LEBANON — The city council is considering a partnership with Upper Valley Habitat for Humanity to move forward with a stalled project to build housing on Barrows Street. The council discussed options for the project at its Wednesday night meeting.
In July, the city council approved $2.05 million to build five homes on two longtime city-owned vacant lots. The city estimated the homes would cost just under $400,000, though the target price later rose to around $425,000.
The city initially planned to sell the houses through an applicant lottery. To move forward, the city required at least five qualified buyers, but only four people applied by the early October deadline. A fifth buyer applied after the deadline, but the project had already stalled.
Councilor Tim McNamara, who has led the project with city staff, said at the Wednesday meeting that the applicant shortage meant the city was not authorized to sign contracts. In the interim, contractors increased price estimates and one contractor was unable to secure a necessary bond. The longer the city waits to begin the project, the higher home prices will rise, he said.
McNamara and Mayor Doug Whittlesey said they have had early conversations with Habitat for Humanity staff on whether the nonprofit would be interested in building one home on the north side of Barrows Street. The city would build the other four homes.
“A potential option is to at least get one house up that people could look at that could then be sold, could go on the tax rolls, and to get some of the infrastructure in place, which might facilitate the remaining four houses,” McNamara said.
McNamara said the approach might allow the city to retain a $158,805 infrastructure grant from the New Hampshire Department of Business and Economic Affairs that must be used by July 1, 2027. If the city loses that grant, the Barrows Street home prices would rise to at least $450,000, McNamara said.
The question is “whether or not we can leverage that … grant to build the water and sewer infrastructure, which is not cheap,” Whittlesey said.
McNamara said repeatedly that talks with Habitat for Humanity were early and might not result in a partnership. Whittlesey described the potential partnership as in the “idea stage.”
“If it seems like I’m being vague on the details, I’m not,” Whittlesey said. “I just don’t have them.”
Ashley Andreas, executive director of Upper Valley Habitat for Humanity, told the Valley News that nonprofit staff are happy to explore opportunities with the city on the project, which aligns with the nonprofit’s mission of keeping people in safe and affordable housing, she said.
Lebanon City Manager Andrew Hosmer said the city pursued the project to create quality affordable housing for Lebanon residents. But as Barrows Street home prices approach market-rate, “it’s not truly affordable,” Hosmer said.
The median sale price for a single-family home in Lebanon was $620,000 through September, up from $500,000 at the same point last year, according to New Hampshire Realtors.
Hosmer said the project could expose the city to financial loss, and he floated the option of selling the land to a private developer.
The matter did not have a vote, because project leaders only sought to gauge councilors’ views on potential paths. Assistant Mayor Devin Wilkie said he supported continued talks and did not want to see the lots, which had been vacant and city-owned since 1947, continue to be empty.
He also said he would prefer the city not sell the land to a private developer.
“We originally talked about this as an affordable project. It sounds less like one, but certainly still more than what would happen in the open market with a developer,” he said.
Whittlesey said the city plans to notify applicants with preliminary updates, and that he and McNamara will continue talking with Habitat for Humanity staff. Whittlesey said he plans to present clearer pricing and further details in early 2027.
David Brooks, deputy city manager, also said he would consult with the New Hampshire Department of Business and Economic Affairs to ensure the partnership complies with the grant.
