How Community Development Tax Incentives Have Benefited Primary States: New Hampshire

Published by Peter Lawrence on Friday, February 7, 2020 - 12:00am

With the presidential caucuses and primaries underway, it can be useful to highlight the importance and influence the main community development tax incentives have had on each of the early nomination contest states as a way to raise awareness and support for those incentives. These financing tools have made real, positive differences in the lives of low-income communities in every state.

This look at New Hampshire is the second in a series (which began with an Iowa profile) that will examine the effects of community development tax incentives in early primary states.

Politics

  • Democratic and Republican presidential primary: Tuesday, Feb. 11
  • Delegates: 33 democratic (24 pledged, 9 unpledged), and 22 pledged republican delegates
  • Allocation method: Proportional based on statewide results
  • Electoral votes: 4
  • 2016 Democratic primary election results: Bernie Sanders won New Hampshire by 60.4 percent to 38 percent over Hillary Clinton
  • 2016 Republican primary election results: Donald Trump won New Hampshire by 35.3 percent to 15.8 percent over John Kasich
  • 2016 general election results: Hillary Clinton won New Hampshire by 47.6 percent to 47.2 percent over Donald Trump

Demographic, Economic and Housing Background

A number of New Hampshire’s demographic statistics illustrate a healthy, thriving economy. According to the Bureau of Labor Statistics, the unemployment rate in New Hampshire (2.6 percent) is lower than the nation’s (3.6 percent). Poverty in New Hampshire is much less prominent – only 8.1 percent of the population is living below poverty level, whereas at a national level, 14.6 percent of the population is living below poverty level. Additionally, the most recent Census estimates that New Hampshire’s median household income is more than $10,000 higher than the nationwide average ($74,991 per year vs. $63,179 per year).

However, these promising statistics have not protected New Hampshire from the consequences of a rising, high-cost housing market. The rates of cost-burdened renters in New Hampshire and the nation are similar (45.2 percent and 47.4 percent, respectively). In New Hampshire, the median two-bedroom rent is higher ($1,122 per month) than the nation’s ($964 per month). According to the National Low-Income Housing Coalition, there is a shortage of 27,347 affordable rental homes in New Hampshire and according to the Census, a total of 36,043 severely cost-burdened renter households. Out of the extremely low-income households in New Hampshire (17,404 families), 68 percent are severely cost-burdened.  

Low-Income Housing Tax Credit (LIHTC) Investment

The LIHTC has been a vital resource for addressing the housing needs of the aforementioned low-income households, particularly since 100 percent of the LIHTC homes built in 2018 must remain affordable for more than 50 years. This extended use restriction has been continually written into New Hampshire’s annual QAP’s for at least a decade. Since 1986, the LIHTC has created or rehabilitated a total of 9,912 affordable rental homes using either 9 percent or 4 percent credits. In 2018, 213 affordable homes were financed with LIHTCs. Of these homes, 135 were new construction, 42 were substantially rehabilitated, and 36 were acquisition and rehabilitation. One hundred and twenty homes were acquired and rehabilitated using 4 percent credits.

Out of the population served by LIHTC properties funded in 2018 in New Hampshire, 33 percent are families, 14 percent are elderly, and 3 percent are people with disabilities. The average percentage of LIHTC properties targeted to rural populations between 2012-2018 is 26 percent, which reflects New Hampshire’s substantial rural population (approximately 37 percent of the state’s 2018 estimated population live in rural areas according to USDA's Economic Research Service). . The map below illustrates the geographical dispersion of LIHTC properties in New Hampshire.

 

Snapshot: LIHTC Properties and Poverty Rates in New Hampshire
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NMTC Investment

According to the New Markets Tax Credit Coalition, between 2003 and 2019, $566.6 million have been invested in New Hampshire qualified low-income community investments (QLICIs). The projects these QLICIs helped fund have created more than 4,000 jobs. For example, the New Hampshire Bindery building in Concord, N.H. is just one of one of 24 NMTC projects in New Hampshire that the NMTC has helped finance since 2003. Once a blighted and contaminated site of a gas station, the property has been developed into a mixed-use space of offices and retail spaces. New tenants include a bookstore, café and technology company.

HTC Investment (NH)

According to historic tax credit (HTC) data provided by the National Trust for Historic Preservation, the HTC has helped finance 22 projects in New Hampshire since fiscal year 2002. One example is the Newmarket Mills project, which redeveloped an old cotton manufacturing building into a new mixed-use space that contains homes, art studios and retail. Additional benefits from the HTC in New Hampshire includes the creation of more than 1,692 jobs. The Annual Report on the Economic Impact of the Federal Historic Tax Credit for FY 2018, produced by Rutgers University and National Park Service, shows the HTC is responsible for an increase of $56.7 million in New Hampshire’ gross domestic product from fiscal year 2014 to 2018.

PTC and ITC Investment

The American Wind Energy Association and the Solar Energy Industries Association report that, combined, the production tax credit (PTC) and investment tax credit (ITC) in New Hampshire have created enough energy to power more than 55,000 homes. As of 2018, the ITC has created a total of 890 solar jobs and an installed capacity of 85 MW. The PTC has created more than 500 jobs for the people of New Hampshire, and an installed wind capacity of 41,700 MW.

The table below lists some of the positive impacts that these community development tax credits have had on the state of New Hampshire.

LIHTC, NMTC, HTC, PTC, and ITC Use in New Hampshire
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Opportunity Zones

New Hampshire has 27 designated opportunity zones (OZs). Nationwide, there are more than 8,700 OZs. Of the New Hampshire residents who live in OZs, 11 percent are minorities and 16 percent live below the poverty line. Nationally, 57 percent OZ residents are minorities and 28 percent live below the poverty line. Non-metro areas comprise 59 percent of New Hampshire’s OZs, more than double the percentage of the percentage of OZs that are rural nationally (23 percent). The unemployment rate in New Hampshire’s OZs is 27 percent, lower than unemployment rate of nationwide OZs (31 percent). Average median family income (MFI) in New Hampshire’s OZs is $60,700, while the nationwide MFI in OZs is $47,316. Both of these income levels are lower than the New Hampshire statewide median income ($86,949) and the U.S. median income ($70,850).

The graph below compares New Hampshire’s OZs to the nation’s.

New Hampshire Opportunity Zones vs. U.S. Opportunity Zones
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