Gov. Chris Sununu isn’t shy about praising New Hampshire.

He boasts that the Granite State is ranked No. 1 for personal freedoms and quips that if lawmakers in Washington D.C. took note of what happens in New Hampshire, they could learn something about government efficiency.

New Hampshire is a great place to work, and live, he says. But in the background of the high-praise, we-do-it-best attitude, Sununu knows that one problem in particular needs attention: the housing crisis.

“It’s the number one barrier we have. I can’t bring more workforce in for your business if I have no place for them to live,” he told a crowd of business professionals at his annual “State of the State” address hosted by the Greater Concord Chamber of Commerce.

In his hour-long address, the governor explained key items in his budget proposal – education funding, mental health care, licensing reform and housing development – all of which are systems that can be more efficient, he said.

To increase the state’s housing stock, Sununu’s focus is on building more units. In the budget he’s proposed adding $30 million to InvestNH, a fund he launched this summer to accelerate housing development, $25 million to the state Affordable Housing Fund, which has supported low-cost residential projects since 1988, and creating a historic-homes tax credit for the redevelopment of old infrastructure into housing.

Whether it be a hundred-unit apartment building or a four-unit, multi-family home renovation, towns and cities need to continue to add housing options.

“I will challenge any planning board or any council who says they don’t want that housing in their town, then you don’t want to be part of the solution that New Hampshire needs,” he said. “Virtually every business in your town would love to have more affordable housing, more affordable units, more affordable multifamily units in their town for their employees.”

But local representatives might not be the only hurdle. Instead, Republican legislators are challenging Sununu’s proposed housing funding by stripping back his budget proposal.

On Monday a panel led by Republican lawmakers approved a $25 million funding cut, including removing $15 million from InvestNH and $10 million from the Affordable Housing Fund. They also suggested limiting the InvestNH funding to only support municipal grants, not proposed projects from developers.

The committee also eliminated the historic home tax credit.

Lawmakers justified the budget cuts by pointing out that the housing proposals outlined in Sununu’s budget were also in a current legislative proposal, Senate Bill 231.

“Because it’s been made a priority from the other body via [Senate Bill] 231, I think we can reduce the amounts for both programs to help us balance our side of the budget,” said Joe Sweeney, a Salem Republican, who proposed the funding cuts.

Yet the governor wants to see this money back in the budget, vowing to “jam it back in through the Senate” in his address.

The need for development was a theme of Sununu’s address last year, as well. In his 2022 speech, he announced his proposal for the InvestNH housing fund – which committed $100 million to development by accelerating existing housing projects and encouraging municipalities to support more units in their city or town.

Residents agree as well. In a recent poll from the University of New Hampshire, 32 percent of residents said housing is the most important issue facing the state, ahead of jobs and the economy, and the cost of living.

Since applications opened in July, InvestNH has funded 30 projects across the state, which will result in almost 1,500 new units. But with additional funding, a second round of applications – adding to the state’s housing stock, which in turn affects business and economic development, he said.

“If we’re not supporting housing, then you’re not supporting local business. If you’re not supporting local business, then your tax base is going to suffer,” said Sununu.

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