Hanover residents will have a chance next month to show how committed they are to building new housing in their town.

Town meeting voters on May 13 will decide the fate of two zoning amendments designed to boost construction of small multifamily dwellings and new workforce housing built by nonprofit entities in the Upper Valley town of nearly 12,000 people.

If approved, the zoning changes could spur construction of hundreds of badly needed new housing units in certain sections of town, perhaps as many as 800 units through 2040, according to proponents.

But critics have expressed fear the zoning changes may merely lead to more off-campus housing options for college students and ultimately harm the quaint character of Hanover, which is home to Dartmouth College.

Either way, the final vote could serve as a harbinger of how other communities handle zoning issues across the state, amid an acute housing shortage across the state and growing pressure on communities to allow more construction of homes and condos.

Region Desperate for Homes

Scott Young, chairman of the Upper Valley Business Alliance, said his organization isn’t taking a position on the two zoning amendments. But he made clear the Upper Valley region is desperate need of more housing – and more affordable workforce housing in particular.

“We have businesses losing talent either through people moving out of the area because housing is too expensive or not accepting job offers because there is very little inventory available,” said Young. “Many businesses – and organizations and local government – find that their employees are being priced out of the region. That means that professions such as police/fire, teachers, and those in retail/restaurants cannot afford to live in the towns where they work.”

According to recent data from The Warren Group, publisher of the Registry Review, the median home price in New Hampshire has increased by 20.5 percent, to $482,000, over the past two years.

But in Grafton County, where Hanover is located, the median prices has jumped by 32 percent, to $400,000, over the past two years, indicating the growing popularity of the area – and the growing affordability challenge for working- and middle-class residents in the Upper Valley region.

Alex Taft, senior planner for the town of Hanover, said the proposed zoning changes are consistent with the town’s new “sustainability master plan” that, among other things, calls for more “housing opportunities” in Hanover.

The zoning changes are also consistent with recent town moves to allow construction of new “accessory dwelling units” in neighborhoods and additional Dartmouth student housing along West Wheelock Street in Hanover, Taft said.

What Proposed Zoning Does

The Hanover Planning Board approved the two proposed zoning amendments earlier this month, over the objections of some critics, setting up the final Town Meeting vote on May 13.

The first amendment would permit more “infill housing” in areas of town where water and sewer services are currently available.

The measure would effectively create a new “house-scale residential dwelling overlay district” where small multifamily buildings of up to four units could be built on smaller lots of land.

The goal, according to proponents, is to create a more “moderate density” of housing in certain sections of town.

The second amendment would make it easier for nonprofits to build workforce housing on land, via the loosening of regulatory restrictions tied to federal tax credits.

The measure is effectively aimed at, among other things, jump-starting a long-stalled workforce housing project on Greensboro Road in Hanover.

The first amendment dealing with “house-scale residential dwellings” is gaining the most attention.

Some have complained the measure could lead to more Dartmouth students living in newly built off-campus housing.

But Taft said that the amendment addresses such concerns via a “regulatory structure that nudges it away” from student uses, such as limiting how many unrelated people can live in new units.

The amendment would ultimately allow up to four units of housing to be built on lots, up from the current one to two units, whether it’s four units in one building or four units in two to three buildings on a lot.

Seeking Revival of Old Building Habits

Nick Taylor, executive director of Housing Action New Hampshire, a housing advocacy group, said allowing small-scale multifamily dwelling used to be the norm in New Hampshire, before many towns started to restrict construction to single-family homes only.

“It’s how historic New England homes used to be built,” he said.

Others town in New Hampshire and across the country are mulling similar zoning changes to allow smaller-scale multifamily housing, or so-called “infill” housing, in certain sections of a community.

“The idea is gaining popularity,” Taylor said. “They’re trying to get back to the way zoning used to be before single-family zoning.”

As for the second zoning amendment, the town five years ago transferred about four acres of land on Greensboro Road to Twin Pines, a nonprofit housing group that hoped to build new workforce housing on the site.

But that project stalled due to regulatory and financial reasons, said Andrew Winter, executive director of Twin Pines, which developed and now operates the 120-unit Giles Hill housing project in Hanover.

The problem with the Greensboro Road project is tied to federal low-income housing tax credits that are allocated to states to distribute for residential projects. But New Hampshire has a cost cap on such projects, posing a financial challenge for developers, Winter said.

“It makes it harder to pencil in projects,” he said.

Density Could Help With Costs

Among other things, Hanover’s proposed second amendment would allow more dense housing to help lower costs, Winter said.

“That’s obviously something we support. It might make projects a little bit easier [to build]. We’re still in conversations with the town about potential development there.”

Hanover’s Taft agreed that the second amendment is meant to “take a little bit of the regulatory process” out of projects, making it easier to build nonprofit housing.

Taylor of Housing Action New Hampshire said Hanover seems to be on the right track when it comes to trying to build new housing that falls in between single-family homes and large-scale multifamily housing complexes.

He said that “missing-middle housing” simply hasn’t been built in decades in many New Hampshire towns.

“It’s going to help,” he said of zoning changes that encourage denser and smaller-scale residential developments. “It will help with more attainable homes being built.”