The New Hampshire House voted down a bipartisan bill meant to make it easier to build housing in the state, in a 188-173 vote last week that kills the legislation for the year.

Proponents of Senate Bill 538, known as the “HOMEnibus,” argued it would help dislodge barriers to housing development and give cities and towns new tools to increase housing units.

“The Municipal and County Government Committee heard much testimony that New Hampshire has a severe housing crisis,” wrote Rep. David Preece, a Manchester Democrat, in a report to the House ahead of the vote. “It is affecting businesses, the economy, and our labor market because of the lack of housing and affordability. This bill enables local governing boards to use another tool to address the housing shortage in their communities.” 

The latest version of the bill allowed cities and towns to create “office conversion zones,” within which developers could get property tax breaks to convert commercial real estate buildings into residential housing. It also allowed towns and cities to speed up changes to the zoning code: The bill allowed residents to empower their local councils or boards of selectmen to pass new zoning codes; currently zoning codes may be changed only once a year at town meeting. That empowerment of local officials would need to be approved by the town via a warrant article. 

And the bill would require that town and city planning boards consider alternative parking options when deciding whether to approve or deny a new housing development. That would allow developers to propose housing projects that don’t include new parking lots for residents but utilize existing public or private lots; the bill would require the planning board to seriously consider those proposals.

The bill passed the Senate unanimously. But a group of 170 Republicans and 18 Democrats voted to kill the bill in the House Thursday. Voting against that motion were 165 Democrats and seven Republicans. 

To housing advocates, the bill would have helped interested towns incentivize housing development and speed up the process, at a time when many businesses are struggling to find workers due to low housing availability. 

Housing prices and rents are at record highs, and the state’s rental vacancy rate is below 1 percent, a number that housing experts say is far below the recommended rate of 5 percent. And homelessness in the state increased by 30 percent from 2020 to 2022, according to the state’s annual point in time count and the latest report from the New Hampshire Coalition to End Homelessness. 

“A few simple adjustments to our zoning and planning procedures would encourage a modest increase in this desperately needed supply,” said Rep. Laurel Stavis, a Lebanon Democrat. 

But opponents took issue with each of the bill’s parts. Rep. Len Turcotte, a Barrington Republican and chairman of the Municipal and County Government Committee, argued that the Legislature should not allow towns to give property tax breaks for housing, because doing so could just raise property taxes for other businesses and homeowners in town. Turcotte argued the bill could allow town officials to give unfair tax favors to favored developers. 

Turcotte also opposed empowering local government officials to make changes to zoning codes without town meeting approval. In a report to the full House, Turcotte wrote: “The ability to change the municipality’s zoning on very short notice without time for the citizenry to consider and vote on the proposed changes is anathema to good governance.”

And he and others opposed the part of the bill requiring local boards to consider alternative parking solutions, noting that it “​​would actually require zero parking to be part of any development proposal,” which he said could lead to parking congestion in towns.

Rep. Diane Power, a Brookline Republican, said the office conversion zones could have the effect of forcing businesses to move out if their landlords decided to convert their office buildings to apartments instead.

“This bill is extremely ill-advised as it displaces business tenants, making them homeless when business space is converted to residential use,” she said. 

The nearly party-line vote was a blow to efforts by housing advocates to create a bipartisan coalition to pass zoning reform. 

The Republicans joining Democrats to vote against killing the bill included Reps. Joe Alexander, of Goffstown; Keith Ammon, of New Boston; Ross Berry, of Manchester; Jim Kofalt, of Wilton; Tom Mannion, of Pelham; Fred Plett, of Goffstown; and Joe Sweeney of Salem. 

But nearly twice as many Democrats broke from their party to kill the bill, including Reps. Peggy Balboni, of Rye; Karen Calabro, of Hollis; Mike Edgar, of Hampton; Sallie Fellows, of Holderness; Julie Gilman, of Exeter; Jeffrey Goley, of Manchester; Jaci Grote, of Rye; Cathryn Harvey, of Chesterfield; Jim Maggiore, of North Hampton; Kat McGhee, of Hollis; Nancy Murphy, of Merrimack; Catherine Rombeau, of Bedford; Rosemarie Rung, of Merrimack; Dianne Schuett, of Pembroke; Carry Spier, of Nashua; Charlie St. Clair, of Laconia; Mark Vallone, of Epping; and Jonah Wheeler, of Peterborough. 

Housing advocates expressed disappointment after the vote. 

“It’s hard to fathom that the House voted down the HOMEnibus bill in the midst of New Hampshire’s housing crisis,” said Elissa Margolin, director of Housing Action NH, an advocacy group. “However, housing advocates must remain energized, expand our coalitions, and continue to educate policy makers.”

The move to kill the bill was recommended by the Municipal and County Government Committee, which has often voted in recent years against housing bills that are seen to take away local control. But the vote also came as political leaders in both parties have emphasized the need for more housing. 

In early 2023, Speaker Sherman Packard formed the House Special Committee on Housing, which was tasked with exploring legislation that might help the state close its housing deficit. That committee has endorsed a number of bills that have passed the full House this year, including House Bill 1291, which would allow homeowners to build two accessory dwelling units by right, up from the current one. 

HB 1291 is currently in the Senate Commerce Committee; a public hearing is scheduled for Tuesday. But SB 538 was seen by observers as the most comprehensive approach to zoning. 

Speaking from the floor, Alexander, the chairman of the House Special Committee, expressed frustration at the lack of support for the bill.

“I’m not shocked that the Municipal and County Government Committee would recommend killing another bill related to housing,” he said. “Mr. Speaker, did you create a special committee for that very reason? Only time will tell.”