PELHAM — Pat Gendron has fought his city to build 90 apartments, 23 of them at below-market rents, on land he’s owned for nearly two decades.
The Pelham resident won a favorable decision from the New Hampshire Housing Appeals Board last summer, received a waiver from the city’s zoning board last winter and was set to get the council’s blessing planning this summer.
Then he learned this spring that voters in March had approved a labor housing mandate article that effectively reduced the size of the project.
“As far as I’m concerned, the tenure section was put in place just to stiffen me up — just to stiffen up the workforce housing,” Gendron said in an interview.
Planning director Jenn Beauregard said building more workforce housing is a “sensitive topic” in this town of 14,000 on the Massachusetts border.
“I think every place needs more workforce housing to some degree, housing for everyone, all ages and all incomes,” Beauregard said.
But last Monday night, all below-market apartments had been dropped from the project, a move that will cost future tenants $1,000 or more in extra rent each month.
Housing advocates across the state say builders aren’t building enough homes to meet demand in a state with rising rents and record home prices. The state in 2020 recorded only half the number of building permits for housing that were issued in 2004.
Some advocates cite restrictive zoning as a factor in the lower permit numbers.
The municipal vote modifies the project
This spring, developer Bill Renaud reached an agreement to buy the land from Gendron, subject to obtaining the necessary approvals to build apartments after the departure of a previous developer.
Gendron said he had at least five potential buyers who refused to buy his property, blaming city officials.
Renaud said he thinks he could have built more than 200 rooms on the 30.65-acre property, but plans to build fewer.
This was before he learned of the article of the mandate, which limits him to about 130 rooms. So he scaled back his project.
“The mandate article allows less density,” Renaud said in early July. “It is certainly becoming less feasible day by day,”
At its June meeting, the planning board raised a new issue: part of the city’s largest aquifer is located beneath the proposed site. The city depends entirely on groundwater to provide water to residents, according to the minutes.
A board member called the aquifer “a valuable resource that we need to protect.”
Renaud, a real estate investor at Reno Properties just across the border in Dracut, Mass., said he was “a bit surprised” when talking about the aquifer, saying it’s bigger than this property.
Renaud wanted to put 66 two-bedroom apartments – including 13 labor units – on six or seven acres and possibly build a light commercial development elsewhere on the property.
To isolate those six acres “would be like telling the voters of Pelham that their vote would be ignored,” a council member told him.
Renaud then interpreted it differently.
“There’s nothing in the code that says you have to spread it out,” he said. “The commercial (project) would help subsidize the lack of rooms.”
Pelham’s new minimum land requirement for each bedroom in a labor-intensive project means developers will get fewer housing units per acre.
Measures like Pelham’s “limit or eliminate the prospect of having workforce housing built in these communities,” said Ben Frost, deputy executive director and chief legal officer of New Hampshire Housing.
“Developers are in the business of building homes, and they have to make a profit to do that,” Frost said. “If they can’t make a profit, they won’t.”
Renaud therefore returned last week to the Town Planning Council with a new plan: 65 housing units which no longer included labor housing.
The case triggered a new zoning
Beauregard said the Gendron case motivated the Planning Board to create the Workforce Housing section.
“It brought to light that they didn’t have any type of labor housing ordinance” in Pelham, she said.
The Planning Board had created a Workforce Housing subcommittee, but it never had enough members to hold a formal meeting, Beauregard said.
Another sub-committee drafted the terms of reference article in open sessions. The council also held two public hearings, she said.
A voter’s guide sent to every household and posted on the city’s website listed the text of the article along with an explanation. The article aimed to “clarify” where labor housing would be allowed in the city, according to the guide.
“This article of mandate will protect the city and sets out a clear expectation that all construction, including workforce housing, be constructed in keeping with the character of our city,” the guide said.
The full text of the proposed changes, including the square footage required for labor projects, was available at City Hall and on the city’s website, according to the guide.
March voters approved the labor housing article, 1,490-700.
Planning Council Chairman Tim Doherty would not discuss Gendron’s project, as it is an open file, or discuss Gendron’s complaints.
“I’m a personal friend of Pat so I won’t comment on anything he says because I don’t want to jeopardize my friendship with Mr. Gendron,” Doherty said after Monday’s planning board meeting.
At Monday’s meeting, a few board members took issue with a letter from the project’s attorney threatening possible legal action against the city.
“I think it was a bit harsh,” board member Roger Montbleau said.
Project consultant Joe Maynard of Benchmark LLC, a Londonderry firm offering land-use planning, civil engineering and environmental consultancy services, said he wanted advice from council members before spending thousands dollars to develop more detailed plans to present to the board in about six months.
“Again, I don’t want any surprises at the end,” Maynard said.
Labor housing generally allows for a denser concentration of units than is normally permitted by local zoning. In return, the developer must offer at least 20% of the units at below-market rent according to a government formula.
Pelham’s new labor zoning, which requires 10,000 square feet of land per bedroom, has taken away this density advantage in Renaud.
All on the “same team”?
At last week’s meeting, Renaud tried to defuse tensions with the board.
“We’re all on the same team, aren’t we? he told the town planning council. “We said it from the start”
Board member Danielle Masse-Quinn took issue with his characterization that “we’re all on the same team.”
At last month’s Planning Council meeting, she presented research on the town’s housing stock to say Pelham has enough affordable housing.
She said the median appraised value of a condo was $446,900 and asked the appraiser’s office for a list of all existing housing in the city — including mobile homes and homes on the water — with an appraised value of $446,900 or less.
The assessor’s office provided him with a report showing 2,348 existing dwellings of various types assessed below this threshold.
A housing needs assessment for the Nashua area indicated that Pelham should have 2,228 units by 2025 and 2,370 by 2040.
“Our city currently has 2,348 affordable housing units and is currently meeting its fair share of a current and reasonably foreseeable regional need,” she said, according to the minutes.
Over the past two years, the median selling price for a single-family home in Pelham was $582,500 and the median selling price for a condo was $493,000, she said. About a third of the 348 sales during this period were valued at $446,900 or less.
The city’s median household income was $108,223 a year, she said.
The head of the Nashua Regional Planning Commission, of which Pelham is a member, said it appears Pelham is saying he has enough housing for the workforce – one of two provisions to comply with the state labor housing law.
State law “doesn’t necessarily say they don’t have to provide housing for the workforce,” said Jay Minkarah, executive director. “He says they are in compliance with the requirements of the law.”
The state’s nine regional planning commissions are updating their regional housing needs assessments.
The plans call for determining housing need and “coming up with some sort of fair sharing methodology to show how that need will differ from community to community,” Minkarah said.
“We will look at regional needs and also look at how that breaks down by community,” he said.
Minkarah said the assessment project must be completed by the end of 2022.
Pay more for apartments
For people looking to rent one of Renaud’s apartments in two years, they will pay a lot more.
Today, a labor unit would rent for around $1,500 a month in Pelham, compared to $2,500 or more at market rates, Renaud said.
“The workforce was set up for low-income people who cannot afford the high rate,” Gendron, the owner, said in an email. “I don’t care, but I feel bad that we don’t take care of low-income residents.”
Renaud said he was satisfied with the last meeting.
Doherty, the chairman of the board, congratulated Renaud’s team.
“Thank you for the vision,” Doherty said. “I don’t want to say it’s impressive, but it’s way more impressive than when we read the package (with the previous plan).”
Saying the project on its face was likely compliant with zoning regulations, Doherty said the updated proposal would create fewer neighborhood impacts.
This reassured “a lot of people”, he said.