The pandemic is receding, but it’s leaving behind a host of problems that will impact renters and landlords for months, if not years, to come. 

Like the home-sales market, the rental market has been marked in recent years by high demand, tight supplies and increasing prices across the state – and the pandemic has only exacerbated the challenges, real estate industry leaders say. 

And the situation could become more complicated when the federal government’s moratorium on rental evictions ends at the end of June, allowing landlords to finally push more aggressively ahead with evictions at the expense of struggling tenants. 

Though evictions may slowly free up some rentals and partially ease the supply crunch in the short-term, industry officials say the underlying problems of high demand, tight supplies and high prices will remain. 

“The pickings are slim,” Jim Lee, president of the New Hampshire Association of Realtors and a broker/agent at RE/MAX Shoreline in Portsmouth, said of affordable rental units anywhere in the state. “The rents are off the chart these days.” 

Long-term, the ultimate answer to the problem is more housing construction to meet the growing demand for both home ownership and rentals, with a recent industry report estimating the state needs about 20,000 new housing units to bring balance and stability to the statewide real estate market. 

But solutions to the housing shortage face the same obstacles that have bedeviled new-housing proponents for years: high construction costs, local opposition to developments, lack of affordable land and other challenges. 

Some hope the new state Housing Appeals Board, which was recently established to streamline the legal process for developers to appeal local rejections of their development proposals, will help in the construction of new housing. 

But Elissa Margolin, director of Housing Action New Hampshire, said the board, which some residents’ groups bitterly oppose, isn’t the sole answer to the housing shortage. 

“It’s not going to bring about massive change,” she said. “It’s an important tool in the toolbox, but it’s not going to [radically] alter things.” 

Renters Face Crisis 

There’s no doubt about the rental crisis facing the state. 

Rental prices for two-bedroom units rose year-over-year by 5 percent statewide in 2020 to $1,413, according to the New Hampshire Housing Finance Authority, despite an economic downturn that saw unemployment initially spike due to COVID-19 restrictions. Meanwhile, the rental vacancy rate rose slightly last year, but was still hovering around an historic low of 1.8 percent, according to NHHFA data. 

Over the past five years, rental prices have increased dramatically across much of New Hampshire, far above the rise in incomes for most residents. From 2015 to 2020, two-bedroom rents in Rockingham County increased by 28 percent, to $1,623, according to the NHHFA’s 2020 report. 

The New Hampshire Housing Finance Authority, a quasi-governmental agency charged with providing financing for housing projects across the state, is set to release another report next month that’s expected to show similar trend lines in 2021. 

“The market is just to so tight,” said NHHFA Executive Director Dean Christon. “It’s a tough market – and a challenging market.” 

The tight rental market is most severe in portions southern New Hampshire, the most densely populated part of the state near the Massachusetts border, said Christon.  

But all areas of the state are seeing rent increases, such as Grafton County, home to Dartmouth College and major medical institutions that employ thousands in the area. Even Coos County has seen rent prices increase by 12.4 percent over the past five years. 

Severe Supply Shortage 

Rents have only gotten worse since the pandemic, said Scott Godzyk, of Godzyk Real Estate Services in Manchester, noting that units that went for $1,000 pre-COVID are now going for $1,500. 

The reason: A severe supply-and-demand imbalance driven by out-of-staters flocking to New Hampshire to remotely work, seasonal residents deciding to stay in the state full-time during the pandemic, and a federal eviction moratorium that has allowed renters in arrears to remain in high-demand units that others might want.  

In the Manchester area, Godzyk estimated that about 1 in 4 tenants are not paying rent and yet are allowed to stay put while the federal eviction moratorium is in place – and that’s keeping the supply of available units tighter than normal. 

“Because they can’t be evicted, it’s limiting the number of available [units] on the market and the prices are being driven up,” he said. “It’s a logjam.” 

With the federal moratorium on evictions expected to end on June 30, many units may theoretically be freed up, but the courts are currently clogged and it may take time to process all the eviction cases moving forward, industry observers say. 

Hope for the Future Seen 

In the meantime, new-housing proponents are hoping the new Housing Appeals Board can boost home construction a bit in New Hampshire.  

Indeed, the board last month issued its first-ever ruling, overturning the Francestown Planning Board’s January 2020 denial of a four-lot subdivision by Ronald J. Shattuck Jr. and Melissa Shattuck.  

But the new housing board has its share of critics, mostly local residents and officials who say it’s an unconstitutional intrusion into local matters. 

Jane Aitken, founder of the Bedford Residents Association, said the board is designed to favor developers and to “flood towns with housing they don’t want.” 

“We can’t be squeezing in apartment buildings here, there and everywhere to make our towns look like cities,” she said, adding she worries that too many housing proposals could harm the rural and scenic nature of some towns.  

Aitken said she and others plan to keep pressing the Legislature to eliminate the board. 

But supporters of the new Housing Appeals Board say it’s necessary to promote new housing and to prevent long, costly and prolonged court fights over zoning and building disputes. 

The NHHFA’s Christon says that “one of the greatest impediments” to building new housing in New Hampshire has been local regulations – and creation of the housing board was meant to address that problem. 

“In the long-term, we think it will make a difference,” he said.