1. Housing New Hampshire’s Workforce Prepared for the New Hampshire Workforce Housing Council www.workforcehousingnh.com Presentation to Business & Industry Association of New Hampshire’s “Workforce Housing Crunch” Conference Manchester, New Hampshire March 29, 2005 Prepared by Dr. Lisa K. Shapiro, Chief Economist Gallagher, Callahan & Gartrell, P.A. Augusta Boston Concord 800-528-1181 shapiro@gcglaw.com gcglaw.com

2. 2 Overview of Presentation  The Data Key Trends in Housing in New Hampshire  1990 – 1996  1996 – 2001  2001 – 2005  The Literature Market Forces Non-market Forces  The Estimated Economic Impacts to New Hampshire Employment Income Gross State Product Sales Tax Revenues

3. gcglaw.com3 Vacancy Rates and Rental Costs Gross Rental Costs Statewide Vacancy Rate Source: New Hampshire Housing Finance Authority Annual Rental Surveys.

4. gcglaw.com4 New Hampshire Residential Building Permits 1990 - 2004

5. gcglaw.com5 Home Sale Prices vs. Household Income

6. gcglaw.com6 Changes in Assessment 2000 - 2005

7. gcglaw.com7 Affordability of Workforce Housing Sources and Notes: New Hampshire Economic and Labor Market Information Bureau, New Hampshire Occupational Employment and Wages, January 2005, based on the November 2003 survey by the Occupational Employment Statistics (OES) Program. Assessment Divisions of selected communities. Years for previous and current assessments differ across the communities, but all are between 2000 and 2005. Dotted lines represent the affordable home value for a household with one income earning the statewide average salary for that occupation. Affordability calculated here as three times annual income - actual affordability depends on specific income, interest rates, property taxes, debt ratios, household wealth, and etc

8. gcglaw.com8 Aggregate Housing Demand vs. Housing Supply Forecasted Annual Statewide

9. gcglaw.com9 Aggregate Housing Demand vs. Housing Supply Forecasted Annual by County

10. gcglaw.com10 Purchase Price, Family Income, and Interest Rates 1988 - 2004

11. gcglaw.com11 New Hampshire Employer Opinion Polls 2002 and 2005

12. gcglaw.com12 New Hampshire Employer Opinion Polls 2002 and 2005

13. gcglaw.com13 Non-Market Factors  Examples of Regulatory Policies and Practices which Impact Housing Supply Minimum Lot Size Building Permit Limitations Growth Management Ordinances Impact Fees Infrastructure Upgrades

14. gcglaw.com14 Estimating Aggregate Economic Impacts  2 Models (REMI, RIMS II)  3 Approaches (Housing Expenditures, Housing Prices, Construction)  Sensitivity Analysis

15. gcglaw.com15 Results Estimated Annual Increases in Key Economic Indicators (Millions of 2004 Dollars)

16. gcglaw.com16 Average Employment Growth in New Hampshire 2001 - 2004