LEBANON — The City Council appears to be heading into uncharted territory when it comes to addressing the housing crisis by getting directly involved in a development project.

At a special meeting Thursday, council members will consider a draft resolution prepared by city staff that lays out steps the council could take, including “the possibility of a ‘demonstration project’ on a city-owned parcel.”

If the council ultimately adopts the resolution, it would direct city officials to “take steps to enable, incentivize and partner in the development of housing.”

“It’s become the No. 1 issue in the Upper Valley,” City Manager Shaun Mulholland said this week.

The draft resolution was developed out of a series of housing workshops the City Council began holding in January.

“We’ve never had a policy on the role of the city in developing housing,” Mulholland said. “This is kind of a first. This is a pretty big change.”

One piece of the resolution calls on the city to partner with the Lebanon Housing Authority to use municipal properties for affordable and workforce housing.

As an example, Mulholland pointed to an open lot at 3 Seminary Hill, a property that was taken over by the city. Mulholland said the lot is suitable for a six-unit apartment building.

“Let’s see who’s interested in developing a workforce housing project if we gave you the land,” Mulholland said. “We have about 20 of those (lots).”

While it’s normal for municipalities to adjust zoning or planning regulations to encourage builders to develop affordable housing, what actually gets built typically is left to market forces.

David Brooks, Lebanon’s director of planning and development, said the city is looking go beyond the normal steps to help alleviate the city’s housing shortage.

“The city doesn’t build housing; we’re not in that business,” Brooks said. “But we can partner with projects to see them happen.”

Brooks said in adopting the ordinance, Lebanon would be joining a few other communities that have committed to get more directly engaged in the housing issue.

“There aren’t many that are actively looking for ways to get involved and to have a role in developing housing in their community,” Brooks said. “It’s a local issue, it’s a regional issue and it’s a state issue. It’s going to take more than any one community to solve the issue.”

Mulholland said the conversation began during the pandemic as rents and housing prices in the region spiraled higher.

“The question is what is the role of the city in development of housing,” Mulholland said. “It really isn’t the role of the city. We had to talk about that and think about that. What are the options, and what can the city do to enhance housing here? Should the private marketplace be doing that as it has in the past?”

Mulholland said the housing situation has grown so bad that even if a person can afford a rental or to buy a home, there’s no guarantee one can be found.

Ditha Alonso, executive director of the Lebanon Housing Authority, knows firsthand the difficulty of locating affordable housing for low- to moderate-income families in the city.

“Our waiting list is years long,” Alonso said.

The Housing Authority participates in a voucher program through the Department of Housing and Urban Development, but Alonso said that the demand far outpaces availability, and rents are well beyond what the average lower-wage worker can afford.

She said the LHA likes to see people spend no more than 30% of their gross income on rent.

“For the low- to moderate-income families working in the Upper Valley, it’s tough to find housing if you’re not making $40,000 or more per year,” Alonso said.

Alonso said rents are trending toward $1,200 to $1,300 for a one-bedroom apartment and from $1,400 to $1,800 for a two-bedroom.

“The market rents right now are not affordable,” Alonso said. “It’s definitely escalated over the years.”

Lynne Goodwin, the city’s human services director, said Lebanon rental rates are higher than surrounding communities, but federal housing allowances do not account for difference.

Goodwin said HUD looks at Grafton County as a whole, and the agency’s fair-market rent determination puts a one-bedroom at $893 and a two-bedroom at $1,162, well below actual market rates, which start at about $1,110 for a one-bedroom and $1,395 for a two-bedroom.

“There are many, many more going for much more than that,” Goodwin said.

The draft resolution the council will discuss Thursday also includes zoning recommendations, including amending zoning to enable cottage cluster housing where appropriate, and the draft also calls for revising regulations for manufactured home parks and subdivisions.

The resolution also calls on the council to take a closer look at increased density in some areas.

Brooks said individually the proposals in the resolution won’t solve the city’s housing problem, but in combination they could be part of the solution.

“There are no magic orbs,” Brooks said. “It’s a lot of little things communities are going to want to do and need to do to solve the housing shortage. Hopefully, all of them together can have an impact.”

The special meeting will be held at 6 p.m. Thursday in the council chambers at City Hall.

Darren Marcy can be reached at dmarcy@vnews.com or 802-291-4992.