author Peter Francese discusses New Hampshire’s path toward a gray future and what we can do to fix it

Judging from the demographics, New Hampshire communities seem hell-bent on chasing out young people with legal pitchforks and torches, while rolling out the welcoming mat for old retirees. The result: The Granite State is rapidly going gray. And, if the exodus of young people and the influx of old people continue, it will have devastating long-term consequences for New Hampshire’s economy.

That’s the basic premise behind the new documentary and accompanying book “Communities & Consequences: The Unbalancing of New Hampshire’s Human Ecology, and What We Can Do About It.” Co-author Peter Francese will discuss the book at Portsmouth’s RiverRun Bookstore on Wednesdsay, Feb. 20.

According Francese, a demographic analyst who lives in Exeter, a spate of perilously misguided perceptions among community leaders and planners has triggered the out-migration of young people from New Hampshire. Foremost among those misconceptions is the belief that children create a financial liability that communities cannot afford to absorb.

“The perception of children used to be, a couple of decades ago, that they were a precious resource. They were absolutely essential to the future of our community,” Francese said. “That perception has switched, so that now they are perceived as an intolerable financial burden.”

The prevailing belief among modern municipalities, according to Francese, is that the introduction of more children to any school system boosts the cost of education, thereby tightening pressure on local property taxes. As a result, most city councilors, planning board members, town selectmen and other community officials gear their policies toward keeping working families out and inviting older people in.

The problem, according to Francese, is that those community officials are dead wrong about children’s financial impact. And the policies they are enacting as a result will, in time, crush New Hampshire’s economy and lead to even higher property taxes.

“The worst fallacy of all is that town after town blames their high property taxes—which are very high—on children, and it is not their fault, at all,” Francese said. 

Fortunately, there is still time to reverse the “graying” trend. Co-authored by Francese and N.H. Agriculture Commissioner Lorraine Stuart Merrill, “Communities & Consequences” is intended to educate citizens about the serious demographic issues facing New Hampshire and inform them about what they can do to get the state back on the right path.

Francese has been analyzing nationwide and worldwide demographic and consumer trends since the late 1960s. After attaining a graduate degree from Cornell University, Francese helped found a company that served as a purveyor of demographic data from the 1970 census. In 1979, he founded American Demographics Magazine, which he sold to Dow Jones in 1981. He continued to work for the magazine for the next 20 years, mainly living in Ithaca, N.Y. His family moved to New England in the mid-1990s, when his wife got a job in New Hampshire. Francese has lived in Exeter for most of the last 10 years and previously lived in Portsmouth.

The idea behind “Communities & Consequences” arose about a year and a half ago, when filmmaker Jay Childs approached Francese after seeing him give a presentation on demographic trends. Childs told Francese he wanted to make a documentary about some of the trends he had been describing and asked the veteran demographer to help out. Francese jumped at the opportunity and suggested accompanying the film with a book and Web site. After writing an outline of the book, he contacted Merrill, a partner in Stratham’s Stuart Farm and a freelance journalist. Merrill had interviewed Francese several times for articles she had written about second homes in New Hampshire.

“One of the aspects of New Hampshire demographics that I study is the proliferation of second homes,” Francese explained. “We’re third in the nation in the percentage of dwellings that are, in fact, vacation homes or second homes.” 

Merrill agreed to help out with the book, but the co-authors found themselves in a time crunch when Merrill was appointed as the state’s Agriculture Commissioner late last year. The pair rapidly interviewed town planners, working people and concerned citizens around the state, compiling ideas and information for their book, which was ultimately published by Peter E. Randall Publisher in Portsmouth.

What, in a nutshell, is the book about?

“The title says it all: ‘Communities and Consequences,’” Francese said. “The decisions that are being made regarding land use and land restrictions at the community level have enormous long-term economic consequences.”

Those decisions often include the exclusion of workforce housing developments from communities. City officials tend to resist such developments because of the egregiously flawed belief that reasonably priced housing would introduce two children per unit into local schools. 

“Now, that is totally, totally false, absolutely unequivocally false. But, it is so widely believed that whenever a developer puts forth an idea for reasonably priced housing, town after town does whatever it takes to stop the development,” Francese said.
As an alternative, communities commonly require developers to build only age-restricted developments. The assumption is that, by establishing developments that only house people aged 55 and older, communities will add to their tax bases without increasing education costs.

The falsity of that assumption, according to Francese, is multi-faceted. Not only does he consider age-restricted housing blatantly discriminatory, but demographic studies have found that workforce housing units, on average, introduce .5 children to the school system—not two. Furthermore, the introduction of more children to a school system has little or no impact on education costs. The major factors that drive up education spending, according to Francese, are fixed costs, like increases in teacher salaries due to inflation and the rising costs of health insurance, fuel and energy.

“Ten kids, 20 kids, 50 kids, plus or minus, in a school district has absolutely no effect on the cost of public education, whatsoever. None. Zero. Because, 99-plus percent of all the costs of a public education system are fixed,” Francese said.
What’s more, attracting large numbers of older people to the state has hidden costs that could have disastrous long-term impacts.

“When you have a very great increase in that population, it results in what’s called cost shifting, so that the cost of health insurance is much higher than it would be if we had a normal age distribution,” Francese said. “At some point, you raise the cost of health insurance for working-age people to such a point that employers stop offering it, or they leave the state.”
And, as young people leave the state like migratory birds, retirees spill in like May floods. Many communities offer senior citizens big breaks on their property taxes. According to Francese, New Hampshire’s tax structure is causing a rapid influx of elderly people—one that dwarfs trends in other New England regions. 

“There are warrant articles all over the state to give people over the age of 65 a break on their property taxes, within certain income and asset levels,” Francese said. “What that does is it encourages more retired people to move to New Hampshire, because there’s no income tax, there’s no sales tax and, if you play your cards right, there’s no property tax, either.”
Encouraging age-restricted housing and discouraging workforce housing is a “deadly combination” that “could not possibly be worse for the long-term economic outlook for the state,” Francese added.

After all, working-age people spend more money at local businesses than any other demographic. Visit downtown Portsmouth on a Friday evening. Who do you see perusing local shops, sipping coffee in cafés, eating dinner in restaurants and gulping cocktails in bars? Primarily, you see people well under the age of 55.

“Most elderly people very rarely go to malls or shop or buy things, because they don’t have any kids to buy things for and they’ve got most of the stuff that they’ve already owned,” Francese said.

Meanwhile, as retired seniors flood New Hampshire, the state’s pool of young residents is rapidly shrinking. Most young people—especially those with families—find other parts of the country much more welcoming.

The problem is not exclusive to New Hampshire. All six of the New England states are experiencing an alarming out-migration of working-age people. Although New Hampshire had a fairly typical age distribution as recently as 1990, it is now the sixth oldest state in the nation, Francese said. Neighboring Maine, however, is the single oldest state in the nation, and Vermont is second on the list. Six of the 12 oldest states in the nation are the six New England states.

New Hampshire has a unique variation on the problem because there is no sales or income tax, which increases reliance on property taxes for education funding. So, should state legislators be discussing the introduction of a sales or income tax?
“Absolutely not. Unequivocally, totally nil,” Francese said.

On the contrary, aging statistics show that New England states that do have sales and income taxes are not doing any better than New Hampshire. Francese pointed to the example of Connecticut, which introduced an income tax in the early 1990s as a way to reduce property taxes. It didn’t help. So, later, the state introduced casinos, “which, of course, is the worst possible thing you can do,” Francese said. The casinos, he continued, have sucked billions of spending dollars out of local communities.

Massachusetts and New Hampshire have also toyed with the notion of introducing casinos to raise revenue. To Francese, such discussions illustrate the tendency toward half-baked solutions to the issue of education funding.

“It doesn’t make any sense to just throw money at the problem. At no time in our book and our documentary do we suggest that more money is somehow the answer. Smart growth is the answer,” he said.    

Workforce housing is essential to smart growth. Without it, young families will continue to leave the state at a rapid pace. 
“When the workforce declines, the economy of the state declines as well, and it will decline very rapidly,” Francese said. “If the population among working-age people does not start growing again in any significant way, the state of New Hampshire is in pretty deep trouble.”

What is the solution? It starts with clearing up the rampant misconceptions that surround workforce housing. These misconceptions are shared not only by community officials, but by residents who own homes in New Hampshire communities. Francese said that people tend to equate the term “affordable housing” with “Section 8 housing,” and incorrectly assume that such developments will be filled with criminals. This perception leads to a “not in my backyard” mentality, with homeowners worrying that nearby affordable housing developments will devalue their own properties.

“I think there is a certain elitism, in the sense that people don’t want working class people living in their community. And that is just horrible, because they don’t understand how detrimental that is to the local economy,” Francese said. “Without a growing workforce, their property values have nowhere to go but down, because without a workforce, you don’t have housing demand. By excluding workforce housing, they’re not protecting their backyard, they’re hurting themselves, big time.”
Reversing current demographic trends will require concerned citizens to step up and take leadership roles in the effort to retain young people. Francese pointed to the “55 percent solution,” an effort spearheaded by University System of New Hampshire Chancellor Stephen Reno. Studies have found that 50 percent of students who graduate from New Hampshire universities leave the state after college and don’t come back. Reno’s goal is to decrease the percentage of departing students to 45 percent.

“It’s a pretty modest objective, but even that has consequences in the millions and millions of dollars of workforce growth and shoppers and what have you,” Francese said.

Any resident can make a difference by going to town meetings and actively objecting to policies that promote age-restricted housing and exclude workforce housing. Residents must vocally correct people who have misguided ideas about the effects of workforce housing.

“Workforce housing is the answer to our economic problems going forward. It will not increase anybody’s property taxes,” Francese said. “We’ve got to stop believing in myths and start believing in reality, because the bottom line is that we’re committing economic suicide by our public policies. It’s gonna take a lot to turn the tide into creating a situation where the state can recover from the damage that has been done over the last decade and a half, but I think it’s quite possible, and I have high hopes for the state.”

Peter Francese will be at RiverRun Bookstore on Wednesday, Feb. 20 at 7 p.m., free, 20 Congress St., Portsmouth, 603-431-2100, www.riverrunbookstore.com. To learn more about the documentary and book, visit www.communitiesandconsequences.org.