The Legislature Has Spoken: New Hampshire Doubles Down on Housing In Commercial Zones

Last year, the New Hampshire Legislature enacted HB 631, a landmark housing measure requiring municipalities to permit multifamily housing in commercially zoned districts. The law generated significant discussion among developers, municipalities, and property owners, but questions remained regarding the extent of local regulatory authority and how these projects would be reviewed at the municipal level.

This year, the New Hampshire Legislature answered many of those questions in a way that is very favorable to the development community.

HB 1010 and HB 1588 are a one-two punch that reinforce and clarify the framework established by HB 631. Taken together, these statutes send a clear message: multifamily projects are allowed by right in commercial districts, and municipalities may not use local regulations in a way that undermines or unreasonably restricts that objective.

Key Takeaways:

Multifamily Housing Remains a Permitted Use in Commercial Districts

The Legislature rejected efforts to repeal HB 631 and instead reaffirmed that multifamily housing opportunities must be allowed on commercially zoned land.

Municipal Review Authority Continues—But Is More Clearly Defined

Planning boards retain authority to evaluate traffic, water supply, wastewater capacity, and other infrastructure considerations. However, HB 1010 emphasizes that review must be tied to legitimate infrastructure concerns rather than generalized opposition to residential development.

Notably:

Where infrastructure is not currently adequate, the applicant may provide, fund, or upgrade the infrastructure necessary to support the project.  HB 1010 expressly recognizes that traffic, water, and sewer issues may be addressed through infrastructure improvements rather than serving as a basis for denial.

Equal Treatment for Residential and Commercial Development

HB 1588 prohibits municipalities from imposing setback, frontage, height, and similar dimensional requirements on multifamily housing that are more restrictive than those applicable to commercial uses within the same district.  As a practical matter, municipalities can no longer impose a residential development standard that is more restrictive than the standards applicable to commercial buildings in the same zoning district.

This provision will require many municipalities to revisit existing zoning ordinances, site plan regulations, and development standards.

Favorable Parking Guidance

The new legislation prohibits municipalities from requiring more than 1 parking space per unit or from requiring any parking spaces to be garaged.

By-Right Status Receives Additional Protection

The legislation reinforces the principle that multifamily housing in commercial districts is a by-right use. Municipalities may not impose additional approval requirements or development restrictions that are inconsistent with or more restrictive than the new state law.   This will also require many municipalities to revise zoning ordinances, site plan regulations, and development standards.

Adaptive Reuse Opportunities Expand

The legislation expressly permits conversion of existing nonconforming commercial structures to multifamily or mixed-use projects, provided the building envelope is not expanded.

Attorney’s Fees Recoverable

Perhaps most importantly, HB 1588 includes a fee-shifting provision that allows applicants to recover attorney’s fees when a municipality improperly denies a multi-family project or imposes requirements on a multifamily project beyond those authorized by the state law.  This provision significantly changes the litigation landscape by creating potential financial consequences for municipalities that don’t play by the new rules.

What This Means for Property Owners and Developers

The practical impact of these changes extends well beyond new apartment construction.

Commercial properties that previously may have had limited redevelopment potential—including aging retail centers, office buildings, underutilized commercial parcels, and mixed-use sites—may now present new opportunities for residential development, adaptive reuse, or repositioning.

At the same time, municipalities retain meaningful authority to address legitimate concerns regarding infrastructure, public safety, and site design. The Legislature has not eliminated local review. It has, however, substantially narrowed municipalities’ ability to use zoning regulations to prevent multifamily housing otherwise authorized by state law.

Looking Ahead

The next chapter will be written by planning boards, zoning boards, and the courts.

Questions regarding infrastructure standards, dimensional requirements, growth management ordinances, and the scope of municipal authority will undoubtedly continue to be tested. Nevertheless, the direction from the Legislature is unmistakable. HB 631, HB 1010, and HB 1588 collectively represent one of the most significant expansions of housing development opportunities in New Hampshire in decades.

Property owners, developers, investors, lenders, and municipalities should review pending projects and existing regulations carefully. Opportunities that did not exist a year ago may now be available.

This information is provided for educational purposes only. It should not be construed or relied on as legal advice. It is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication or other legal counsel.