Court Street Project Supreme Court Decision
If you would like to read the decision made by the Supreme Court in the recent case regarding the Court Street Project, click here.
About the Project
For more than 60 years, the Portsmouth Housing Authority has been developing and managing quality affordable housing to thousands of Portsmouth families, seniors and people with disabilities. As the largest landlord in the City of Portsmouth we own and manage over 600 units of affordable housing that nearly 1,000 Portsmouth residents call home.
Our housing is a critical part of the public infrastructure in the city. Demand for our housing is stronger than ever, both from residents who want to live with us and from all those who recognize that housing diversity is important to the economic vitality and character of our great city.
While housing diversity and affordability has long been a part of our civic dialogue, the public demand for more workforce housing has never been as pronounced in Portsmouth as it is right now. This demand is one reason why the Portsmouth Housing Authority included in its 2017-2020 Strategic Plan a primary goal to both grow and preserve the number of affordable rental units in the city.
If we fail to address the shortage of affordable housing in this community, Portsmouth runs the real risk of losing the social and economic vitality that we treasure. This vitality is driven, in part, by our valued public service employees, including first responders, teachers, coaches, health care professionals, as well as those who are employed in diverse economy including the hospitality industry and world-class creative economy where artists, craftspeople, musicians, performers, historic preservationists and others.
The need for this project is well-documented. The city’s 2025 Master Plan, the Portsmouth Business Expansion and Retention Report, Portsmouth Listens, and the Mayor’s Housing Committee all identify the need for housing that is affordable to the city’s workforce. If the city fails to address its shortage of affordable housing it risks losing the social and economic vitality it treasures – vitality driven, in part, by those who are employed in its world-class creative economy and our valued public service employees.
In recent years, the City has been struggling with ways to incentivize the development of workforce housing while for-profit developers have almost exclusively been building to meet market demands for rental housing and condominiums that serve the most affluent members of our community. The result is that the far too many members of our vital workforce have been priced out of the market.
PHA’s Court Street Workforce Housing Project is a historic opportunity to meet this urgent need in the heart of downtown Portsmouth. This project will convert land already owned by the PHA and what is now primarily a surface parking lot and redevelop it into 64 one- and two-bedroom units. All of these units will be financially accessible to members of the workforce making at or below 80% of Area Median Income (AMI), and of those, three-quarters of the units will be affordable to residents making under 60% AMI.
As a location, walkable to thousands of jobs in Portsmouth’s downtown is a perfect spot to realize all of the principles of high quality urban design. The neighborhood context, at the heart of what some call a municipal campus, between the Middle School, District Court, the Central Fire Station and the Feaster Apartments was a perfect opportunity to achieve unit density as a function of affordability.
The PHA is also everything city residents have been asking for in a housing developer: local, not for profit, experienced in bringing tax credits and other public financing tools to the table, and an owner of land that we already own free and clear.
This project is the culmination of years of planning, both on the part of the community and the PHA. Funding will come from Low Income Housing Tax Credits, New Hampshire Housing Finance Authority (NHHFA) grants and loans, and an equity investment on the part of the PHA. The State of New Hampshire Community Development Finance Authority (CDFA) tax credits are also an important part of the project’s financing structure
About the Developer
The PHA was established by the City of Portsmouth in 1953 to address its shortage of safe, sanitary, and affordable housing for low income people. The PHA built its first development in 1959 and is today a dynamic organization that has developed and manages over 600 permanently affordable rental apartments housing over 1,000 people in the City of Portsmouth.
The PHA is an independent special-purpose local government entity governed by a six- member Board of Commissioners that are appointed by the Mayor of Portsmouth and serve five-year terms. The Commissioners appoint the Board of PHA Housing Development, Ltd. Both boards share an Executive Director.
The PHA is a developer, adept at utilizing Low Income Housing Tax Credits (LIHTC), public, and private financing to create affordable housing. It also serves as the property manager of its 600 rental units. It operates an area-wide Section 8 Housing Choice Voucher Program, which allocates over 400 vouchers that house another 750 people. The PHA also operates a Resident Services Coordination Program that connects residents to social services, transportation, health care, arts organizations, and recreational opportunities. The PHA works in partnership with the Portsmouth School Department to operate a 21stCentury Learning Center after-school program that currently serves more than 100 children.
The PHA’s $83 million in real estate assets are a critically important piece of the city’s infrastructure and PHA residents are at the heart of the city’s civic and social fabric. The PHA is the largest Public Housing Authority per capita in New Hampshire, housing nearly 4.5% of the population of the city. As the city’s largest landlord, the PHA is a lead participant in the conversation about the need for additional affordable housing. The PHA is a key resource identified by elected and appointed officials, the business community, the thriving arts community, and the general public who have been calling on the city to address the pressing community need for affordable housing.
The Court Street Workforce Housing project will be located at 160 Court Street in the heart of downtown Portsmouth. The PHA owns the adjacent 100 unit Feaster Apartment building at 140 Court Street. The project site also contains land that is exclusively used as surface parking lot. The PHA has a Purchase and Sales agreement on a portion of an adjacent parcel at 152 Court Street which is currently used as approximately 5,000 s.f of office space and which is suffering from deferred maintenance. This portion will be demolished, while a historic antique colonial single family home will be preserved and integrated into the development plan. The 64 one- and two-bedroom units will include underground parking as well as a courtyard and public areas.
The site is at the nexus of the downtown business district and institutions such as the Fire Station, District Court, Middle School, Library, and dozens of local employers and arts venues whose employees are a primary focus of this new housing development.
The Court Street Workforce Housing Project will:
- Develop 64 affordable housing units;
- Support Portsmouth businesses’ ability to attract and retain employees;
- Create value by developing land used exclusively as a surface parking lot;
- Improve the streetscape view by constructing a building that is both attractive and visually connected to the historic district;
- Provide an1,100 sq. ft. +/- community center as part of the This community room will serve as a focal point for social, educational and recreational activities that reinforce the “workforce” theme of the development;
- Develop a pedestrian pathway connecting the historic CBD with the South Mill Pond, and many of the civic and educational resources which are located thereto; and
- Include a thoughtfully designed courtyard to connect the existing public housing structure to the new development, and provide a generously landscaped passive recreation area for residents of both communities.
Housing costs are rising faster than incomes in Portsmouth. This has been true for years. The PHA currently has a waiting list of more than 430 individuals and families (9.1.2018) but the majority of new housing developments in the city have been targeted to upper income people. City, civic, and business leaders are very concerned that this high cost of housing will irreparably damage the city’s valued social and economic vitality.
Current reports and plans siting housing conditions have identified the following:
- More than half of Portsmouth’s population obtains housing by renting and of these renting households, more than 43% are classified as overburdened due to paying over 30% of their income on housing costs, with one-third being classified as severely burdened.
- Rents on average have been consistently higher in Portsmouth than in other parts of the state and Seacoast The costs of both rental and ownership housing are out of balance with wages and household incomes: 44% of renters, 34% of all homeowners, and 28% of homeowners without mortgages pay more than 30 % of their household incomes for housing expenses;
- Based on current income distributions and housing costs, approximately 55% of residents would be unable to affordably purchase a home in Portsmouth; and,
- 39% of Portsmouth residents live alone but small housing units (studio and one bedroom) currently comprise only about 20% of the units in the city.
The major themes of the City’s 2025 Master Plan are: Vibrant, Authentic, Diverse, Connected, and Resilient. The Court Street Project brings together elements of each one of these themes.
Recognizing that housing affordable to its workforce achieves all of the values of the 2025 Master Plan, the plan specifically names PHA as an obvious partner, stating: “The financial and land ownership resources of the Housing Authority should be leveraged for future redevelopment of mixed-income and mixed-use districts adjacent to PHA sites.” The 2025 Master Plan also includes goals that make it more likely that affordable housing will be developed. For example, Goal 3.2 is to “Accommodate the housing needs of low and moderate income residents,” and Goal 3.2.2 is to “Promote the development of mixed-income multifamily housing in appropriate locations with incentive zoning provisions, such as reductions in parking requirements and increased maximum heights.”
The lack of affordable workforce housing clearly impacts the city’s business community. In October 2017 the UNH Cooperative Extension issued its Portsmouth Business Expansion and Retention Program report (attached). It found that business owners value the quality of life offered by Portsmouth – citing the arts, education, culture and historic character. But a primary concern with expansion and retention of employees is the lack of affordable housing in the city.
A letter of support for this project dated March 8, 2018 from Valerie Rochon, President of the Chamber Collaborative of Greater Portsmouth, expresses great urgency about the issue. She wrote: “As of this afternoon, there are 1,069 open positions posted on Indeed.com in Portsmouth, with salaries ranging from $20,000 to more than $50,000.. New affordable workforce housing developments, such as that which has been proposed by the PHA on Court Street, represent a critical investment in the social and economic health of our community.”
Walkable to thousands of jobs in Portsmouth’s downtown, the location of the Court Street Workforce Housing Project is in a perfect spot to realize all of the principles of high quality urban design. The neighborhood context, at the heart of what some call a municipal campus between the Middle School, District Court, the Central Fire Station and the Feaster Apartments, make this a historic opportunity to achieve unit density, which is a function of affordability.
The Court Street Workforce Housing Project will be a vital source of housing that is financially accessible to those in the creative economy, the public sector, the many nonprofits based in the city, and the small businesses that make up the majority of employers in Portsmouth (88% of businesses in the city employ ten or fewer people). [2025 Master Plan, p. 59] This location is also host to a COAST bus stop, providing public transportation to other shopping, schools, businesses, educational opportunities, and services throughout the Seacoast region.
In addition to providing critically-needed workforce housing, the development will add value to the neighborhood. Located between the downtown business district and the more institutional anchors between Court Street and South Mill Pond, the design will extend the historic and visually pleasing streetscape southerly, reconnecting the heart of the business district to its neighbors; neighbors that include the historic Portsmouth Fire Station, Portsmouth District Court, the Portsmouth Middle School, the Portsmouth Library, and the nationally recognized African Burying Ground Memorial. The site is located within steps of hundreds of local employers including the thriving hospitality industry, public service institutions such as City Hall, Police Department, and Fire Department., and arts venues such as the Seacoast Repertory Theater, the Music Hall, 3S Art Space, the Prescott Park Arts Festival, Strawbery Banke Museum and others whose employees are a primary focus of this new housing development.
The PHA and its non-profit affiliate will own the controlling interest in the new development and will serve as its General Partner (GP) and manager. The legal structure will be a yet-to-be-named Limited Partnership (LP). This structure is necessary for the PHA to raise capital, including Low Income Housing Tax Credits. The PHA will enter into a Right of First Refusal to fully acquire the property from the Limited Partnership upon satisfaction of the 15-year LIHTC Compliance Period. Upon liquidation of the Limited Partnership, the PHA, will purchase the property at the IRS Minimum Purchase Price and enter into a 99-year Land Use Restriction Agreement (LURA) to ensure permanent affordability.
In 2016, the Mayor created a new Housing Committee and appointed current and past PHA Board members to the Committee. The goal of this Committee was to study ways the City could incentivize the development of more affordable housing. As part of the development of its 2025 Master Plan, Portsmouth published a housing report in 2014, and the PHA was a part of that process. When the city’s 2025 Master Plan was released in 2017, PHA was cited as a critical partner that can provide both the land and know-how to increase the amount of workforce housing in the city.
PHA was a part of the eight-months of deliberative discussion about housing in Portsmouth facilitated by Portsmouth Listens. Their Housing Report, released in December 2017, found a need for housing affordable to workers in the community, a commitment to economic diversity, and a recognition that zoning that regulates density and building height will have to change in order for more housing to be constructed.
PHA also hosted in a design charrette convened by the Workforce Housing Coalition directed at its Gosling Meadows development. The focus was how to increase affordable and market rate housing and create additional commercial or community uses on the property. This opportunity remains under study by the PHA as a means to advance its 2017-2020 Strategic Plan major goal to grow Portsmouth’s supply of affordable housing.
The PHA’s Executive Director Craig Welch presented about the project to the Economic Development Commission, Chamber of Commerce, the Portsmouth Herald Editorial Board, Portsmouth Listens Study Circles, the Workforce Housing Coalition of the Greater Seacoast, social service agencies, public information sessions, eleven separate public hearings and to the residents of the adjacent Feaster Apartments.
Portsmouth Listens’ 2017 Report on Housing includes this from the business member participants: “Housing is a very serious problem for small business owners and their employees. The problem is availability and affordability. Small businesses do not have enough revenue to pay substantially higher wages necessary for them or their employees to afford to live here (rent or own). If one cannot live in Portsmouth, then they must spend time and money getting here every day. As a result, there is a high turnover of employees who will take slightly lesser paying jobs if they can live where they work.”
The Court Street Workforce Housing Project is located within steps of thousands of downtown jobs and would meet the need of these area businesses concerned about housing for their workforce.
The City’s 2014 Report on Housing noted that while Portsmouth’s population growth overall is just 2%, the two age groups growing in population are young adults ages 20-34 and seniors aged 65+. Smaller apartments close to downtown will benefit both.
Portsmouth businesses cite the lack of affordable housing as a key deterrent to business expansion and retention of employees. They note that younger employees, many that are young adults just entering the job market, seek downtown living with walkable commutes. This population is an ideal match for the retail and dining establishments that fill downtown.
The location is home to a COAST bus stop, making accessible by public transportation Great Bay Community College, located 3 miles from downtown, and UNH, located 10 miles from downtown.
PHA and PHA Housing Development Ltd. will serve as project developers. Craig Welch is Executive Director of both organizations, bringing 20 years of private and nonprofit development and financial management to the task. Valerie Labrie is the PHA Director of Finance, responsible for the fiscal operations of this $11 million agency with $83 million in assets. Valerie manages the complex budgeting and reporting for the PHA’s multiple programs. To support development of the project, PHA has contracted with the following:
CJ Architects, as lead design professional. Led by Carla Goodknight, CJ Architects is a Portsmouth based design firm specializing in high quality urban infill developments, including Parkside Place and 233 Vaughn Street in downtown Portsmouth.
Development Synergies LLC as development consultant. Peter Roche (President) has served as founding director of two of NH’s largest and most successful non-profit affordable housing firms and has facilitated the development/preservation of more than 5,000 units of multifamily housing across the northeastern and Midwestern US.
Bosen & Associates, local permitting and PHA counsel. Highly regarded Portsmouth attorney John A. Bosen is both a highly skilled real estate lawyer and a civic leader with deep ties to the Portsmouth community.
Sheehan Phinney, lead transactional counsel. Kenneth Viscarello is one of NH’s most experienced and creative attorneys with a high degree of technical specialization in the field of affordable housing, construction law, and tax credit syndication.
Ambit Engineering, civil engineer. Led by John Chagnon P.E., Portsmouth based Ambit Engineering will provide state of the art civil engineering and permitting services.
Eckman Construction, construction manager. Eckman has over 40 years of construction management experience including developing over 1,500 units of multi-family housing, including many projects financed with Low Income Housing Tax Credits.
PHA will serve as Property Manager for 160 Court Street, bringing its 60 years of property management to the task.
For questions about the Court Street Workforce Housing Project or the PHA, contact Executive Director Craig Welch at firstname.lastname@example.org or 603-436-4310 x118. More information can also be found on our website at www.porthousing.org.