Apartments in high demand in NashuaBy KIMBERLY HOUGHTON
Sunday News Correspondent
October 22. 2017 12:25AM
NASHUA - Despite hundreds of new apartments that have been built in the Gate City in recent years, Nashua's vacancy rate for rental units is less than 1 percent.
With the city's median rent around $1,359 a month, George Reagan of the New Hampshire Housing Finance Authority told city officials that higher rents could be creating a challenge in Nashua: Low vacancy rates are driving up the cost of apartments.
"That kind of puts us into this economic dilemma," Reagan told an aldermanic committee last week.
"For us, we have seen the affordability of housing as very instrumental in economic development," said Reagan. There needs to be a balance between adequate housing supplies and economic development, Reagan said, explaining workforce housing can help support economic vitality in communities.
There is significant competition for rental units in Nashua, according to Reagan, who said the average two-bedroom unit with all utilities included is about $1,560 a month.
The statewide vacancy rate for rental units is about 1.4 to 1.7 percent.
He explained that a single occupant with a median income of about $40,000 should be able to afford a monthly rent of slightly more than $1,000, while a family median income of about $81,000 could likely afford a $270,000 home.
"The basic constraint on housing in Nashua is land cost," said Brian McCarthy, chairman of the Board of Aldermen.
McCarthy said about $100 million has been spent to build rental properties throughout the past five years in Nashua.
There are many new apartments off the F.E. Everett Turnpike's Exit 1, and 152 apartments are under construction for the first phase of Renaissance Downtown's Residents at Riverside Landing, said McCarthy. In addition, Brady Sullivan Properties is planning to renovate an old mill building on Franklin Street into 150 or 200 new apartments. All of those units will be renting for about $1,500 to $2,000 a month, he said.
"There is enough demand there to fill all of that," said McCarthy, adding there is demand for mid-range apartment units, but it's difficult for developers to build them. "From what I understand about it, it is difficult at market-rate financing to build something that is less than high-end rental."
Reagan said some top-of-the-market apartment units in Nashua are renting for $2,000 or $3,000 a month. He is hearing that employers are trying to recruit and retain their workers, but their incomes may not be able to afford the city's $1,300 a month median.
"I feel the market could take care of itself," said Alderman Dan Moriarty. He said that even as higher-end housing is constructed, it will reduce pressure on more moderate housing.
It is understandable that developers making huge investments in their projects will want to maximize their profit, Moriarty said.