Census Suggests N.H. Has An Edge

In river towns along the Connecticut, population was stagnant or grew only slightly in most of the larger towns on the Vermont side while nearby New Hampshire hubs enjoyed more robust gains. Springfield is one exception.

http://www.vnews.com/03272011/7715697.htm

Published 3/27/2011

Census Suggests N.H. Has An Edge
By John P. Gregg
Valley News Staff Writer

Along the Connecticut River Valley, a clear pattern seems to be emerging from 2010 Census numbers -- population was stagnant or grew only slightly in most of the larger towns on the Vermont side of the river while nearby New Hampshire hubs enjoyed more robust gains.

Lebanon's population grew by 4.6 percent, while Hartford's dropped by 4.2 percent. Hanover was up 3.8 percent, Norwich, its partner in the interstate Dresden school district, down 3.7 percent.

The town of Windsor lost 5.4 percent of its population, and other old river towns in Vermont fared little better -- both Brattleboro and St. Johnsbury grew by less than 1 percent.

If you think growth is good, could there really be something to the so-called “New Hampshire advantage” when it comes to taxes and economic vitality?

That could be the case in the Upper Valley, where New Hampshire towns grew by 6.4 percent, while their Vermont counterparts increased a paltry 0.1 percent, according to a Valley News analysis of the new Census data.

The lack of a state income tax in New Hampshire clearly played a role, as did more housing options in the Granite State, according to new residents who bought homes in fast-growing New Hampshire towns over the past decade.

“I initially considered both states and then started looking at income taxes, property taxes, and those kinds of things, and realized my best bet would be to stay on the New Hampshire side,” said Thomas Rucinski, the director of consulting services in human resources at Hypertherm, a major employer in the Etna Road business corridor. Rucinski bought a home in New London when he relocated from Wisconsin in November 2009.

Lisa Miller, now the executive director of the Center for International Business at the Tuck School of Business, said she and her husband, Dartmouth College history professor Ed Miller, briefly considered some Vermont towns when they first moved to the Upper Valley from suburban Boston in 2004.

But since both of them work in New Hampshire, it would have been a financial disincentive to buy in Vermont.

“The income tax situation was a concern,” she said. “The property taxes were going to be fairly high anyway (in Vermont), and then if you added the income tax, we sort of felt ‘why?'”

The couple, who now have two grade-school children, bought a four-bedroom home at Eastman in Grantham, which grew by a whopping 37.7 percent between 2000 and 2010, much of it driven by families with children.

Gerry Stark, who has sold real estate on both sides of the river since 1987, said with many of the jobs in the Upper Valley based in New Hampshire -- either at Dartmouth-Hitchcock Medical Center and Dartmouth College or from companies along Route 120 that have spun off from research at the two institutions -- people relocating to take jobs here are more inclined to buy in New Hampshire.

“People say, ‘if I work at Hitchcock, and I have to pay income taxes for living over the river, why would I do that?' ” said Stark, the principal broker and co-owner of Hanover-based ReMax Upper Valley. Stark also said the growth in property taxes in Vermont, despite income sensitivity programs for families making less than $90,000, has also been a factor.

“People used to say you have to pay income taxes in Vermont but your property taxes are much, much less. That's no longer true,” Stark said.

Not every Vermont river town declined. Springfield, Vt., grew by 3.2 percent, and Bradford and Newbury, Vt., saw even greater gains.

But overall Windsor County lost 1.3 percent of its population, and Orange County grew by just 2.5 percent, while Grafton County was up 9 percent and Sullivan County by 8.1 percent.
Only Part of the Answer

Richard Wright, a Dartmouth geography professor who studies migration and housing markets, said the tax differential is undoubtedly the “first thing you have to talk about. No income tax, no sales tax. I think that has to be part of the explanation.”

But he also said it is “very much a partial explanation.”

Other factors, Wright said, include the fact that the “main concentration of employment” is found in Lebanon and Hanover, and so the resulting transportation network comes into play. People relocating to the Valley may be told to avoid crossing the Ledyard Bridge or sitting at the Interstate 89 interchange with Route 120, as they would commuting from Vermont.

“We don't have a rush hour in the Upper Valley like a metropolitan area, but when you try to get from A to B, you do take into account the bottlenecks,” Wright said.

Hypertherm, one of the largest private employers in the Upper Valley, said 73 percent of its employees live in New Hampshire, just 27 percent in Vermont.

In addition, much of the growth in the Twin States is from migration, not birth rates, Wright noted. “This has to do with mobility, not with differences in fertility rates,” he said.

The presence of Dartmouth College has also encouraged both individual baby boomer couples to retire here, and spawned more retirement communities, which Wright said appear to be “New Hampshire-biased.”

“The college is a bit of a magnet for retirees, and this portion of New Hampshire is a magnet for retirees,” he said.

Hartford Town Manager Hunter Rieseberg, who previously worked as a town manager on New Hampshire's Seacoast, said the tax differential has always been a disadvantage for Vermont.

“Part of the problem for communities on this side of the state is they are in such close proximity to New Hampshire that if (people relocating here) can find housing in an area that is perceived to be a nontax environment, then they do it,” Rieseberg said.

Norwich resident Kathy Hoyt, the former top fiscal aide to then-Gov. Howard Dean, D-Vt., agreed that taxes, at least superficially, could drive migration toward the New Hampshire side of the river.

“I think if you look at just the surface of the situation, that's probably true. As long as you are not a retiree moving to New Hampshire, you do pretty well,” said Hoyt. (The Granite State has a 5 percent tax on interest and dividends above $2,400, and a businesses enterprise tax, that many are not aware of.) “But I tell you, when you get down to those dividend taxes and things people don't realize they have in New Hampshire, there are a lot of things that come into play.

Hoyt has served on a Blue Ribbon Tax Structure Commission in Montpelier that recommended Vermont broaden its tax base by using adjusted gross income and then lowering tax rates to become more competitive with other states.

Senate President Pro Tempore John Campbell, a Quechee Democrat, rejected the notion suggested by the Census figures that the tax or business climate in Vermont is driving more people to New Hampshire. Campbell noted that upgrades to some affordable housing stock in Windsor may have led to fewer units there, and that Hartford's decline could be driven, in large part, by the slow economy's effect on the second-home market at Quechee Lakes.

“I don't buy that at all,” Campbell said of the New Hampshire tax advantage argument. “What everyone misses when they are calculating taxes is we may have an income tax and a sales tax, but in New Hampshire, if you add up all their fees and local taxes, you'll see we are not that far apart.”
Subdivisions and Serenity

Another factor could be the fact that the New Hampshire side of the river has had more major subdivisions over the past decade, creating more housing options for younger families with children.

Hanover, for example, has seen a number of developments that can accommodate families with children, including Gile Hill and Velvet Rocks, while Norwich had little, if any, such development, noted Kari Asmus, the chairwoman of the Dresden School Board.

Census figures show Hanover added more than 450 housing units over the past decade, while Norwich added just 48. Over that time, Hanover's under-18 population dipped by only 1.3 percent, while Norwich's plummeted by 20 percent, according to the new Census data.

“Hanover has added 450 housing units. When you are adding that many units, there are going to be kids included, particularly when they are family friendly,” Asmus said.

Officials varied on whether it is harder to develop housing in Vermont, where the Act 250 process comes into play for subdivisions of 10 or more lots.

“Absolutely, it's like night and day from New Hampshire, from my point of view,” said Mark Phillips, a developer from southern New Hampshire who in 2005 began trying to build a new housing subdivision on an old horse farm in Windsor near Interstate 91.

The town supported the plans for the 90-unit, 55-acre Morgan Meadows, and Phillips said the houses were critically needed given Windsor's aging housing stock.

“My thing was to build work force housing, entry-level housing for the typical resident of Windsor, not for the ski crowd,” Phillips said.

The Act 250 hearings focused on such issues as preserving prime agricultural soils on the site and screening the proposed houses from the interstate. Phillips recalled he asked an architect hired by the Act 250 panel why protecting the view of passing motorists was so important.

“Does that mean the highway is a negative from the houses, or the houses are a negative from the highway, and they said the houses,” Phillips said. “And I said, ‘So, you'd rather have people drive through the state then live there?' ”

Phillips agreed to some modifications and ultimately won Act 250 approval in 2007.

But three abutters appealed, including a Vermont Law School professor who maintained that his enjoyment of growing vegetables, herbs and fruit on his 4.7-acre property would be “greatly diminished” by having to look at houses that might be built on prime farmland in the proposed subdivision.

The VLS professor, Craig Pease, said last week he has four pending cases concerning Morgan Meadows, including the Act 250 appeal; a public records case against the Windsor Development Review Board now before the state Supreme Court; an appeal of the DRB subdivision permit; and a civil rights claim against the town stemming from a public records request in the case.

Phillips, who planned the project before the recession, has yet to break ground in Windsor.

Despite such cases, Rieseberg, the Hartford town manager who previously worked in Hampton, N.H., said he doesn't think it's necessarily more difficult to build housing in Vermont.

“Having worked on both sides of the border, I see the environments are pretty equally complex, but any new construction is quite costly, and I think it's difficult to build anywhere in the Upper Valley from the nature that it's a valley” -- with sloped terrain rather than an abundance of flat land, Rieseberg said.

The disparity in growth rates between the two states also raises the obvious question -- is population growth necessarily desirable?

Anne Duncan Cooley, the executive director of the Upper Valley Housing Coalition, noted that, given the sharp drop in enrollments, and corresponding state aid, some towns are rethinking their objections to housing that brought children to town.

“What you are starting to see is a real reversal of, We can't have any kids in town, it's too expensive, to now it’s, How do we attract more kids to town so our schools are more viable?” said Duncan Cooley.

Because both states draw baby boomers and retirees who prize the natural landscape of the Upper Valley, the lack of sprawl is also a potential attribute.

Hoyt said many of her fellow Valley residents say they are glad not to be living in the Burlington area, which has noticeable sprawl along Interstate 89.

“If you look at Burlington, you can find where things are really growing, and a lot of people who live down here say, I'm glad I'm not living in the ‘Mistake on the Lake,’ ” Hoyt said.

But New Hampshire state Rep. Paul Mirski, an Enfield Republican, all but mocked Vermont's anti-development ethos, saying by e-mail, “I suppose that trust fund babies and rich retirees like the lack of growth. Looks good on postcards after all.”
Growing in Grantham

One of the fastest growing towns in the Valley was Grantham, where the Census showed the population soaring by 37.7 percent. Many of the newcomers were families with children looking for more affordable housing, which the town had in abundance, and good schools.

George Sutherland, a retired insurance executive who moved full-time to the Eastman residential community with his wife in 1994, said houses in town back then were routinely marketed as “low-tax Grantham.”

Sutherland said most residents in the Eastman community, which features a golf course, lake and other outdoor amenities, were seasonal back then.

The Sutherlands used to remark on the fact when a car went up their road in the winter, but now most of the homes there are occupied full-time.

“We were very much aware in November and December of the snowbirds going south, and we were equally aware when they returned in the spring,” said Sutherland, a former chairman of the Eastman Community Association. “Not so now.”

Page Rich, an organist and choirmaster at a church in New London, and her husband, David, bought in Eastman last spring when they moved to the area when he began a neonatology fellowship at DHMC.

The couple has two children not yet in grade school, and Rich, a native of southern New Hampshire, said it felt more natural to buy in her home state.

They were drawn by the record of the Grantham Village School and the fact that they can easily access the hiking trails and go snowshoeing as well.

“We were looking at schools and heard great things about the Grantham school. That certainly was a factor of us,” Page Rich said. “To be able to walk out of our house and go for a hike without having to get into our car was very appealing to us.”

Lisa Miller, the Tuck School administrator, said she and her husband had been “horrified” by house prices in Hanover and had bought in Grantham in 2004 after also reading about the strong track record of the school via the Internet.

While they live farther from Hanover's orbit than the typical Dartmouth faculty couple, Miller said they have a “close-knit community” of friends in Grantham and the family has the space they needed. She also said her door-to-door commute is 30 minutes.

“It was the combination of really good schools, and affordability,” she said of their decision to buy at Eastman. “We could get the house we wanted in Grantham.”

The Millers and Riches weren't alone in making such choices. Census data show that the number of children in town skyrocketed by 48 percent over the past decade. With such growth has come some stresses, including a school bond and higher taxes in recent years.

The growth in Grantham was seen, on a smaller scale, in Newbury, Vt., and Bradford, Vt., where a strong school and affordable housing has made that a bedroom community to the core of the Upper Valley, as well.

And many workers don't seem to mind the commute. Rucinski, the Hypertherm executive who bought in New London, said his half-hour drive from New London to Etna Road pales in comparison to his prior job in the Midwest.

“I was commuting from southern Wisconsin to Chicago, so anything shorter than an hour and a half seems pretty short to me,” he said.
Losing Population

Towns that lost population appeared to do so because of noticeable declines in the number of children under 18. The fact that Vermont is a popular destination for second-homeowners may also be contributing to the stagnation in full-time population.

Statewide, the number of housing units in Vermont grew by 9.6 percent over the past decade, compared with a 12.4 percent increase in New Hampshire.

But Vermont outpaced the Granite State in a related, but potentially more problematic, category -- 20.5 percent of units in Vermont are now considered “vacant,” a description that includes vacation homes, compared with just 15.6 percent in New Hampshire, suggesting that second-home buyers are a larger factor in Vermont's real estate market.

“In Vermont, there is this big proportion of second homes,” said Duncan Cooley, the executive director of the Upper Valley Housing Coalition. “It uses housing stock that would otherwise be available for residents for second homes.”

While Eastman in Grantham has become much more of a year-round community, Quechee Lakes in Hartford remains primarily a second-home community, and property values there have dropped with the decline in the vacation-home market.

According to the new Census data, a surprising 23.6 percent of housing units in Hartford are seasonal or vacant, while the number of children in town declined 14.4 percent since 2000.

Hartford school officials are considering a consolidation plan that would close the Ottauquechee School, where enrollment over the past five years has dropped from 241 to 200, a stark contrast to the fast-growing school in Grantham.

The only two Upper Valley towns in New Hampshire to lose population over the last 10 years, Cornish and Enfield, can trace their declines to a sharp drop in the number of children in town.

While 136 housing units were added to Enfield between 2000 and 2010, according to the Census numbers, the number of seasonal or vacant homes grew by 67. And the number of kids in Enfield dropped by 12 percent.

Enfield Public Works Director Jim Taylor, who was the town's former community development director, said most new housing units have no children living in them, including 12 homes built atop Methodist Hill in a new upscale development.

“There were about 270 people at Enfield Town Meeting, and I said I'll bet there wasn't six or seven people there under 35,” Taylor said.

The demographic hollowing out is also a concern in Woodstock, an old farm center that lost 16.5 percent of its kids and where 26.5 percent of the homes, more than one in four, are seasonal or vacant.

By contrast, Sutherland, the 79-year-old retiree in Grantham, said he welcomed the young families who have moved in around him. He noted he and his wife were about to visit friends living in an age-restricted community in Arizona and said he would “hate to be in a place like that” full time.

“The sound of children's laughter is one of my favorite sounds, and we've got a lot of that around here,” Sutherland said.