The core challenge: "Affordable housing" created through market incentives or one-time subsidies reverts to market-rate when restrictions expire. Permanent affordability — housing that stays affordable for decades or in perpetuity — requires a different set of tools that separate land value from housing value or bind future use through covenant.
In New Hampshire, several tools commonly used elsewhere are legally unavailable. Understanding what's off the table clarifies what the Housing Action Plan can realistically accomplish.
New Hampshire's Dillon's Rule Constraints
NH is a Dillon's Rule state: municipalities have only the powers expressly granted by the state legislature. Several affordability mechanisms that cities in other states use are not available to Portsmouth without state enabling legislation.
Mandatory inclusionary zoning (requiring affordable units as a condition of approval)
Commercial linkage fees (developer fees tied to commercial square footage to fund affordable housing)
Transfer taxes on real estate transactions dedicated to housing funds
Voluntary incentive programs: density bonuses, fee waivers, and expedited review in exchange for affordability commitments. Residential districts only after September 13, 2026 — see the flagged item below.
City land disposition policy: conveying surplus city land via ground lease or at below-market value with deed restrictions
GNOD land transfer (Section 10.686.30): privately-owned parcels conveyed to the City by GNOD developers at no city cost, then designated for below-market housing. The consideration for this transfer is the GNOD density bonus, and GNOD sits on commercially zoned land. From September 13, 2026, RSA 674:80 as amended by Chapter 329 bars municipalities from enforcing requirements beyond frontage, setbacks, and height on multi-family dwelling units in commercial districts. If the overlay’s unit caps are unenforceable, the bonus has nothing to trade and this pipeline may not refill. A written City Attorney determination is needed. Do not treat as available until it issues.
Resale covenants under RSA 674:60: deed restrictions on subsidized or city-assisted units that preserve affordability at resale
The available tools
Ground Lease
The city (or a CLT) retains ownership of the land and leases it to a developer or homeowner for a long term (typically 99 years). The lessee owns the building; the ground lease controls what can be built, how it can be used, and what happens at resale.
Community Land Trust
A CLT is a nonprofit organization that acquires and holds land, then leases it to homeowners or developers. The CLT's governing structure typically includes community representation. CLTs enforce resale restrictions through long-term ground leases.
Resale Covenant
A deed restriction recorded on an assisted property that limits the price at which it can be sold. Typically allows a modest equity gain tied to CPI or AMI changes while preserving affordability for the next buyer. Can attach to rental or ownership housing.
Density Bonus / Incentive Zoning
The city voluntarily offers additional height, density, or reduced fees in exchange for a developer voluntarily including affordable units. Because participation is voluntary, this is not mandatory inclusionary zoning — and is permissible under Dillon's Rule.
Comparing the tools on key dimensions
Housing Action Plan items that deploy these tools
HAP items that create or operationalize permanent affordability mechanisms in Portsmouth.
For triage: When a HAP item promises "permanent affordability," check the mechanism. Term-limited covenants expire. Density bonuses require voluntary participation and calibration. The only truly durable tools are ground leases and CLT structures — and both require the city to either own land or acquire it. Public land inventory and RFP policy (PL-1, PL-2) is therefore a prerequisite for any serious permanent affordability strategy. A second land pathway has existed alongside it: the GNOD land transfer mechanism (Section 10.686.30, HAP item Z-1/PL-8), which allows privately-owned parcels to enter the public housing pipeline at no city acquisition cost — but that mechanism is now contingent on whether the GNOD density bonus survives RSA 674:80 as amended by Chapter 329 on September 13, 2026, and should not be counted on until the City Attorney determination issues. Land alone does not resolve the operating gap in any event. State AHF funding remains the binding constraint regardless of how land is acquired. The broader lesson of the 2026 preemption is worth stating plainly: tools that operate by contract and covenant — ground leases, CLT structures, resale covenants, disposition agreements — are unaffected by state limits on zoning conditions. That is now the durable half of this toolkit.