PELHAM — Pat Gendron fought his town to build 90 apartments, including 23 at below-market rents, on land he owned for nearly two decades.
The Pelham resident got a favorable ruling from the New Hampshire Housing Appeals Board last summer, received a variance from the town zoning board last winter and was moving ahead toward securing the Planning Board’s blessing this summer.
Then he learned this spring that voters in March had approved a warrant article on workforce housing that effectively reduced the project’s size.
“As far as I’m concerned, the warrant article was put in just to stiff me — just to stiff the workforce housing,” Gendron said in an interview.
Planning Director Jenn Beauregard said building more workforce housing is a “sensitive subject” in this town of 14,000 on the Massachusetts border.
“I think every place needs more workforce housing to a point, housing for everybody, all ages and incomes,” Beauregard said.
But by last Monday night, all the below-market apartments had been erased from the project, a move that will cost future renters $1,000 or more in extra rent each month.
Housing advocates across the state say builders are not constructing enough homes to meet demand in a state with escalating 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 one factor in the lower permit figures.
Town vote alters project
This spring, developer Bill Renaud struck a deal to buy Gendron’s land, contingent on getting the necessary approvals to build apartments after a previous developer left.
Gendron said he’s had at least five potential buyers back out on buying his property, blaming town officials.
Renaud said he believed he could have built more than 200 bedrooms on the 30.65-acre property but planned to build fewer.
That was before he learned about the warrant article, which limits him to about 130 bedrooms. So he shrunk his project.
“The warrant article allows less density,” Renaud said in early July. “It certainly becomes less feasible by the day,”
At its June meeting, the planning board brought up a new issue: Part of the largest aquifer in town is located under the proposed site. The town is entirely dependent on groundwater aquifers to supply water to residents, according to the minutes.
One board member called the aquifer “a precious resource that we need to protect.”
Renaud, a real estate investor at Reno Properties right over the border in Dracut, Mass., said he was “a little surprised” by talk of the aquifer, saying it’s bigger than just this property.
Renaud wanted to put 66 two-bedroom apartments — including 13 workforce units — on six or seven acres and possibly build a light commercial development elsewhere on the property.
Isolating those six acres “would be telling the voters of Pelham that their vote would be disregarded,” one board member told him.
Renaud later 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 bedrooms.”
Pelham’s new minimum land requirement for each bedroom in a workforce project means developers will get fewer housing units per acre.
Measures such as Pelham’s “limits or eliminates the prospect of getting workforce housing built in those communities,” said Ben Frost, deputy executive director and chief legal officer at New Hampshire Housing.
“Developers are in the business of building homes, and they need to make a profit to do it,” Frost said. “If they can’t make a profit, they’re not going to do it.”
So Renaud returned to the Planning Board last week with a new plan: 65 units that no longer included workforce housing.
Case sparked new zoning
Beauregard said the Gendron case motivated the Planning Board to create the workforce housing article.
“That brought to light they didn’t have any type of workforce housing ordinance” in Pelham, she said.
The Planning Board had established a workforce housing subcommittee, but it never had enough members show up to conduct an official meeting, Beauregard said.
Another subcommittee drafted the warrant article during public sessions. The board also held two public hearings, she said.
A voter’s guide sent to all homes and posted on the town website listed the article’s text along with an explanation. The article was “to clarify” where workforce housing would be permitted within the town, according to the guide.
“This warrant article will protect the town and sets forth a clear expectation that any and all builds, including workforce housing, needs to be built in line with the character of our town,” the guide said.
The full text of the proposed changes, including required square footage for workforce projects, was available at town hall and on the town’s website, according to the guide.
Voters in March approved the workforce housing article, 1,490-700.
Planning Board chairman Tim Doherty wouldn’t discuss Gendron’s project, since it’s an open case, or talk about Gendron’s complaints.
“I’m a personal friend of Pat’s, so I’m not going to 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.
A few board members at Monday’s meeting took issue with a letter from the project’s attorney threatening possible legal action against the town.
“I think it was a little harsh,” said board member Roger Montbleau.
Project consultant Joe Maynard of Benchmark LLC, a Londonderry firm offering land planning, civil engineering and environmental consulting services, said he wanted feedback from board members before he spends thousands of dollars developing more detailed plans to present to the board in about six months.
“Again, I just don’t want any surprises in the end,” Maynard said.
Workforce housing typically allows for a more dense concentration of units than is normally permitted by local zoning. In return, the developer must offer at least 20% of the units at a lower-than-market rent based on a government formula.
Pelham’s new workforce zoning, which requires 10,000 square feet of land per bedroom, took away that density advantage for Renaud.
All on the “same team”?
During last week’s meeting, Renaud tried to diffuse tensions with the board.
“We’re all on the same team, right?” he told the planning board. “We said that from the beginning”
Board member Danielle Masse-Quinn took issue with his characterization that “we’re all on the same team.”
At last month’s Planning Board meeting, she presented research regarding the town’s housing stock to say Pelham has sufficient affordable housing.
She said the median assessed value for a condo was $446,900 and asked the assessor’s office for a list of all the town’s existing housing stock — including mobile homes and houses on the water — with an assessed value of $446,900 or below.
The assessor’s office gave her a report showing 2,348 units of existing housing of various types assessed below that threshold.
A housing needs assessment for the Nashua region said Pelham needed to have 2,228 units by 2025 and 2,370 by 2040.
“Our town currently has 2,348 units of affordable housing, and at this time is accommodating its fair share of a current and reasonable foreseeable regional need,” she said, according to the minutes.
Over the past two years, the median sales price for a single-family home in Pelham was $582,500 and the median sales price for a condo was $493,000, she said. About a third of the 348 sales during that span were assessed at $446,900 or below.
The town’s median household income was $108,223 annually, she said.
The head of the Nashua Regional Planning Commission, of which Pelham is a member, said it sounds like Pelham is saying it has a sufficient amount of workforce housing — one of two provisions for complying with the state’s workforce housing law.
The state law is “not necessarily saying they don’t have to provide any workforce housing,” said Jay Minkarah, executive director. “It says they are in compliance with requirements of the statute.”
The state’s nine regional planning commissions are updating their regional housing needs assessments.
Plans call for determining the housing need and “coming up with some sort of fair-share methodology for showing how that need will differ from one community to another,” Minkarah said.
“We’ll look at the regional need and also look at how that breaks down by community,” he said.
Minkarah said the assessment project needs to be wrapped up by the end of 2022.
Paying more for apartments
For people looking to rent one of Renaud’s apartments in two years, they will pay a lot more.
Today, a workforce unit would rent for around $1,500 a month in Pelham compared with $2,500 or more at market-rate, Renaud said.
“The workforce was put in for low-income people who do not have the means to pay the high rate,” Gendron, the property owner, said in an email. “It doesn’t matter to me, but I feel bad that we are not taking care of the low-income residents.”
Renaud said he was pleased with the latest meeting.
Doherty, the board chairman, complimented 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 like it was when we were reading the package (with the previous plan).”
Saying the project at first glance probably met zoning regulations, Doherty said the updated proposal would create fewer neighborhood impacts.
It put “a lot of people’s minds at ease,” he said.