Skyrocketing rents and home prices have contributed to everything from rising homelessness to workforce shortages
By Paul Cuno-Booth, Granite State News Collaborative
Editor’s note: This article is the first in Granite State News Collaborative’s “Invisible Walls: Seacoast” project. The series produced in collaboration with Seacoastonline.com and Fosters.com, looks at how zoning laws, housing and other public policies have resulted in historically high rents and home prices, which have had consequential economic and social impacts on the area’s communities, residents and businesses.
Talia Walley has moved around a lot in the past two years.
First there was the landlord who told her to vacate the mobile home she was renting in Epping because he wanted to sell it — only to turn around and rent it to someone else. Then there was the apartment in Rochester that stank of cigarette smoke.
Now she needs to move once again — but everything she looks at is too expensive. A 250-square-foot apartment in Exeter going for $2,500 a month. A place over a garage for $1,990 that, because it was furnished, would have forced her to give up her own stuff.
Walley lives alone and juggles a few different gigs to make ends meet: health coach, restaurant server, house cleaner. She can’t be too far from her adult daughter in Exeter, who has health issues and sometimes needs emergency help with child care. But she’s not sure what she can afford.
“I’m just still looking and just praying for a miracle,” she said. “I’m 56 years old. I’m not gonna have a roommate.”
For many residents of New Hampshire’s Seacoast, housing costs are reaching a breaking point.
Skyrocketing rents and home prices continue to push people out of Portsmouth. Once-affordable alternatives like Dover, Somersworth and Rochester are steadily getting less so. Many people have to commute long distances just to find a reasonably priced place to live. Employers worry about workers leaving. Homelessness is getting worse.
Cities like Portsmouth and Dover are responding with zoning reforms and other changes meant to expand the supply of housing, and the region is adding new units at its fastest rate in two decades. But given the scale of the crisis, housing advocates say there’s a long road ahead.
“It took us years of underbuilding to get us here,” said Nick Taylor, the director of Housing Action NH, a coalition of businesses and nonprofits that advocates for more affordable housing. “It’s gonna take us a long time to get out.”
‘They have to look elsewhere’
Rising housing costs are an issue across New Hampshire. But the problem is especially acute on the Seacoast, which has become one of the state’s most expensive places to live. In Portsmouth last year, the median sale price for a single-family home approached $900,000, and it took a wage of $45 an hour to afford a typical apartment.
‘Even the folks who are making a moderate amount of income, they simply cannot afford a place to live here,’ says Craig Welch, executive director of the Portsmouth Housing Authority of the city’s high housing costs. (Deb Cram/Seacoast Online)
“Even the folks who are making a moderate amount of income, they simply cannot afford a place to live here,” said Craig Welch, executive director of the Portsmouth Housing Authority.
With the construction in 2022 of the Ruth Lewin Griffin Place, a 64-unit housing development downtown (where units go for well below market-rate rents), the PHA oversaw the city’s largest expansion of permanently affordable housing in decades, and it has more projects in the works. But Welch said they can’t keep up with the loss of “naturally occurring” affordable housing as older buildings are bought, renovated and turned into upscale apartments or condos.
“The story we hear from the people who apply for our housing is that they had a rent that was affordable to them, ‘but my landlord sold the building and they just told me that my rent is going to go up 700 bucks a month and there’s just no way I can afford that,’” he said. “That’s what we hear over and over again.”
As more and more people have been priced out of Portsmouth, nearby cities have seen their housing costs surge too.
The median rent for a two-bedroom apartment in Dover last year was just over $2,100, compared to $2,300 in Portsmouth, according to data provided by New Hampshire Housing. Meanwhile, the median home in Dover sold for $560,000 — an increase of more than $200,000 since 2019, according to the N.H. Association of Realtors. Rochester and Somersworth have seen similar spikes.
“Our children and grandchildren aren’t able to really stay here in the community,” said Rochester Mayor Chuck Grassie. “They have to look elsewhere to find affordable housing.”
The area’s housing crunch is reflected in everything from rising homelessness to workforce shortages.
“We're seeing much longer stays,” said Susan Ford, executive director of My Friend’s Place, a homeless shelter in Dover.
People who fell on hard times used to spend three to five weeks at the shelter before finding another place, Ford said. That’s changed in the past five or six years, as the rental market has tightened. With so little available, people with better incomes and credit scores are taking apartments that are a bit run down or in less desirable neighborhoods — units that used to be attainable for her clients.
These days, individuals are now spending three to five months at the shelter, and families even longer.
The region’s housing crunch is resulting in much longer stays – three to five months and for some families even longer, according to Susan Ford, executive director of My Friend’s Place, a homeless shelter in Dover. (Deb Cram/Seacoast Online)
“There’s a lot of landlords out there that we used to be able to count on,” who would be willing to rent to someone with a previous eviction or bad credit, Ford said. “That’s just not the case anymore.”
Taylor said the lack of housing is also a top concern for local employers.
“We hear from businesses that are offering good salaries, good jobs, and they have folks who want to take the jobs — but they can’t find a place to live,” he said. “They’re having people that accept the position and then have to turn it down.”
Restrictive zoning and lack of supply
Housing advocates and experts say the trends driving up costs on the Seacoast are an extreme version of what’s happening across the state.
The region’s desirability, high-quality jobs and proximity to Boston have drawn people to the area for decades — a trend that was supercharged during the COVID-19 pandemic as people fled big cities. But not enough new housing has been built to keep up with demand across the region.
After a building boom in the 1980s, residential construction fell in the 1990s and, after an uptick in the 2000s, it slowed further in the wake of the Great Recession, according to building permit data from the U.S. Department of Housing and Urban Development. In the 2010s, the region built fewer than half as many units as it did during the 1980s.
Along with economic cycles and rising labor and material costs, restrictive zoning codes have limited how much new housing can be built.
Large swaths of many Seacoast municipalities are zoned exclusively for detached, single-family homes. In Portsmouth, that’s all you can build in three-quarters of the city’s residentially zoned land, according to an analysis the research group MuckRock conducted on behalf of the Granite State News Collaborative.
And some of the surrounding towns allow little, if any, multifamily housing. As of 2024, towns including Madbury, New Castle, Newfields, Newington, Sandown and South Hampton did not allow anything larger than a duplex to be built, according to the New Hampshire Zoning Atlas, a comprehensive catalog of local zoning rules.
Even in the region’s four cities — Portsmouth, Dover, Somersworth and Rochester — any multifamily project of five or more units has to go through a hearing to get approved.
Minimum lot sizes, setbacks and other requirements further limit how much and what kinds of housing can be built. Outside of urban cores, most areas require an acre or more per home — making it hard to build starter homes or other smaller, more affordable dwellings.
“Everything, when it comes to housing, is essentially a math problem,” said Ryan Pope, senior director of multifamily development and finance at New Hampshire Housing, which finances affordable housing projects around the state.
Pope said zoning codes that favor single-family homes on large lots are one reason the development pattern on the Seacoast has tended toward more expensive homes. If a developer buys a 10-acre parcel and can build only four units on it, “then they’re gonna be $2 million houses” to make the project financially viable. If they can instead build 20 houses, each one will sell for much less.
“If you want things to be cheaper, you have to allow for more of the things to exist,” he said. “Density is the name of the game.”
Local reforms gain traction
The urgency of the housing crisis has spurred some Seacoast cities and towns to action.
Portsmouth, for instance, has rezoned an office park area to allow apartments and passed an ordinance allowing “co-living” developments with private rooms but shared living space. Dover allows developers to build extra units if they keep the rent below a certain rate. Exeter has created incentives for mixed-use developments in which a portion of units remain affordable.
And the rate of new housing construction has picked up, according to state permitting data. Portsmouth and Dover each approved more than 1,000 new housing units between 2020 and 2024 — a rate comparable to the 1980s building boom.
But that’s not the case everywhere in the Seacoast. Portsmouth, Dover, Rochester and Somersworth collectively accounted for nearly 60% of the region’s new housing units in the first half of this decade, despite representing a little over one-third of its population.
Some of the area’s towns have also seen increased housing construction in that time. Epping, for instance, expanded its total housing stock by 15% over five years with the approval of 451 new units. But others have lagged.
Portsmouth ‘could be at risk of becoming more of a tourist town or a seasonal town if we can’t build the housing we need,’ says Kara Anne Rodenhizer, executive director of the Home for All Coalition, which works to prevent homelessness in the region. (Deb Cram/Seacoast Online)
“Where we really need to have more traction is in the more rural areas, where the lot sizes are very large and really just catered toward single-family housing on multiple acres,” said Kara Anne Rodenhizer, executive director of the Home for All Coalition, which works to prevent homelessness in the region.
Efforts to expand the housing supply also face other hurdles, including rising labor and materials costs, higher interest rates and local pushback to projects, especially those serving lower-income residents. Welch, with the Portsmouth Housing Authority, estimated that an unsuccessful court challenge from some city residents added 18 months and $1 million to $2 million in costs to the Ruth Griffin Place project.
Pope said cities like Dover, which he used to work for, are doing a good job of encouraging more middle-income rental housing. But he said more state and federal funding is needed to build housing that’s truly affordable for low-income renters, which is not economically viable without public subsidies.
“We are seeing a lot of development occur,” he said. “I would say most of it is in and around the market rate. There’s an argument to be made that the more housing that’s produced, the more quantity there is in the market, that that in and of itself will drive down cost. I think the demand is still so high that we’re not going to experience any decreasing cost anytime soon in the Seacoast region.”
As of 2023, the regional planning commissions for Strafford and Rockingham counties estimated the Seacoast region would need an additional 19,000 housing units by 2040 to create a balanced housing market.
Rodenhizer said there’s no silver bullet to getting there. Rather, it will require pulling a lot of different policy levers at the same time, both at the state and local levels.
Ultimately, she said, what’s at stake is the very vibrancy that has drawn so many people to the Seacoast in the first place.
“Think about all the people in your day-to-day life that you interact with,” she said. If baristas, delivery drivers and child care workers can’t afford to live in the area, they’ll eventually leave. “And towns like Portsmouth, I think, could be at risk of becoming more of a tourist town or a seasonal town if we can’t build the housing we need.”
The “Invisible Walls: Seacoast” project is a continuation of the original “Invisible Walls” project, which focused on how Manchester’s exclusionary zoning laws reinforced areas of persistent poverty, impacting many aspects of community life, including crime, public health, affordable housing and access to economic opportunity. For more information, visit collaborativenh.org.