New Hampshire’s housing crisis isn’t just a challenge for families and residents, it’s a threat to our state’s economic competitiveness. With median home prices rising 50% over the past five years and a rental vacancy rate below 1%, the state is becoming increasingly unaffordable for working families, young professionals, and seniors alike. This crisis is already taking a toll: workers are commuting from farther away, young talent is leaving for more affordable regions, and older residents are stuck in homes that no longer suit their needs. Meanwhile, employers across sectors struggle to fill jobs, threatening the long-term vitality of our economy.

A key driver of this crisis is outdated local zoning rules, particularly excessive minimum lot size requirements that limit how much housing can be built. These rules, while originally intended to protect health and safety, now act as a barrier to building the modest, attainable homes our communities need. They inflate land costs and make it economically unfeasible for developers to build anything other than large, expensive homes.

SB 84, the Starter Homes Act, offers a smart, targeted solution. It proposes reasonable limits on minimum lot sizes: half an acre in areas with public water and sewer, and two acres where those utilities are not available. These thresholds respect local infrastructure constraints while allowing for more housing supply diversity. Though it may seem technical, this reform goes to the heart of why New Hampshire has so little affordable housing. For years, lot size mandates have drastically constrained the construction of smaller, entry-level homes. These "starter homes"—typically two- or three-bedroom houses—are ideal for first-time buyers putting down roots or older residents looking to downsize while staying near family. Yet across the state, zoning rules that mandate excessive minimum lot sizes make it impossible to build them.

This gap in the market is often called the "missing middle"—housing types like duplexes, townhomes, and modest single-family homes that provide a bridge between rentals and larger suburban homes. In New Hampshire, only 14% of new homes built since 2010 have been under 1,800 square feet. Without zoning reform, builders are left with no choice but to produce only larger, higher-cost homes.

The consequences are stark. According to the U.S. Bureau of Labor Statistics, 27% of New Hampshire’s workforce is over age 55—the highest percentage in the country. As these workers retire, we must attract and retain younger talent. But without affordable housing, our ability to do so is severely compromised. At the same time, many older residents can’t find smaller homes to move into, leaving them in larger properties that are too costly or difficult to maintain.

Businesses feel the strain. The BIA’s latest business leader survey found that workforce availability is the top concern among employers. And yet, it shouldn’t be – New Hampshire ranks #2 in recently released U.S. News & World Report’s "Best States" list, thanks to our top-tier schools, low crime rates, and natural beauty. New Hampshire has incredible attributes in place to attract and retain talent. But if people can’t find a place to live, they either won’t come or can’t stay—no matter how attractive the rest of the package is.

Without the reforms proposed by SB 84, excessive minimum lot sizes will continue to drive up housing costs and limit supply. Young adults will leave New Hampshire for states with more affordable and accessible housing markets. Seniors are at risk of remaining limited to homes that no longer suit their needs. And employers will struggle to compete for talent in an already tight labor market.

Boosting housing supply is essential to lowering costs, attracting and retaining families, and sustaining economic growth. SB 84 is not a silver bullet to this crisis, but it is a vital first step. It’s both a reasonable and significant reform that modernizes outdated land use rules, opens the door for more housing supply, and enhances private property rights by expanding opportunities for landowners to use and develop their property.

New Hampshire’s economic future depends on solving complex challenges like our current housing supply and affordability crisis. SB 84, and pro-housing solutions like it, lay the foundation for a state where talent stays, businesses thrive, and our communities grow stronger.

Michael Skelton is president and CEO of the Business & Industry Association. Visit BIAofNH.com.