PHA Housing Development Ltd. Releases 2022 Housing Market Study

PORTSMOUTH – PHA Housing Development LTD., a non-profit development corporation affiliated with the Portsmouth Housing Authority, has published a Housing Market Study specific to the City of Portsmouth. The aim of this study was to evaluate housing demand, prospective housing market opportunities, and to help guide the PHA in determining priorities and strategies for future affordable and workforce housing development in the city. The study includes an assessment of existing conditions, current and projected demographic and household characteristics, and consumer preferences.

The Market Study was performed by RKG Associates, a Boston based economic planning and real estate consultancy, and informed by a variety of data sources, including nearly 600 people who responded to our Community Survey. While the PHA recognizes that Portsmouth is part of a larger regional housing market, they chose to focus this study exclusively on the city, because the Rockingham County Development Corporation is completing a broader study of this regional market.

“After receiving over 500 applications for the 64 new workforce housing units at Ruth Lewin Griffin Place, we know already that the demand for affordable housing in the city is strong, but this assessment highlights key areas that deserve our focus, and also deserve the attention of Portsmouth residents and businesses.”

Adam Ruedig, Board President of PHA Housing
Development.

Some of these key takeaways of the Market study include:

• More workforce housing, including family-sized units, are needed in Portsmouth.
• Renters in Portsmouth are increasingly cost burdened. Cost burdened is defined as households paying more than 30% of their income. Nearly 40% of Portsmouth renters are cost burdened and 15% of renters are extremely so, paying more than 50% of their income on rent. For Portsmouth workers living outside of the city, cost burdening is also increasing due to the high cost of commuting into the city.
• Most owned housing units in Portsmouth were constructed before 1960, meaning they may not be equipped with accessibility features older adults are looking for today.
• One in every three respondents to the Community Survey indicated their current residence does not meet their needs, half of whom cited high costs as a primary concern.
• Of those surveyed who used to live in Portsmouth but no longer do, 1/3 would like to move back to Portsmouth if they could find housing that met their needs.
• While a significant amount of rental housing has been built in recent years, the increase in housing supply has not offset the sharp rent increases in the city because demand continues to outpace supply. One conclusion this supports is that the City should incentivize developers who agree to cap the rents, most notably, local non-profit housing developers.
• According to the housing survey, many respondents indicated that limited public transit and biking options create challenges for existing residents and workers commuting into the city.

“The fact that over 600 people responded to our community survey is a testament to the people of Portsmouth and the strong interest in everyone wanting to help solve our housing affordability challenges here. There is a lot to consider here, but some key priorities stand out.”

Tom Ferrini, The Board Chair of the Portsmouth Housing
Authority.

Some of these key priorities that Portsmouth Housing is considering are:

• Respond to the significant demand for workforce housing units for people making under 80% of the Area Median Income. According to the Market Study, 52% of the new housing unit demand projected by 2030 will come from households earning at or below 80% of AMI, and the majority of people surveyed who indicated there is a very strong need for workforce housing, low-income housing, and housing for people experiencing homelessness. The majority of those surveyed also indicated a strong need for housing that is affordable to those employed in retail, hospitality, food service, the creative economy, and municipal employees and first responders.
• Respond to the trend that Portsmouth household size is increasing, by building some larger, three-bedroom units, a segment of the market that has been underdeveloped by most private housing developers.
• Respond to the overall increase in older adults in Portsmouth, and to the Community Survey which had a large number stating their current home does not meet their accessibility needs but they don’t want to leave the city to find suitable housing.
• Respond to the data that shows that between 2020 and 2030, Portsmouth could see 489 affordable units lose federal subsidies and associated rental rate restrictions, putting these units at risk of moving to higher market rights. Preserving these units should be a priority for Portsmouth.

In reviewing the study, Portsmouth Mayor Deaglan McEachern stated:

“It’s crystal clear that we have significant affordable housing challenges in the city, and we look forward to working with the PHA to so that more of our residents aren’t forced to spend such a huge part of their income on housing. The fact that one-third of the people who have moved out of Portsmouth because of high housing costs would move back to Portsmouth if they could afford something, means that we’ve lost a valuable part of our community because we have underbuilt affordable housing.”

Portsmouth Mayor Deaglan McEachern

Link to Full Case Study: https://pha.mintleafmarketing.com/assets/73f71e40-66f1-47ad-8e2e-dee0b0f05907-pdf/Portsmouth%20Market%20Analysis%20FINAL%2009.09.2022.pdf