Though New Hampshire Legislature has passed about 30 housing reform bills in the last three years, possibly the biggest reform—lowering minimum lot sizes—has remained illusive. Many legislators have refused to support it because they view it as too controversial.
Yet a new St. Anselm College Poll shows that legalizing small homes on small lots is extremely popular.
Nearly three-fourths of Granite Staters (74%) say that every town should have some places where it’s legal to build small homes on small lots, the St. Anselm College poll found.
This means that in New Hampshire, legalizing starter homes is even more popular than opposing an income tax.
More Granite Staters support legalizing small homes on small lots (74%) than oppose an income tax (71%).
At this point, to call legalizing small lot sizes “controversial” would be an act of violence against the English language. It would be more accurate to say that not reducing minimum lot sizes is controversial.
Granite Staters want the option of building or buying small homes on small lots. With demand for small starter homes so high, why isn’t there more supply?
The incredible answer is that local governments have literally made it illegal for builders to offer this option.
The New Hampshire Zoning Atlas catalogues all residential zoning ordinances in the state. Looking at minimum lot size regulations, the atlas concludes that “it is hard to find land to build small homes or starter homes in an economically viable way. Most communities have prohibited single family homes on small lots (
Only 13% of New Hampshire’s buildable property is zoned to allow a single family home on less than one acre, according to the Zoning Atlas. Excluding jurisdictions that don’t have a zoning code, the percentage is just 7%, according to the atlas.
Large minimum lot size mandates amount to a “ban on starter homes,” as the American Enterprise Institute (AEI) Housing Center puts it.
The AEI Housing Center defines a starter home as a home valued at no more than four times the median household income of its county. The center’s national database of lot size regulations finds that from 2015-2024, only 2% of homes built in New Hampshire met this definition of a starter home. AEI’s analysis found that home prices rose along with lot sizes.
“New Hampshire, along with much of the nation, faces a severe shortage of starter homes. This crisis delays life milestones—marriage, homeownership, and children—and fuels generational disillusionment about the pursuit of the American dream and long-term financial security,” AEI’s researchers point out.
“This crisis is largely because 90% of municipalities nationally have imposed minimum lot sizes on zoned lots. Without these limits, builders could construct many more starter homes at lower prices.
“In New Hampshire (2015–2024), the median metrics for homes built in new subdivisions were a lot of about 13,300 sq. ft., with 2,000 sq. ft. of living space, valued in 2025 at $688,000, about 6.9 times the median county-based household income. This is not a starter home.”
Research on minimum lot size restrictions shows a strong connection between these regulations and high home prices. A few of the more recent studies on the topic highlight the impact.
- A 2025 University of Colorado at Boulder study found that “doubling the minimum lot size increases home sales prices by 14 percent and rents by 9 percent.”
- A 2023 study by professors at the University of Pennsylvania and Brown University found that minimum lot size restrictions significantly increased home and lot sizes compared to neighboring towns, and raised home prices by about $30,000 in the most heavily regulated places vs the least heavily regulated.
- A 2011 study by researchers from Tufts University and the National Bureau of Economic Research examined minimum lot size restrictions in greater Boston. It found that minimum lot sizes pushed up prices by 20% or more at the high end of the price distribution, spilled over into nearby towns, and grew over time, “with effects as large as 40% occurring 10 years after the change” in lot size restrictions.
Minimum lot size mandates do more than raise the size and cost of each new home. They also cause fewer homes to be built. In this way, they wind up squeezing home buyers twice, once by reducing the overall supply of homes and again by artificially inflating the cost of the new supply that does get made.
Granite Staters seem to have figured this out. At this point, continuing to allow local governments to outlaw starter homes would appear to be both politically and economically foolish.
