Upper Valley housing projects in the pipeline amid supply shortage

Twin Pines Housing Executive Director Andrew Winter, left, and DEW Construction Superintendent John Krezinski look out the window of an apartment in the Riverwalk Apartments development in White River Junction, Vt., on Friday, Nov. 10, 2023. The affordable housing development will have 42 units, including studios and one-, two- and three-bedroom apartments. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Twin Pines Housing Executive Director Andrew Winter, left, and DEW Construction Superintendent John Krezinski look out the window of an apartment in the Riverwalk Apartments development in White River Junction, Vt., on Friday, Nov. 10, 2023. The affordable housing development will have 42 units, including studios and one-, two- and three-bedroom apartments. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News / Report For America photographs — Alex Driehaus

Riverwalk Apartments sits at the intersection of Prospect and Maple streets in White River Junction, Vt., on Friday, Nov. 10, 2023. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Riverwalk Apartments sits at the intersection of Prospect and Maple streets in White River Junction, Vt., on Friday, Nov. 10, 2023. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Alex Driehaus

Jon Wheeler, an electrician with Norway & Sons, stands on a lean-safe ladder while mounting electrical equipment at Riverwalk Apartments in White River Junction, Vt., on Friday, Nov. 10, 2023. Construction on the development is expected to be completed in early April 2024. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Jon Wheeler, an electrician with Norway & Sons, stands on a lean-safe ladder while mounting electrical equipment at Riverwalk Apartments in White River Junction, Vt., on Friday, Nov. 10, 2023. Construction on the development is expected to be completed in early April 2024. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Community manager Emily Robertson walks through the lobby of The Marek South in Lebanon, N.H., on Tuesday, Nov. 14, 2023. The 250-unit development is set to be completed in two phases, with Building A and community amenities opening on December 15 and Building B opening in April 2024. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Community manager Emily Robertson walks through the lobby of The Marek South in Lebanon, N.H., on Tuesday, Nov. 14, 2023. The 250-unit development is set to be completed in two phases, with Building A and community amenities opening on December 15 and Building B opening in April 2024. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

A 20-person hot tub is one of many amenities offered at The Marek South in Lebanon, N.H., on Tuesday, Nov. 14, 2023. The development will also offer a gym, parking garage, dog park and walking trails along with several community gathering spaces. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

A 20-person hot tub is one of many amenities offered at The Marek South in Lebanon, N.H., on Tuesday, Nov. 14, 2023. The development will also offer a gym, parking garage, dog park and walking trails along with several community gathering spaces. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Crews work on indoor finishes at The Marek South in Lebanon, N.H., on Tuesday, Nov. 14, 2023. The development offers one-bedroom apartments starting at $2,580 monthly and “one-bedroom jr.” apartments, which are modified studios with partial walls separating the bedroom area, starting at $2,230 monthly. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Crews work on indoor finishes at The Marek South in Lebanon, N.H., on Tuesday, Nov. 14, 2023. The development offers one-bedroom apartments starting at $2,580 monthly and “one-bedroom jr.” apartments, which are modified studios with partial walls separating the bedroom area, starting at $2,230 monthly. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News / Report For America — Alex Driehaus

A construction crew assembles modular units manufactured by Ritz-Craft Corporation in Pennsylvania into a 42-unit workforce housing apartment building on Spring Street in Newport, N.H., on Thursday, June 15, 2023. Jack Franks, President and CEO of Avanru Development Group, filed a lawsuit in Superior Court against the town because of water and sewer connection fees, which he says are excessive and were not disclosed before the development began. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

A construction crew assembles modular units manufactured by Ritz-Craft Corporation in Pennsylvania into a 42-unit workforce housing apartment building on Spring Street in Newport, N.H., on Thursday, June 15, 2023. Jack Franks, President and CEO of Avanru Development Group, filed a lawsuit in Superior Court against the town because of water and sewer connection fees, which he says are excessive and were not disclosed before the development began. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News / Report For America photographs — Alex Driehaus

Jack Franks, President and CEO of Avanru Development Group, looks at the cabinetry in a newly-installed modular apartment on Spring Street in Newport, N.H., on Thursday, June 15, 2023. The apartments arrive from the manufacturing facility mostly complete and need finishing touches like flooring and additional appliances. Franks said he expects the building to be complete by October. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Jack Franks, President and CEO of Avanru Development Group, looks at the cabinetry in a newly-installed modular apartment on Spring Street in Newport, N.H., on Thursday, June 15, 2023. The apartments arrive from the manufacturing facility mostly complete and need finishing touches like flooring and additional appliances. Franks said he expects the building to be complete by October. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Alex Driehaus

By PATRICK ADRIAN

Valley News Staff Writer

Published: 11-19-2023 7:21 AM

LEBANON — If you attend any public discussion in the Upper Valley about the regional housing crisis, expect at least one participant to mention the number “10,000.”

According to Keys to the Valley, an oft-cited housing study of the Upper Valley by three regional planning commissions, 10,000 is the estimated number of new homes that will be needed by 2030 to meet demand for shelter in the Upper Valley.

Because of the magnitude of the need — which is nearly three times the number of homes built in the Upper Valley between 2011 and 2020 — the permitting and construction of commercial apartment projects and which tenants those apartments are marketed to has become a topic of widespread interest.

Though regional and municipal planners stress the need for a diversity of housing sizes, types and price ranges, commercial apartment projects are able to produce a sizable quantity of housing units within two or three years of obtaining a building permit.

But high interest rates, along with the surging costs of construction materials and labor, are driving many developers to put their construction plans on hold despite demand.

“Costs have gone up 40% and interest rates have doubled,” said developer Jon Livadas, who is seeking to construct a 183-unit apartment complex at a former industrial laundry facility on Mechanic Street.

Livadas also is converting the former Ruger Mill building in Newport into 70 apartments, the majority of which will be rented to people who earn between 30% and 64% of the median area income. Construction of that project will begin next year.

The increases in construction costs and interest rates have caused some projects to no longer be economically viable, driving developers to put construction on hold or to reevaluate their plans.

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The economic conditions can also make it more difficult to find investors, which can also contribute to construction delays, Livadas said in a phone interview.

Lebanon

New apartments opening next month or next year include locations in Lebanon, White River Junction and Newport. Some rents will be market-rate, though several new apartment buildings have rents that are affordable to people with median to low incomes.

As of last month, five multi-family housing projects in Lebanon of 20 or more units have approved site plans but have not started construction.

The Woolen Mill project — Livadas’ 183-unit complex on Mechanic Street — will consist of three apartment buildings, two of which will be new construction, a two-story parking garage, a landscaped pedestrian plaza and a riverwalk along the Mascoma River, which Livadas said will be accessible to the public.

The original plan, approved last year by the Planning Board, included four apartment buildings with 196 total units. But the developers recently revised their plan by removing one of the new buildings.

That decision was mainly driven by costs, Livadas said. Construction cost increases made that building too expensive.

“People often assume that just because you’re a developer that you are making money (on every project),” he said. “But most developers are trying not to lose money.”

The parking count will remain at 213 spaces, so reducing the number of units also will increase the parking ratio for tenants, Livadas added.

The Planning Board will continue a public hearing on Dec. 11 to consider the proposed revision.

Due to the economic uncertainty in the real estate market, Livadas said he does not know when the first phase of construction will begin.

Another project, a 152-unit apartment complex across from Colburn Park, was permitted by the Lebanon Planning Board in July 2022. But construction of that project is currently stalled, according to an email last month from Tim Sidore, of Execusuite, the development firm.

Questions were emailed to Sidore, but a response was not received in time for publication. Phone and email messages to Mike Davidson, of Execusuite, seeking comment were not returned.

Jolin Salazar-Kish, a real estate developer in Hanover, was approved in 2021 for a three-building project on Bank Street in Lebanon with 26 total apartments, including 18 new units and six existing apartments on the property.

But that project is no longer economically viable, Salazar-Kish said on Wednesday.

In addition to the high interest rates and construction costs, Salazar-Kish said she had to significantly reduce the number of apartments to get the project approved by the city Planning Board.

Salazar-Kish said interest rates were only around 3% when the project was approved. Commercial mortgage interest rates in New Hampshire are currently 6%.

“There are so many startup costs (to developing a project),” Salazar-Kish explained. “If you don’t have enough units to spread that cost around, it won’t be viable.”

Other permitted multi-family projects in Lebanon include Marek North, a 204-unit apartment building on Mount Support Road, and the fourth phase of the Quail Hollow Senior Living Community, which will create 32 additional apartments for people ages 55 and older.

Marek North, which will include an even mix of one- and two-bedroom apartments, is currently scheduled to begin construction next spring.

Developers of the Quail Hollow project received an extension on their site plan at a Planning Board meeting on Sept. 25. The project was initially approved in 2019 but the developer suspended construction of phase four due to the novel coronavirus pandemic, according to the meeting minutes.

Hartford

Rental options in White River Junction will include two affordable housing projects that are opening in 2024.

Twin Pines Housing Trust, a housing nonprofit, is opening two apartment buildings in White River Junction, totaling 100 apartments.

One building, Riverwalk Apartments, is located at the corner of Maple and Prospect streets, across from the Listen Center, just over the bridge from West Lebanon.

Riverwalk contains 42 residential units, including 10 studio, eight one-bedroom, 20 two-bedroom and four three-bedroom apartments.

Andrew Winter, executive director of Twin Pines, said this is the organization’s first project offering three-bedroom apartments.

“The housing market, by and large, isn’t producing a lot of three-bedroom rental units, so we’re trying to respond to that,” Winter said in a phone interview. “It’s been a few years since we have offered them, and we know there are larger families that need those units,”

Riverwalk will be affordable to a range of annual incomes — applicants with incomes from around $30,000 to $90,000 would be eligible to rent, depending on the number of people living in a unit.

Eight of the Riverwalk units will be designated for households experiencing or at risk of homelessness.

The second project, Mountainvale Apartments, is a former Fairfield Inn and Suites on Ballardvale Drive that Twin Pines is converting into a multi-family apartment building. By combining adjacent hotel rooms, the project will turn the 67 hotel rooms into 40 residential units — 31 one-bedroom apartments and nine studio apartments.

Four of the units will be subsidized with housing vouchers through the VA Supportive Housing program, or VASH — a federally funded program that provides housing assistance, case management and transitional services to homeless veterans.

Rents for Mountainvale Apartments will be affordable to individuals or families whose incomes are 60% or less of the area median. In Windsor County, that would be under roughly $60,000.

Twin Pines is still accepting applications for both buildings, according to Winter. Both buildings are expected to be open for occupancy between late March and early April.

Winter explained that affordable or workforce housing, which is financed differently from market-rate apartment projects, have been less affected by issues such as interest rates.

“Market-rate developers have to borrow a lot of money (and) carry a larger mortgage,” Winter said. “So when interest rates are higher, they are having to balance what they can charge for rent against how much rent they can carry. And if that debt is more expensive, it sometimes means they have to put more equity into a deal to make it pencil out (or else) put the project on the shelf and wait for interest rates to come down.”

Affordable housing projects are largely funded through housing tax credits, a federal program that awards tax credits to housing developers who provide rent-restricted units for lower-income households.

“We’re using tax credit equity that we’re able to raise from the sale of those tax credits to replace what otherwise would be debt,” Winter explained. “So our cost of capital is typically not as impacted as interest rates might be for a for-profit developer.”

In another project, developers are looking to construct a five-building apartment complex with over 200 total units on Sykes Mountain Avenue.

Simpson Development Co. of White River Junction, is partnering with the Pering Group, a Venezuelan-based firm, to develop a 25-acre parcel between Hickory Ridge and Lily Pond roads.

The developers plan to construct a four building complex with 192 units, including 36 studio, 133 one-bedroom and 23 two-bedroom units. These apartments will be rented at market rate.

A fifth building containing 48 affordable apartments will be built on a smaller, adjacent lot of four acres. The income qualifications for these units have not been determined.

The Planning Commission will hold a public hearing on Dec. 4 to consider this project.

Hanover

The Hanover Selectboard is still developing a plan with Twin Pines to develop as many as 29 housing units on five acres of land in Mink Brook Community Forest. These homes will be affordable for people earning up to 120% of the area median income. In Grafton County, the median income for a family of four is $115,000.

This project is still in its early stages of development. Town voters approved in 2020 a warrant article provision that four acres would be transferred to Twin Pines “for future development of a small cluster of cottage homes for workforce housing.”

The Selectboard is still negotiating an options agreement with Twin Pines for the nonprofit to acquire the property. A project plan will also need approval from the town Zoning Board of Adjustment and Planning Board.

Dartmouth College announced plans in September to build an apartment complex with 250 to 300 beds for graduate students on Lyme Road, though a plan has not been submitted to the town Planning Board for consideration.

The proposed project is a revision of the college’s previous plan, which would have housed up to 400 undergraduate students at the complex for the first 10 years.

College administrators said they intend to propose a new dormitory for undergraduate students on West Wheelock Street.

Newport

In Newport, a three-story building with 42 affordable apartments is on schedule to open for occupancy in January, according to developer Jack Franks, of the Walpole-based Avanru Development Group.

The units include 24 single-bedroom and 18 two-bedroom apartments, green space for residents behind the building and a parking lot with capacity for 87 vehicles.

Avanru constructed the building using a modular building method, in which the modules are constructed off-site and then attached to the structure.

“Modular practices have been around for years,” Franks said. “I took those practices and refined them for multi-family residences.”

Avanru’s construction method is 50% faster than traditional building methods, according to Franks, and supports a thermal energy system that significantly reduces energy usage and results a lower carbon footprint.

“We can’t spend our way out of the housing crisis,” Franks said. “We must engineer a better path forward. And that is what we have done.”

Avanru is also seeking approval from the Newport Planning Board to build a 96-unit senior housing facility on Route 10 near the Newport airport.

Coming online

Not all projects have been stymied by the economic uncertainties of real estate development. In Lebanon, for example, five recently completed apartment housing projects — including Marek South on Mount Support Road and Summit on Juniper, which houses Dartmouth College students — all completed construction within four years of permitting and have added a combined 648 apartments to the housing mix.

A handful of commercial apartment projects are slated to open for occupancy between December and April, and the property managers are currently accepting applications from prospective tenants.

Developers of Marek South, a five-story building on Mount Support Road with 250 apartments, plan to welcome their first tenants in mid-December.

“The furnishing of the lobby is literally finishing up this week,” said Don Smith, of Saxon Partners, a real estate firm in Hingham, Mass.

Marek South is part of a two-building development that has been designed as housing for Dartmouth Health employees. Construction of Marek North, a building with 204 apartments, is expected to begin next spring and is scheduled for completion in 2025, according to Smith.

Smith said they designed their apartments, as well as amenities, based on conversations with Dartmouth Health administrators and staff regarding what would appeal to employees.

Amenities that include fitness facilities, co-working spaces and lounge areas are aimed to encourage socialization and a fun, comfortable lifestyle, according to Smith. Each apartment also includes a kitchen, and a washer and dryer.

The development is just over a mile from Dartmouth Health and on both the multi-modal path and the Advance Transit bus route to the hospital.

Marek is in the early process of leasing units, Smith said.

The unit mix includes 126 one-bedroom apartments that range in size from 727 to 759 square feet and 124 one-bedroom “junior” apartments — smaller units with a 514 square footage that Smith described as upscale studios-like spaces.

Rents for the junior apartments start at $2,200 a month, and the one-bedrooms start at $2,550 to $2,600 a month depending on the square footage.

Patrick Adrian may be reached at padrian@vnews.com or 603-727-3216.