HB1010

Residential dwellings in or near commercial zones increases economic activity from walkability. NH needs more dwellings for humans and shelter is one of the key factors in stabilizing a person's life, ingraining them into the community, and contributing to the economics of the area. Allowing residential building in commercial zones helps meet the needs of the community. This bill would narrow our options to build a more resilient, stable community in NH.

Dear members of the House Housing Committee, Please accept this testimony on HB 1010 from the Josiah Bartlett Center for Public Policy, New Hampshire's free-market think tank. A major misconception commonly used in defense of banning residences in commercial zones is that the strict separation increases property values. The opposite is true. Commercial real estate professionals have recognized for years that commercial properties close to residential properties tend to be more valuable, not less. Residential properties also tend to command higher prices when located closer to economically active commercial areas. Contrary to popular belief, housing built near an economic activity center is significantly more valuable. (A 2022 study found a 26% price premium for housing built near activity centers in 2/3 of cities studied, and a 50% premium in a few high-growth cities.) As a general rule, mixing residential uses into commercial zones increases the value of both types of properties. These higher values are a result of higher demand. Many people want to live close to shops, restaurants, nightlife and other “third places” where they can build social and economic connections. That's a big reason why homes in Southern NH and on the Seacoast are much more valuable than homes in Coos County. Allowing residential development in commercial zones also increases public safety, which is one of the primary goals of the Zoning Enabling Act. Half a century ago, author Jane Jacobs noticed that crime in U.S. cities seemed to be lower in neighborhoods that enjoyed more activity in public spaces. Her “eyes on the street” theory held that more people on the streets, or watching from shops and homes, deterred crime. This is a widely accepted view, though research is limited. But some researchers have found the theory to hold up under testing. A 2013 study of crime in Los Angeles found that “single-use commercially zoned blocks in Los Angeles have crime rates that are 45 percent higher than similar blocks that include residential uses.” A 2017 study of zoning and crime in Chicago found that commercial areas with higher-density housing were associated with lower crime rates. “Zoning which allows for mixed use structures may be preferable to more restrictive rules that aim for solely residential or commercial use,” the author concluded. Opposition to legalizing housing in commercial zones often comes from the assumption that new residential units will be high density developments aimed at low-income renters, and will therefore reduce property values and increase crime. On the contrary, because this type of housing is in high demand, it is typically not targeted at low-income renters. That doesn’t mean it will raise overall rents. Mid-range and higher-priced rentals attract people who leave lower-priced units, freeing those units for people with smaller budgets. This filtering effect is why the construction of additional housing units, even at the luxury end of the market, brings down overall rents over time. More supply lowers prices. The American Planning Association recommends mixed-use zoning as a way of improving community health and vibrancy. “Mixed-use development provides a variety of environmental, economic, social, and health benefits that can align with existing community priorities, including increasing physical activity,” the association writes. Far from harming communities, mixed-use development brings numerous benefits. Legalizing residential uses in commercial zones is a way to generate those benefits without imposing costs on existing residential neighborhoods. Because housing is being added to commercial areas, not vice versa, there are no concerns about bringing commercial activities into residential neighborhoods. By giving property owners in commercial zones multiple streams of revenue, mixed-use zoning also serves as a hedge against downturns in commercial and office markets. A building zoned exclusively commercial is at a higher risk of becoming completely vacant than one zoned for both commercial and residential uses. Vacant buildings bring down property values, increase crime rates and fracture communities. Mixed-use zones reduce the risk of building vacancies while bringing people closer together. Mixing residential uses into commercial zones also creates more walkable places where businesses and customers mutually benefit from their close proximity to each other. It can reduce traffic congestion, commute times and feelings of isolation. The colonial downtowns that make Portsmouth and Exeter iconic New England towns were once common throughout New Hampshire. Downtown Concord and Manchester also represent attractive, popular mixed-use districts that developed before zoning separated residential and commercial activities. These are the kinds of vibrant community centers that zoning made it difficult to recreate elsewhere. A century after New Hampshire gave local governments the power to separate land by use, it’s clear that municipalities took that authority too far. A power created to keep industrial activities out of residential neighborhoods has been used to keep neighborhoods from popping up in commercial areas. That makes no sense. There simply is no public health or safety justification for creating commercial-only zones. As long as adequate infrastructure exists to support housing, its inclusion in commercial areas harms no one while creating numerous benefits. The benefits of legalizing residential uses in commercial zones include strengthening property values, providing additional housing, increasing economic activity, lowering crime rates, creating a hedge against contractions in the commercial and office markets, and building stronger communities. These are all things elected officials say they want. If they really do, adding residential uses to commercial zones would help.

"HB 1010 endangers vulnerable populations by removing a statewide safeguard against exclusionary zoning without replacing it with equity-based protections. While framed as local empowerment, the bill functionally enables structural housing exclusion, exacerbating inequality, displacement, and trauma exposure. "

New Hampshire needs more access to housing now. We need to expand the tax base as well as enable the next two generations the opportunity to put down roots and care about New Hampshire.

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