing a new ordinance in Conway that would make it easier for contractors to build more housing units on smaller lots of land, as long as 25 percent of the units are deemed affordable. The ordinance, which is now winding its way through various town approvals, could win final passage later this year, Laracy said.  

More Interest in High-End Homes 

Scot Emond, president of the Mount Washington Home Builders and Remodelers Association, said restrictive zoning codes are part of the housing problem in Carroll County and elsewhere. Easing zoning rules will help contractors, he noted. 

But Emond, a construction subcontractor at Superior Insulation in Carroll County, said high labor and construction costs are also contributing to the shortage of affordable housing.  

“They’re all kind of tied together,” he said. “There are some [contractors] trying to build rental housing, but it isn’t easy. The call on the phone they get is usually for high-end housing.” 

The high cost of construction is one of the reasons why some are privately saying the state of New Hampshire may need to start subsiding the building of some new housing across the state – or at least come up with novel new ways to defray costs and boost construction. 

Janice Crawford, executive director of the Mount Washington Valley Chamber of Commerce, said that, at the state level, she’s like to see changes in current laws that she says favor tenants over landlords, something that also discourages construction of new rental housing. 

“I know of some [contractors] who won’t do workforce housing for that reason,” she says. 

As a result of such laws and other reasons, Crawford said, most contractors opt to build more expensive vacation homes, often for out-of-state customers, starting at $350,000 and up per home. The Coos County median single-family home sale price was $110,000 through November of last year according to The Warren Group, publisher of The Registry Review. 

George Reagan, a community engagement manager at the New Hampshire Housing Finance Authority, said there’s no one cookie-cutter solution to the housing crisis in New Hampshire. Every submarket is different, and so individual submarkets may require different solutions, he said, from looser restrictions on multifamily construction to more government-subsidized housing. 

The North Country and the area around Lake Winnipesaukee, for instance, is more dependent on the seasonal recreational and hospitality industries, while the southern part of the state is more reliant on tech, finance and other industries for jobs, he said. 

“The housing problem is a true challenge in the North County,” Reagan said. “We need to dig deeper into the problem. There’s a lot of questions there – and more answers to find.”