Search

Board of Aldermen

City of Nashua
229 Main Street Lori Wilshire
Nashua, NH 03061-2019 President, Board of Aldermen

(603) 589-3030

October 19, 2020

Susan K. Lovering, City Clerk
City of Nashua

229 Main Street

Nashua, NH 03061-2019

Dear Ms. Lovering:
Please be advised | am hereby calling a Special Meeting of the Board of Aldermen for Tuesday,

October 27, 2020, at 6:30 p.m. which will be held remotely relative to a presentation on affordable
housing.

Thank you.

Sincerely, Mahiie
Lori Wilshire

President

cc: Mayor Jim Donchess
Steven A. Bolton, Corporation Counsel

. Community Development
City of Nashua Planning and Zoning
. + ae Building Saf
Community Development Division Code tnforcement
City Hall, 229 Main Street, PO Box 2019 Ce eer ars amtission
Nashua, New Hampshire 03061-2019 Transportation
www. nashuanh.gov FAX

589-3095
583-3090
589-3080
589-3100
589-3085
589-3105
880-0100
589-3119

Date: October 21, 2020

To: Ald. Lori Wilshire, Board of Aldermen President
Jim Donchess, Mayor
cc: Board of Aldermen
From: Sarah Marchant, Community Development Director

Re: Nashua Housing Study

The Economic Development and Community Development Divisions have partnered with RKG
Associates Inc to complete a comprehensive Housing Study to better understand the dynamics in
Nashua and the surrounding region that impact housing supply and demand. The goal of this study was
to provide a data based sense of the housing market, an understanding of key housing factors and
provide a list of strategies for implementation. The presentation of this study will provide a summary of
key findings and discuss some of the recommended strategies for implementation.

As the City is embarking on the 2020 Master Plan this study provides a very solid background to have
meaningful conversations about housing, land use and zoning over the next nine months or so. These
conversations will specifically relate to many of the implementation strategies that will be presented. It
is important to remember the current housing situation was not created overnight, but based on many
years of policy decisions and market forces. The strategies to change course will take time and a
measured and thoughtful approach, with community support, to improve our community and housing
for all Nashua residents.

1| Page

NASHUA HOUSING STUDY

October 2020

DRAFT FOR REVIEW

RKC Prepared by
ASSOCIATES Nc. KG Associates, Inc.

NASHUA HOUSING STUDY

City of Nashua

Jim Donchess, Mayor

Board of Aldermen Members
Lori Wilshire, President

Michael B. O’Brien, Sr., Vice President
Shoshanna Kelly, At-Large
Brandon Michael Laws, At-Large
David C. Tencza, At-Large

Jan Schmidt, Ward 1

Richard A. Dowd, Ward 2
Patricia Klee, Ward 3

Thomas Lopez, Ward 4

Ernest A. Jette, Ward 5

Ben Clemons, Ward 6

Elizabeth Lu, Ward 6

June M. Caron, Ward 7

Skip Cleaver, Ward 8

Linda Harriott-Gathright, Ward 9

Thank you to City staff for your commitment to providing information and feedback
throughout the housing study process. A special thank you to all who took part in

interviews and provided us with the local knowledge needed to tailor a housing plan to the
City of Nashua. Your expertise and feedback will help shape the outcomes of this plan.

Nashua Housing Study - 2

Purpose of this Housing Plan

The City of Nashua’s Housing Plan is intended to provide a meaningful sense of the
housing market, an understanding of key housing issues, and provide a list of
strategies for implementation. The report should serve as a platform for making
calculated policy and programmatic decisions. The information in the report is
intended to offer community leaders and stakeholders a basis for formulating
community-specific housing priorities, policy alternatives, intervention strategies
including land use and zoning decisions, and allocation of City and other resources.

As a framework for evaluating housing needs and determining appropriate action
steps, this document is not meant to be a prescriptive list of to-do’s but rather a
flexible plan that can shift with changes in Nashua’s local marketplace. The actions
in this document also point to timeframes to help the City identify the most critical
steps it should take in the short-term and those that may be more appropriate as
partners and funding are secured.

Recognizing that market supply and demand will shift with time and as the City
begins to act on the recommendations, it is important to track progress and
periodically update the data depicted in this study. Tracking progress on unit counts,
tenure, sale prices, rent rates, affordability, code violations, etc. are important
indicators in determining whether the current path of implementation is effecting
change in a positive and equitable way. Plans should be treated as living documents
to be evaluated and updated over time.

RKG

ASSOCIATES INC

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

FU

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

IVERFReINT
-ANDING
Pee TNC

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