Rob Riley of Canterbury is chairman of the Northern Forest Centre. The Center co-founded the NationalRural Development Innovation Groupwith the Aspen Institute and the US Endowment for Forestry & Communities.
Twenty years ago, my wife and I were young professionals determined to buy our first home before our daughter was born. We barely got there. It was 2001, in a periodic seller’s market where properties were listed for hours, not days, and cash offers above the listing price were common.
What we thought was a tough market then now looks easy compared to the past two years. Limits in skilled labor and developable land, unpredictable supply chains, and the gravitation to high profit margins in high-end homes have led to a lack of development in the price range that suits young people making their way in the world.
This middle-income housing crisis is raging in the northern forest states of Maine, New Hampshire, Vermont and New York and has been compounded by a COVID-induced pullback to rural communities attractive to city dwellers. (Sales of homes over $1 million tripled in Vermont in 2020 after languishing in the market before the pandemic.
This has made it even harder for people to find permanent housing in places that already have high rates of second home ownership. Using several Northern Forest towns as a sample, we see a large proportion of their homes classified as seasonal or occasional use: Colebrook – 60%; Lincoln – 70%; Greenwood, Maine – 51%; Greenville, Maine – 60%; East Burke, Vermont – 40%; Long Lake, New York – 96%; Blue Mountain Lake, New York – 96%.
While COVID has resulted in an increase in the region’s population and helped, at least in the short term, to deal with an overall loss of people from the region, unintended negative consequences abound, including significantly higher house prices. high and the conversion of many long-term rental properties into second homes. or short term rentals.
The impact on the community: young people are increasingly excluded from the housing market and quality rental accommodation is almost impossible to find.
Obviously, there are also serious challenges for low-income people in the housing market, but many federal and state programs support non-profit housing development limited to low-income residents. These programs do not fully meet the demand, but the resources and the political will exist and are increasing, to help the most vulnerable populations, and sophisticated non-profit housing developers use them in communities across the region.
The rise of high-end home ownership at one end of the housing spectrum and efforts to increase the volume of low-income housing at the other end leave very few options for middle-income residents. This has disastrous consequences for our communities and our economy. Ask any rural employer looking to fill vacancies and they will cite the lack of quality affordable housing as the number one barrier to attracting or retaining talent.
In some cases, employees drive hours to and from work, increasing their transportation costs and the associated environmental impact. In other cases, crucial jobs in hospitals, schools, and manufacturing go unfilled, further contributing to community decline.
Our region is in desperate need of middle income housing solutions.
At the Northern Forest Center, we address this issue in specific communities, building on our successful redevelopment work in Millinocket, Maine, and Lancaster, NH. We are now developers ourselves and creating a new model using embedded capital to upgrade existing downtown real estate and return it to productive use.
Our model allows for a longer lead time and greater investment than traditional developers can accept. In many cases, catalysing additional private investment requires undertaking the worst and most expensive renovations in a community. It’s slow work. It needs to be accelerated and replicated in many other communities to meet the scale of demand for middle-income housing.
Improved policies and funding targeted at city redevelopment would not only make it more attractive for developers to serve the crucial middle-income market, but it would also accelerate community and economic development goals.
We’re particularly interested in what’s developing in New Hampshire, where a proposed $100 million InvestNH housing incentive fund would be managed by the Department of Business and Economic Affairs. This is a bold experiment to help fill the critical housing gap that meets identified community needs and does not limit occupancy based on income.
The Vermont Senate is also considering a bill to direct more resources, potentially without income restrictions, with a focus on rehabilitating vacant downtown buildings for housing. This would energize city centers and encourage young professionals to settle there.
Some have criticized and will criticize these approaches. But we all have a stake in making our communities more accessible to middle-income people who want to live in a rural setting. Not only will they fill jobs, but they will also contribute to social vitality, shop at local businesses, and perhaps add children to local schools.
If we do this well by encouraging urban development, increasing energy efficiency and sourcing local materials, we demonstrate clear values that can attract people engaged in a broader sense of community and environmental stewardship.
The Center is all for being part of the solution and is eager to see new policies and approaches take root to support a new forest future in the North Forest.