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RKG

ASSOCIATES INC

EXECUTIVE SUMMARY

Nashua is a city that anchors Southern New Hampshire but is also part of a larger metro area with
connections to employment centers across Massachusetts as well as points north like Manchester. The
City built out from an older industrial core along the Nashua and Merrimack Rivers evidenced by the
older housing stock and more densely populated neighborhoods that comprise the Downtown area. Over
the years, growth has emanated out from the Downtown core to form a variety of different
neighborhoods offering different housing types and styles at varying price points. The city also has
pockets of higher density housing, mostly rental apartments, scattered on larger sites to the north, south,
and east. Nashua is growing in both its resident population and employment base placing pressure on
the existing housing stock and creating price escalation for both ownership and rental units. The city’s
proximity to more expensive housing markets in Massachusetts has also made it desirable for young
professionals, young families, and retirees.

In 2020, the City initiated a Housing Study to better understand the dynamics in Nashua and the
surrounding region that are impacting housing supply and demand. The goal of the study was to provide
a meaningful sense of the housing market, an understanding of key housing issues, and provide a list of
strategies for implementation. Knowing the City is about to begin the 2020 Master Plan Update, the
Housing Study is intended to provide the background necessary to seed conversations about housing,
land use, and zoning.

The Housing Study found that Nashua’s housing supply has very limited vacancy in both the owner and
rental market as demand for housing of all types and price points continues to rise. A combination of
employment growth, regional migration patterns, and now the pandemic have more people looking at
Nashua as a place to put down roots. The increase in housing demand is driving up both rents and sale
prices. The average sale price for a home in Nashua has grown 19% since 2010, while median rents are
up 19% since 2013. Much of the growth and demand is being fueled by residents aged 55 and older and
are driving demand for smaller units that are comfortably housing single- and two-person households.
These new households are also bringing more money to Nashua. Since 2013, households earning over
$200,000 per year increased 60% meaning more households can afford to pay higher sale prices and
rents, thereby driving up housing costs for everyone else. The rise in housing costs will likely be felt most
acutely in the Downtown area where the City has the highest concentrations of renters, lower-income
households, and the oldest housing stock in need of rehabilitation. The Housing Study offers
recommendations for addressing these challenges and more.

Nashua Housing Study - 3

FIVE KEY CONSIDERATIONS FOR NASHUA & HOUSING

Nashua Housing Study - 4

GROWTH

The City is expected to continue to grow its
population and employment base. Today’s housing
stock will not accommodate this growth. How and
where does the City want to grow should be a key
consideration in the upcoming Master Plan.

AFFORDABILITY

Housing prices (sales and rents) are outpacing
what most Nashua residents can afford. This
means households having to pay more than they
should to live in the City. How does Nashua
preserve its existing affordable housing stock
while encouraging more to be built city-wide?

MINIMIZE DISPLACEMENT

Housing prices and incomes are rising rapidly in Nashua
creating immense pressure on the lowest income
households to keep up or move out. The displacement of
those households may result in less racial and economic
diversity in some neighborhoods and push those
households further from the jobs and services they depend
on. Making affordable housing available in more locations
across the City would provide more housing choice for the
City’s most vulnerable residents.

DOWNTOWN

Downtown Nashua offers tremendous opportunity
to add more housing, but also the greatest threats
for impacting lower-income residents. The City
must employ strategies that improve the quality of
the housing stock and encourage a mix of new
market rate and affordable housing to improve
quality life for all residents in the Downtown area.
Additional households in Downtown will also
provide more spending power which will benefit
local businesses too.

LEVERAGING RESOURCES

The City will need additional resources to address
the housing opportunities and challenges ahead.
Seeking partners who can help with housing issues
will add knowledge, capacity, and funding resources
to match the City’s current efforts. The City should
capitalize on strategic partnerships with non-profits,
housing agencies, banks, and employers.

ASSOCIATES INC

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Preset rl pnite & Market Conditions
* Population, Age, Race/Ethnicity
Household Composition
Education and Income
Employment
Housing Stock
Housing Tenure
Vacancy
Home Values
Rents
Cost Burden

Issues & Opportunities

* Issue Area 1: Accommodating Growth
¢ Issue Area 2: Ability to Pay
* Issue Area 3: Downtown Nashua

Recommendations

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af RSSORIATES INC.

DEMOGRAPHICS & HOUSING MARKET CONDITIONS

Population, Age, Race/Ethnicity
Household Composition
Education and Income
Employment

Housing Stock

Housing Tenure

Vacancy

Home Values

Rents

Cost Burden

ASSOCIATES INC

Demographics & Housing Market Conditions

KEY FINDINGS FROM THE DEMOGRAPHIC AND HOUSING MARKET CONDITIONS

NASHUA IS A GROWING CITY.

Nashua’s population has risen rapidly since 1970, adding
nearly 30,000 new residents. Growth is projected to
continue through the year 2030 with the city adding
another 8,000 residents between 2018 and 2030.
Nashua’s fastest growing age cohort are those residents
55 years and older, while middle age residents 35 to 54
are shrinking.

NASHUA’S POPULATION IS DIVERSIFYING AND WITH IT COMES
INCOME DISPARITY.

The number of Black, Asian, and Hispanic/Latino
residents increased between 2013 and 2018 but White
and Asian households continue to earn 2.5+ times the
income as Black and Hispanic/Latino households. This
has impacts on affordability, ability to pay for housing,
and concentrations of lower income households in
certain parts of the city.

ONE- AND TWO-PERSON HOUSEHOLDS ARE DRIVING GROWTH.

Single-person and two-person households increased 12%
and 22%, respectively between 2013 and 2018. These
two categories brought in nearly 1,500 new households
to the city. Larger households are not increasing at nearly
the same rate. This is translating into demand for smaller
units, particularly smaller rental units.

Nashua Housing Study - 7

NASHUA’S RESIDENTS ARE MORE EDUCATED AND HAVE HIGHER
HOUSEHOLD INCOMES THAN IN DECADES PAST.

Nashua saw its number of households earning over
$200,000 a year increase by over 60% from 2013 to
2018. In fact, nearly every income cohort grew except
those earning less than $50,000 per year. This correlates
with the rapid rise in educational attainment. Residents
with Bachelor's degrees or higher increased 11%.

HOUSEHOLD INCOME FOR RENTERS IS GROWING AT THE HIGHEST
INCOME LEVELS.

The number of renter households earning $75,000 or
more jumped significantly between 2013 and 2018. This
is likely fueling demand for newer, higher priced rental
units across the city and pushing prices upward as these
households can afford rents at the top of Nashua’s
market.

NASHUA’S HOUSING STOCK IS PREDOMINATELY SINGLE-FAMILY.

Single family housing comprises 86% of the residential
land area in Nashua. These units comprise 52% of all
housing units in the city. Buildings with less than 10 units
account for 93% of residential land area and 74% of all
housing units.

HOME VALUES IN NASHUA ARE RISING, RAPIDLY.

The demand for owner-occupied housing units in Nashua
has driven prices up significantly over the last ten years.
From 2010 to 2019, home values have appreciated 19%.
The median sales price for a newly constructed home in
Nashua is $407,439 while the median sales price of an
existing home is $321,198.

RENTS ARE ALSO INCREASING IN NASHUA.

Over the last five years, median gross rent rose 19% to a
high of $1,287 per month. The number of rental units
priced between $1,500 - $1,999 range grew 24% in five
years, the fastest of any rent range. Rent growth has
been driven by demand for smaller units, typically 1-
bedroom units.

DOWNTOWN NASHUA SHOULD BE A HOUSING FOCUS AREA.

The combination of high rental percentages, lower
incomes, racial and ethnic diversity, lower assessed
values, and older housing stock creates challenges for
stabilizing the housing in Downtown and maintaining its
general affordability. A balanced approach is required to
both introduce new market rate and affordable housing,
as well as strategic investments to improve the quality of
existing housing in the Downtown area.

RKG

ASSOCIATES INC

Demographics & Housing Market Conditions

Population and Age “ew
Total Population Change 1970-2030, City of Nashua Change in Population by Age 2013-2018
Source: NHGIS, ACS 2013, 2018, EMSI Source: ACS 2013, 2018
110,000 40%
, m Nashua mHillsborough
—— Nashua
100,000 30%
94747 96,040 25%
22%
90,000 50% 20%
‘ 86,605 86,494 1 ° 15%
80,000 , 9%
1 I Il Il ' ' ' 10% 6%
! 4% 5%
70,000 [
0% UJ r
60,000 ! 6
! ! I I I ' ' ! 9 -6% “0% 7%
55620 -10% “9% 8% 7%
50,000 : | 12%
20%
40.000 ' | ' 1 ! ! | I Under 18 18to 24 years 25to34years 35to44 years 45to 54 years 55 to 64 years 65+ years
, 1970 1980 1990 2000 2010 2013. =: 2018 2025 2030
NASHUA IS A GROWING CITY. NASHUA IS A RAPIDLY AGING CITY.
Nashua’s population, like Hillsborough County, grew rapidly between 1970 and 2000. The Nashua, like Hillsborough County, is experiencing a rapid aging of the resident population.
city experienced a leveling of growth between 2000 and 2013, while the county continued Residents over the age of 55 increased 22% between 2013 and 2018. Given that residents
to grow by 5.5%. Since 2013, Nashua’s population has grown by just over 2% and is ages 35 to 54 decreased over that time period, suggests some aging in place but also new
projected to continue to grow through the year 2030. Population projections show the residents ages 55+ are moving to Nashua from elsewhere. This correlates to the uptick in
city could add another 8,000 residents by the year 2030. Much of this population residential development with age restrictions or those that market to older residents. The
increase is predicated on having the housing to support new households over time. This city has also seen a sharp decline in the number of school age children over this five-year
likely relies on redevelopment at a higher intensity than seen in previous decades. period likely correlating to the decline in residents ages 35 to 54 who tend to comprise

family households.
Nashua Housing Study - 8

Demographics & Housing Market Conditions

Population and Age

NASHUA’S POPULATION IS DIVERSIFYING.

The total population of Nashua increased by
just over 2% between 2013 and 2018, but new
residents were more diverse than in the past.

Over the five-year period, Nashua lost 3,400
residents who identified as White and gained
5,200 residents who identified as a race or
ethnicity other than White. The most
significant growth was seen in Hispanic and
Latino residents. This group added 2,770 new
residents to the city. Residents identifying as
Mexican or Puerto Rican comprised 50% of all
residents identifying as either Hispanic or
Latino.

Nashua also saw an increase of 1,260
residents identifying as Black or African
American, and 1,000 residents identifying as
Asian.

Nashua Housing Study - 9

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

79%

73%

White

ASSOCIATES INC

Population by Race/Ethnicity

Source: ACS 2013, 2018

m2013 2018

13%
10%

7% 8%
a |

Black or African American Asian Two or more races Hispanic or Latino

Categories comprising less than 1% of total population not shown in this figure.

Demographics & Housing Market Conditions

Household Composition

HOUSEHOLDS ARE INCREASING AT A FASTER RATE THAN THE POPULATION.

Change in Household Composition 2013-2018

Source: ACS 2013, 2018

2013

% 11% 30% .
m@ Married Couple

Male

Non-Family Female

Family Households Households

Living Alone

@ Not Living Alone
% 12% 30%

2018

HOUSEHOLD COMPOSITION REMAINS RELATIVELY UNCHANGED.

Nashua’s household composition remained relatively unchanged
between 2013-2018. Approximately 61% of all households are family
households comprised of one or more related individuals living together,
of which 16% are family households headed by a single parent.

Single-person households account for 30% of all households in Nashua
and have increased by about 600 over the five-year period. Nationally,
we have seen a larger increase in single-person households due to
delays in marriage, divorce rates, and seniors living alone.

Nashua Housing Study - 10

Change in
Households
2013-2018

Source: ACS 2013, 2018

Households by
Size and Tenure
2013-2018

Source: ACS 2013, 2018

Households by
Age of Householder
2013-2018

Source: ACS 2013, 2018

ASSOCIATES INC

HOUSEHOLD GROWTH OUTPACING POPULATION GROWTH.

Between 2013 and 2018, the number of households
in Nashua grew by over 4% while population grew
by 2%. Nashua added just under 1,500 new
households over the five-year period. Householders
living alone accounted for 37% of that growth.

GROWTH DRIVEN BY 1- AND 2-PERSON HOUSEHOLDS.

One- and two-person renter households increased by
12% and 22%, respectively. These 1,500 households
are accounting for the more rapid increase in
households compared to total population. Larger 4-
and 5-person households, particularly owner-
occupied households, are not increasing at nearly the
same rate.

OLDER RESIDENTS ARE DOMINATING NASHUA’S HOUSEHOLDS.

Households headed by a resident 65 years or older are
driving much of the population and household change in
Nashua. Nearly every category of household composition
tracked by the Census (family and non-family) shows
increases in 65+ households since 2013. The largest
increases were in married-couple households and
householders living alone.

Demographics & Housing Market Conditions

Education and Income

Change in Educational Attainment 2013 - 2018

Source: ACS 2013, 2018

20%
15%
10%
- | i
0% []
-5%
-10%
-15%
No High High School Associates or Bachelor's Master's Professional or
School Diploma or Some College Degree Degree Doctorate
Diploma Equivalent
mNashua_ sHillsborough

NASHUA RESIDENTS ARE ADVANCING THEIR EDUCATION.

Over the last five years, the number of residents with a bachelor’s degree or higher
increased 11%. That translates into nearly 2,169 residents who earned post
secondary degrees. There is also a strong correlation between the increase in
educated residents and the increase in household incomes over the last five years.

Nashua Housing Study - 11

ASSOCIATES INC

Change in Household Income 2013 - 2018

Source: ACS 2013, 2018
70%
60%
50%
40%
30%

20%
10% JJ
7 s FFs

-10% L

-20%

-30%
Lessthan $25,000- $50,000- $75,000- $100,000- $150,000- $200,000+
$25,000 $49,999 $74,999 $99,999 $149,999 $199,999

mNashua_ sHillsborough

HIGHER INCOME HOUSEHOLDS ARE BECOMING MORE PREVALENT IN NASHUA.

Nashua households have become increasingly wealthier with the highest percentage
growth taking place in households earning more than $200,000 per year. Over the last
five years, Nashua saw a 13% growth in households earning more than $50,000 per
year. This was a faster rate than Hillsborough County (10%). Households earning at or
above $75,000 can afford homes priced over $250,000 and rents of $1,875 or more per
month.

Demographics & Housing Market Conditions

Income

Median Household Income by Race/Ethnicity
Source: ACS 2018

$100,000
$92,004 2018 Income
$90,000
$81,552

$80,000
$70,000
$60,000
$50,000

$40,000 $34,511 $33,275

$30,000
$20,000
$10,000

$0
White Alone Black or African Asian Hispanic or Latino
American

MEDIAN HOUSEHOLD INCOME OF WHITE HOUSEHOLDS IS 2.4 TIMES HIGHER THAN BLACK, HISPANIC AND
LATINO HOUSEHOLDS.

White and Asian households in Nashua have significantly higher household incomes
than Black, Hispanic and Latino households. This greatly impacts their ability to pay
rents and mortgages, contain cost burdening as prices escalate, and find affordable
housing options in the city. It may also be impacting their ability to enter the
homeownership market over time as prices continue to rise.

Nashua Housing Study - 12

Percent Non-White Residents ASSOCIATES INC
Source: ACS 2018

% Non-White Residents
0% - 9%

10% - 17%

GD 12% - 28%

GRD 29% - 45%

Higher percentages of non-white residents can be found in block groups
in and around the Downtown area which correlates with lower income
households and much higher percentages of renter households. Block
groups on the edges of Nashua also have higher percentages of non-
white residents influenced by high numbers of Asian residents.