LEBANON — Amid the ongoing housing crunch in the Twin States, people were cleared out earlier this spring from the eight rooms in the front portion of a building on Bank Street in downtown Lebanon, which is slated for demolition.

The demolition of 14 Bank St., near Colburn Park and across from AVA Gallery, is part of plan for a 26-unit residential development, which has been delayed due to supply and labor problems, according to property owner Jolin Salazar-Kish.

In spite of the construction delays, residents needed to be removed because that part of the building, which dates to 1848, “needed more immediate attention,” Salazar-Kish said.

Tenants had a two-month warning before leases were discontinued on April 1, said Lynne Goodwin, Lebanon’s human services director. Goodwin said her office heard from only one tenant who needed assistance relocating in late March.

“I was surprised by that,” Goodwin said, given the scarcity of housing in the Upper Valley.

While the office was in the process of providing the requested assistance, the person was able to find alternative housing, Goodwin said.

With those eight Bank Street rooms unavailable, at least in the near term, Lebanon — with of population of 13,500 people — is down to just 61 single-room occupancy units in the entire city.

Increasing that number is part of a list of suggestions Goodwin said she is preparing for the Lebanon City Council ahead of its Wednesday meeting where she will present a report on housing and homelessness in the city.

“We need more single-room occupancy,” Goodwin said. The city “couldn’t really afford to lose those units.”

The boarding house-style accommodation, with no kitchen and a shared bathroom, “fills a critical need,” Goodwin said. The units fit the bill for people “not looking for any frills” and for “something relatively low-cost,” she said.

She’d like to see single-room occupancy units that have rents capped. The going rate of $800 or $900 a month is not affordable for people living on social security, she said.

The city is supporting some people who until April had been receiving support through the federal Emergency Rental Assistance Program.

“Some found places,” Goodwin said. “Some have continued to need some support in motels.”

The city hasn’t heard from approximately one dozen households who had been staying in area motels under ERAP but lost that support earlier this year, she said. Goodwin heard from Lebanon police recently that at least one former ERAP participant is now camping. She guessed that others are doing the same or couch surfing.

In addition, she said she’s aware of three households with children who are set to lose ERAP support next month.

In spite of the need, the boarding house component of the 14 Bank St. property made it challenging to manage, Salazar-Kish said. She described it as “almost like a hotel.”

“That’s how the building was when we bought it,” Salazar-Kish said of the boarding house-style rooms.

She purchased the property for $450,000 in 2017, according to city records. In addition to the boarding house, the nearly half-acre lot also has three one-bedroom apartments in the back. The neighboring .73-acre 8-10 Bank St., which now has a five-unit multi-family rental building, is on the same property card.

Salazar-Kish described the mishmash of housing as “a very hybrid living situation” and said it “wasn’t ideal for sure.”

But given delays in getting the larger project off the ground, she may reopen the rooms once renovations are complete and the building is safe.

The approved plans call for replacing the 14 Bank St. building with a new three-story building, which is to include 18 two-bedroom apartments. The building at 8-10 Bank St. is eventually slated for an addition to add three apartments.

An earlier version of the project, which would have included more than 40 units, received pushback from neighbors and the Planning Board.

Salazar-Kish said she’s found it difficult to find contractors and get prices on materials. In one example, she said it could take as much as two years to get new electrical meters.

“Supply chain things are making a lot of projects quite difficult to build in any kind of timely way,” she said.

In addition to supply challenges, costs of labor, materials and capital have increased since Salazar-Kish initially pitched the project in 2019.

“Costs are astronomically higher,” she said. “The economics of projects are quite different.”

How different is uncertain, given that Salazar-Kish said she has been unable to even get subcontractors to bid on the project.

“Everybody’s fighting for the same few people,” Salazar-Kish said. The “labor market has shrunk. People are retiring and nobody’s replacing them.”

In the meantime, demand for the apartments she rents has not lessened. In her 20 years as an Upper Valley landlord, Salazar-Kish said she’s never had a vacant unit. And rents continue to increase with costs of services such as property taxes, trash removal, snow plowing, she said.

With costs rising, Salazar-Kish said she couldn’t predict what the market rate would be for the new units once they’re online.

“Not until we get closer,” she said.

Salazar-Kish has until June 19, 2024, to get a building permit, according to an extension the Planning Board unanimously granted in December.

Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.

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