Lebanon City Hall. City officials are exploring zoning reforms, density bonuses and even partnering with private developers to build more workforce housing.

Anxious about the ever-higher cost of housing in the Upper Connecticut Valley, city officials in Lebanon are debating how they can take more aggressive action to address it. 

Under consideration: zoning reforms, an affordable housing demonstration project in cooperation with a developer or the local housing authority and changes to encourage more accessory dwelling unit construction. 

“My fear for our economy and for our employers is that we will lose some of that talent as it grows, it will go elsewhere,” Mayor Timothy McNamara told his colleagues on the City Council during an April 20 meeting held to discuss the topic. “You could work in Lebanon. You could work in Austin [Texas]. You could work in a lot of places where that single-family product is actually available.” 

Nestled in between the hills of the Upper Valley, the 14,282-person city’s restricted geography means most of the city is practically off-limits to homebuilding to house the tens of thousands who work at Dartmouth College in nearby Hannover, at the city’s Dartmouth-Hitchcock Medical Center or at any number of high-tech and manufacturing companies that have grown up in the bucolic community over the last several decades. 

Lebanon’s yearly median single-family home price hit $330,000 on 120 total sales at the end of 2021 according to The Warren Group, publisher of The Registry Review. That’s a 32 percent jump over the $250,000 on 143 total sales where it sat at the end of 2018. 

The town isn’t the highest-cost in the region – next-door Hanover took that prize with a yearly median sale price of $711,000 in 2021 across 63 sales. But that fact isn’t giving local leaders comfort. 

City Councilor Douglas Whittlesey told his colleagues at the April 20 meeting about how he moved to the area in his 20s after getting a job in the region and looking to raise a family. But today, he doubts he would be able to afford to repeat the experience, and worries about the broader effect on the city’s small businesses – not just the big employers like Dartmouth-Hitchcock, whose housing-driven hiring woes have made headlines in recent years. 

“There’s a crowding-out effect on our economy…the more folks spend [on housing] the less they can spend eating out,” he said. 

Multi-Point Plan 

Sewer capacity has been a major stumbling block for past efforts by private developers to build market-rate apartments between downtown Lebanon and the hospital complex on Mount Support Road. But city councilors said during the April 20 session that the believe the city should focus its own efforts on making room for smaller developments and developers than the large complexes proposed along Mount Support Road. The chief worry expressed at the meeting was that these large, market-rate complexes are still leaving many residents without any financially realistic options. 

“It’s important to think about what the market is not bringing. It’s not bringing the missing middle,” Councilor Karen Liot Hill said. “It’s not bringing something where unless housing is half [someone’s] wage, they can afford in Lebanon.” 

To that end, the city council is refining a multi-point resolution directing city staff to explore six different strategies selected over months of hearings and discussions. 

First, the city wants to explore how it can legalize “cottage cluster”-style developments, where small, stand-alone units are built around common green space or other amenities.  

Councilors also want to update local manufactured housing development regulations to reflect the current state of the art in that industry, as manufactured and modular homes can often be more affordable than traditional construction. 

The draft resolution discussed at the April 20 meeting directs city staff to propose increased density bonuses for new projects and investigate creating “housing opportunity zones” – an incentive program created last year by the state legislature. 

It also asks the city manager’s office to partner with the Lebanon Housing Authority and other residential developers to use some of the roughly 20 city-owned residential properties in Lebanon to build housing. One of these projects might even be a “demonstration project” in a “high-visibility” location, the resolution states, that could prove out an affordable housing concept for local developers to use. 

Lastly, the resolution calls for studying how modifications to Lebanon’s current accessory dwelling unit rules to help lower barriers to creating more.