MANCHESTER, NH – When the 90-unit residential building at 409 Elm St. began leasing apartments in April, it was the end of a six-year journey for developers Red Oak.
But for downtown Manchester, the 90-unit renovation is another piece in the beginning of a bigger picture – the completion of one of many developments, big and small, that represent more than 2,000 units planned for the city’s center in the next couple of years.
The state is short 23,670 residential units right now and will need 90,000 by 2040, according to NH Housing’s May housing needs report. Given that news, 2,000 may not seem like much.
“What Manchester is doing is just a drop in the bucket,” Jodie Nazaka, the city’s economic development director, said in a recent interview with Manchester Ink Link.
But with enough drops, the bucket begins to fill up, and city officials say that Manchester is doing everything it can to make that happen.
The city’s proactive strategy to adding residential space downtown, including much-needed affordable housing, has exponential benefits. Nazaka pointed to the Residences at Manchester Place, which opened in 2004 at the corner of Bridge and Elm streets with 200 market-rate apartments. It’s had a 95% occupancy rate, or higher, since then. At the time, there were few places to live downtown.
“Manchester was an 8 to 5 city,” she said.
Once people started living downtown, though, more restaurants, businesses and retail followed. The more those follow, the more residential units are added.
“This city has done a lot to create economic opportunities,” she said. “People want to live here.”
That will be especially true once the plan to create a biofabrication hub in the Millyard begins to gain traction. The project, which was supported by a $44 million federal grant in November, is expected to create 7,000 jobs. That means more housing will be needed.
“We’re doing everything we can to create more housing in the city of Manchester,” Nazaka said.
New zoning targets housing
Industry experts ranging from NH Housing to the New Hampshire Association of Realtors have recommended updating the local zoning ordinances across the state to make it easier to build multi-family housing and increase density.
Manchester began updating its ordinance last year, with one of the goals to help ease the housing crisis. The update is expected to be completed later this year.
The city’s zoning ordinance was established in 1927, with major rewrites in 1965 and 2001. The city last year started an update with an eye toward expanding housing density as well as easing the concerns of developers who are wary of introducing projects that may not be approved because of zoning restrictions.
Zoning ordinances are a reflection of the time they were written, Senior City Planner Jeff Belanger said. The city’s new master plan, adopted in 2021, reflects the fact that people are more interested in urban living and being near amenities, businesses and community than they were in the 1960s, Belanger said in a video conversation with Ward 2 Alderman Will Stewart.
The housing crisis came up a lot during the two-year master plan process, Belanger said. “We’ve kind of led the way for providing housing in this state. We’ve always provided for more density, and we are, still. We’re permitting housing like crazy around here,” he said. “There’s a lot of new housing being built, but still, demand is exceeding supply.”
He said there are a lot of reasons that there isn’t enough housing in the city, and zoning is just one of them. “But I would guess this new zoning ordinance is going to do what it can to help increase housing construction.”
The new ordinance can lead to more housing construction by allowing more flexibility in where it can be built, and what kinds of housing can be built where. That includes more types of housing in more commercial areas, he said.
“A little of that goes back to the early days of zoning,” Belanger said. “There were these rigid ideas: here’s the residential, here’s the commercial, here’s the industrial, and they can’t mix. As time has gone on, people have realized there are downsides to that kind of rigid zoning.”
The master plan recommends that more housing be allowed in more types of places, but also that more commercial uses that are compatible with it be allowed in more types of places. One example, he said, is the corner store, which, when done right, can be an important part of a neighborhood.
“We’ve lost some of that” with zoning changes over the decades, and neighborhoods have suffered for it, he said.
Changes to how people see downtown residential space in recent years is good for cities, said Jeff Levine, who teaches urban studies and planning at the Massachusetts Institute of Technology. Levine was director of planning and urban development for Portland, Maine, and other New England cities, and has studied how cities the size of Manchester have evolved over the past couple of decades.
“We’re rethinking about using our space in ways that make it as vibrant as possible,” he said of post-pandemic downtowns. He said the “jarring changes” from the pandemic have spurred cities to rethink how space is used. Less office space as people work remotely means more room for people to live, for instance. The more people who live downtown, the more they’re walking instead of using traffic lanes and public parking.
“It’s not about how to get through downtown, but how to stay downtown,” he said.
With the workplace changes spurred by the pandemic, “Less office space means more space for housing.” And more housing downtown means more people there, who are building a community, consuming goods and bringing energy.
Connecting the city
The city’s new projects are a mix of redeveloping buildings, tearing down ones that are in bad shape and underused to make room for new ones, and filling in empty space. Some of the projects, particularly those by Brady Sullivan, are to fill empty office and commercial space.
City officials are looking not only to building community and bolstering the city’s economy, but to also better connect the city and its residents, blurring the boundaries of “downtown.”
Residential projects in the heavily industrial area at the south end of Elm Street, or on the West Side, are within walking distance of the city’s business and entertainment core. The $30 million RAISE project will connect the south end of Elm Street and its industrial area along the river to downtown, opening it up for housing and other development. The project is funded by a $25 million U.S. Department of Transportation grant and $5 million in local matching money.
The project will improve pedestrian and bicycle access, connect neighborhoods long cut off by road development, as well as the framework, though not the money, for a downtown pedestrian bridge over the Merrimack to the West Side. The completion of the RAISE project will lay the groundwork for the city’s ambitious Manchester Transit Oriented Development plan.
The MTOD plan, if completed, could generate up to $588 million worth of development through new construction and building renovations for office, retail and residential space, city officials have said. A transit-oriented development plan focuses on compact pedestrian-friendly, mixed-use communities that are connected to transportation options (highways, commuter rail, and the like).
The July 6 planning board agenda is a snapshot of the range of housing projects both downtown and in the area that the RAISE project is opening up, as well as other parts of the city.
Brady Sullivan, which plans a 160-unit new-build apartment building on 4.5 acres owned by Velcro USA on the banks of the Merrimack is seeking a six-month extension as it prepares to begin the construction phase.
The Edge apartments will be in a 208,250-square-foot, six-story building and have 120 two-bedroom, two-bath apartments; 20 three-bedroom, two-bath units; 15 two-bedroom, one-bath units; and five one-bedroom, one-bath units.
Developer Arthur Sullivan said in 2020, when the plans first went before the board, that “they’re for the upper end of the market.”
The application said that there’s strong demand for upscale new market-rate housing in the city. “The city has a plethora of older multi-family units…there are a limited number of new apartments, with easy access to downtown, available to people looking to make a home in Manchester.”
At the time, that was true. But once it’s completed, The Edge will be one of several choices for market rate and upscale apartments in the pipeline that will be available to renters who can afford them.
At the other end of the spectrum, Commonwealth Collective is renovating 55-57 Manchester St., which has eight apartments and retail on the ground floor. The plan will add 13 affordable living units, including five where the retail was, and renovate the upper floor to accommodate more.
The developers are looking for a site plan waiver from the board tonight, since there are no changes to the building footprint.
The renovation of the former Main Street Mission is funded partially with a $250,000 InvestNH grant. Tenants will be limited to those who make 80% of area median income, which is $67,700 for a household of two in 2023. [The number, set by the U.S. Department of Housing and Urban Development, changes yearly with cost of living and other factors.]
“At a time when our city is suffering from a lack of inventory for affordable rental housing, this will relieve some of the pressure on those vulnerable residents of our city needing this much-wanted affordable housing option,” Amy Chhom, of The Chhom Group, representing the developer, said in a letter to the board requesting the waiver.
A mix is ‘good for downtown’
Both affordable and upper-scale housing is needed if the housing crisis is going to ease.
Having a mix also makes for a better downtown, Levine said. “In every community, you want a mix of housing levels,” he said. “Both are good for downtown.”
Nazaka said that changes in federal housing policy over the past couple of decades have made it harder for developers to build low-income housing. “It’s hard to get that mix,” she said.
“It’s not necessarily that developers don’t want to do affordable, but financially they just can’t,” she said. “It’s just the cost of doing business.”
One major change has been developers accessing Low Income Housing Tax Credit, which HUD calls the most important resource for creating affordable housing in the nation. The credit is given to developers who meet certain requirements for acquiring, developing, rehabilitating or building rental housing targeted to lower-income households.
Housing built with the tax credits is set aside for households with incomes at or below 60% of the area median income, and rent amounts are capped. Those restrictions usually are required for 15 years.
Use of the credits peaked in the 1980s and 1990s, but has plummeted since then. The Center on Budget and Policy Priorities found that many state and local governments are overly restrictive to developers who apply for the credits. Since more developers apply for credits than each state has available, selectivity over choosing which ones get funded can hurt areas that need the housing.
Rising construction costs that began with the pandemic having helped.
In Manchester, affordable housing is usually built now by companies that specialize in it, Nazaka said.
She said the InvestNH program has helped, citing the 55-57 Manchester St. project as an example.
The one-time program made $60 million in grants available to developers of housing with at least three units who will rent to long-term low-income tenants. Municipalities could apply for $40 million in grants.
Another downtown project that received a grant was Signature on Elm, at 1225 Elm St., in the Raxx Billiards-Lemay Jewelers building. Developer estTeam LLC got $3 million for its 35-apartment project at 1225 Elm St. The project includes 35 units, 15 of them affordable.
Downtown housing in the pipeline
There are dozens of housing projects proposed or underway for downtown or its fringes. These are some of the major ones:
Orange and Pearl streets: Developer Lansing Melbourne Group plans 366 apartments – a 314-apartment seven-story building on Pearl Street and a 52-unit six-story affordable housing complex along Orange Street that will be owned by NeighborWorks New Hampshire. The planning board approved a site plan and conditional use permits for the parking on April 20. Each building will have a parking garage that together will accommodate 540 cars.
75 Canal St. Developer Jones Street Investment Partners plans 250 one-, two- and three-bedroom market-rate apartments and 2,000 square feet of commercial space, with a parking garage underneath. The 92,000-square-foot building will be constructed on the site of a former brick commercial building, which was not in condition to be redeveloped, according to the owner and the city. The complex is expected to be completed by next summer. It will take up the block bordered by Canal, West Auburn and Depot streets, just south of Granite Street.
Chestnut and Merrimack streets: Lincoln Capital Acquisitions, a California firm that specializes in building affordable housing, plans 192 units on the site of the city’s former police station, at 351 Chestnut St., and across the street at 80 Merrimack St. The development was approved in June 2022, and the addition of the Merrimack Street portion was approved last fall. The developer is before the planning board tonight asking for an extension on the Chestnut Street plan to accommodate closing on the property.
1230 Elm St.: Brady Sullivan got a variance in January to develop 100 residential units in office space that is now going empty.
1000 Elm St.: Brady Sullivan plans 155 apartments on eight floors of the iconic Hampshire Plaza building, the city’s tallest. The plan is to convert more vacant office space into six three-bedroom, 147 two-bedroom and two one-bedroom apartments. The average size will be 1,000 square feet.
Some major non-downtown housing plans are:
Radburn Street and Smyth Road: Torrington Properties plans 305 apartments in three buildings in the northeast end of the city. Torrington was given conditional approval by the planning board in June 2022, but has been slowed by property acquisition issues and rising costs. The developer was given a one-year extension in January. The plan is for 15 studio apartments, 83 one-bedroom units, 182 two-bedroom and 24 three-bedroom units, according to the application. The developer got a break on the school impact fee in January, and as a condition must include 10 two-bedroom apartments at below-market rents for 20 years.
1824 Front St.: Developer Socha Companies is before the planning board tonight asking to add four townhouses to the plan for 60. The Saddle Rock development is in the north end of the West Side.
