Workforce Housing Ordinance

Issues Addressed:
Affordable Housing Housing Costs Housing Options Multigenerational
A diagram with two versions of the same plot of land, one over the other. On the top version, the land contains only one single-family home with many wings and a large garage and a long driveway. This version is labeled with a large 'X' and "Regulations cannot mandate unaffordable housing everywhere." The version below contains two modestly sized single-family homes at the front of the site, and a driveway leading back to a cottage court, containing six small single-family homes around a central green. This version is labeled with a large checkmark and "Workforce housing must be allowed in a majority of residential areas."

What is it?

Workforce Housing ordinances are local laws designed to allow for the development of housing that is affordable to a typical working household. These ordinances respond to a RSA 674:-61, which was adopted in 2008, and which codifies a New Hampshire Supreme Court ruling that banned exclusionary zoning practices (see Britton v. Town of Chester, 134 N.H. 434 (1991)). That law requires each municipality to provide a “reasonable and realistic” opportunity for housing to be developed that will be affordable to a household making the median income. 

This “Workforce Housing” mandate includes a number of technical components:

  • Workforce Housing must be affordable to a renter household of three making up to 60% of Area Median Income or a homeowner household of four making up to 100% of Area Median Income.
  • “Area Median Income” (AMI) is the average income for a household in the region. Each municipality in New Hampshire falls into one of 14 regions, which are based on county borders. AMIs are calculated by the federal government.
  • “Affordable” here means that no more than 30% of total household income should be spent on housing (rent and utilities for renter households; or mortgage principal and interest, taxes, and insurance for homeowner households)
  • Workforce Housing does not include age-restricted housing.
  • Workforce Housing does not include developments in which more than 50% of units have fewer than 2 bedrooms.
  • Workforce Housing can be of any housing type (single-family, duplexes, accessory dwelling units, manufactured housing, apartments, etc.).
  • Workforce Housing does not include voucher-subsidized housing (e.g., homes rented with Section 8 vouchers).
  • Workforce Housing can be unrestricted homes that are affordable at their market price, or deed-restricted affordable homes provided by nonprofit developers or as part of inclusionary zoning programs.

Practically speaking, for a community to comply with the law, Workforce Housing must be possible to build in more than half of residentially zoned land, and multi-family developments of at least 5 units per structure must be allowed somewhere in town. Not meeting the laws’ requirements opens up a municipality to increased litigation, expedited appeals from builders, and courts’ overruling local permitting decisions.

Many zoning rules could help facilitate Workforce Housing, including allowing small alternative housing types, encouraging ADU development, right-sizing zoning rules, inclusionary zoning provisions, and more. The local laws called “Workforce Housing Ordinances” that explicitly respond to the State’s mandate are typically similar to cluster housing or inclusionary zoning laws—with relaxed zoning rules in exchange for deed-restricted affordable units. A Workforce Housing Ordinance could include any zoning tools, as long as they enable Workforce Housing development.

How can it help?

Workforce Housing Ordinances can help…

  • Address the rising costs of housing.
  • Provide more diversity of housing options.
  • Aid young people and new families housing opportunities.
  • Aid seniors looking to stay in their community.
  • Allow families to live near each other.
  • Aid economic growth and limit stagnation by providing housing for workers.
  • Compliance with the requirements of state law (RSA 674:58-61 and Britton v. Chester).

Getting Started

  1. Recognize and promote a Workforce Housing law’s impact on common master plan goals, such as increased housing options, increased affordability, economic development, aging in place, community wellbeing, and more.
  2. If undertaking a master plan, include adoption of a Workforce Housing Ordinance as a recommendation.
  3. Identify leaders on the Planning Board who can spearhead the effort. Identify other stakeholders, including members of the governing body, housing advocacy groups, developers (nonprofit and for-profit).
  4. Assess recent development trends. This will help determine if Workforce Housing is already economically viable in the majority of residentially zoned land.
  5. If the development trend assessment suggests that there have been challenges to the actual development of Workforce Housing, audit local laws and regulations to identify development barriers.
  6. Conduct a public engagement process to provide clarity about what the tool is, why it is needed, and how it is used, and to receive input on how to shape the ordinance.
  7. If challenges are identified in the regulatory audit, a Workforce Housing Ordinance could be a beneficial amendment to the local zoning ordinance.
  8. Draft and adopt a Workforce Housing ordinance to address barriers to development and meet the needs and desires of the community. If the law intends to operate as a modified cluster ordinance (as is common), the ordinance should specify the location where the law is applicable, a simple density calculation, dimensional rules for both the parent parcel and any subdivisions, process for keeping the homes affordable.
  9. Promote workforce housing development options to local property owners and developers.

Considerations

  • Communities do not need to pass a Workforce Housing Ordinance per se to be compliant with the law. As long as local laws do not impede development of workforce housing, the municipality is compliant. That said, if a community is not already compliant, framing any zoning or regulatory changes as a “Workforce Housing Ordinance” can help community members understand the purpose of the law and build support for housing opportunities.
  • A community cannot be compliant with the Workforce Housing mandate if it only nominally allows smaller, more affordable homes, without allowing them in practice. If dimensional and parking rules, subdivision rules, historic preservation rules, procedural rules, or other land use controls make Workforce Housing infeasible, the community is not compliant.
  • Public engagement is vital to the adoption of a Workforce Housing Ordinance. Public outreach sessions should occur before the ordinance is developed. Main areas should focus on: 1) why such an ordinance is necessary; 2) who will be living there; 3) what the tool is and what it is not; and, 4) discuss the specific elements that can be included in the tool (i.e. where it should be located, if some of the units should be market rate and some affordable, open space considerations and dimensions)
  • Management of the deed restrictions is a second concern. A common approach is to work with NH Housing to manage going forward. This can be a helpful approach for smaller communities.

State Law

Case Studies

Resources

Related Tools

A drawing showing an aerial view of same plot of land three times. Above there is a version labeled "Undeveloped," with a wooded area and a lake and stream. At bottom-left there is a version labeled "Conventional Subdivision." It shows the land divided into a ten parcels of relatively even size spread out across the area. There is a large amount of road and driveway area and many of the trees have been removed. At bottom-right is a version labeled "Cluster Housing." It shows twelve relatively small homes on twelve small parcels, clustered in two groups at the bottom-left of the area. The trees have been preserved, and only a small amount of road/driveway area connects the homes to the main edge of the area. Green trails wind throughout the parcel and connect to both the houses and the public road away from the houses. The Cluster Housing diagram has additional labels: "Preserved Natural Features," "Less Infrastructure," "Bonus units," and "Public access."
Cluster Housing
A diagram illustrating attached and detached Accessory Dwelling Units. There are two attached versions: one where a garage or addition has been turned into an ADU with a separate side entrance and one in which an attic has been turned into an ADU with stairs leading to a separate upstairs entrance. There is one detached ADU diagram, showing a small out-building with its own entrance and pathway behind a larger home.
Accessory Dwelling Units (ADUs)
A diagram showing the front facades of housing types and given labels: small single-family, townhomes (attached single-family), cottage court (grouped small single-family), duplex, stacked duplex, triplex, stacked triplex, four-plex, six-pack, courtyard apartments.
Missing Middle Housing Types
A diagram of a single-family subdivision with twelve homes. Eight homes in red are labeled "Base Market-Rate Units." Two homes in yellow are labeled "Affordable Units." Two homes in blue are labeled "Bonus Market-Rate Units."
Inclusionary Zoning