LEBANON — City officials will seek pitches from developers for a workforce housing project at 20 Spencer St., a vacant lot that was once home to the city public works operations.

On Wednesday, the City Council will review the request for proposals, or RFP, that the city will use to solicit developers to present affordable housing ideas for the 1.9-acre downtown parcel.

At a meeting on Sept. 6, the council voted unanimously to authorize City Manager Shaun Mulholland to seek proposals for workforce housing from both nonprofit housing organizations and for-profit developers, eschewing a broader request that would also be open to commercial or mixed-use plans.

Workforce housing means housing with rents that are affordable to people earning 60% or less of the area median income, or a maximum income of $52,800 for a family of four in Grafton County.

For housing for sale, workforce housing means the sale price must be affordable to people earning no more than 100% of the area median income in Grafton County — or $87,000 for a family of four.

Councilors at the Sept. 6 meeting were divided about what types of development to consider for 20 Spencer St. While a slight majority of councilors wanted to prioritize affordable housing, other councilors wanted to seek a broad scope of proposals, including market-rate housing and commercial spaces for office or retail.

“I absolutely support housing and affordable housing, but I’d like to see all the options we could receive,” Councilor Karen Liot Hill said. “I don’t want to limit options prematurely.”

Hill said the council also needs to consider the city’s substantial investment to prepare 20 Spencer St. for redevelopment.

For example, between 2020 and 2022 the city spent $840,000 on environmental cleanup to remove polychlorinated biphenyls, or PCBs, a class of toxic chemicals found in electrical, heating and hydraulic equipment as well as some plastic and rubber products.

The recommendation to seek a broader scope of development proposals derived from the Economic Development Committee, an advisory group that the council asked to study options for 20 Spencer St.

The Economic Development Committee — which worked jointly with the Downtown Lebanon TIF Advisory Board — recommended drafting a RFP that solicited proposals for either residential, commercial or mixed-use projects.

Committee Chairman William Dunn explained that while housing is an important component to economic development, the committee’s purpose is to explore all options to find the maximum benefit.

“The EDC is not pushing for a housing project,” Dunn said. “The EDC is pushing for options. And we are looking for as many options as possible.”

But several councilors stressed that affordable housing needs to be the city’s top priority, not subjected to a competition against property ideas.

Assistant Mayor Clif Below said that leaving all options open equates to “kicking the can down the road” in regard to the housing crisis.

“We know that we need more housing across the lower and middle end of the (income) spectrum, and I see this (property) as an opportunity for the city,” Below told councilors. “The need for affordable housing is as great as it has ever been.”

Grafton County’s median gross rent — $2,081 for a two-bedroom unit — is the highest of any county in the state, according to a new study from public corporation New Hampshire Housing. Rent prices in Grafton County have increased by 82% since 2018, more than twice the statewide average of 36% during that time.

Mulholland noted at the meeting that Lebanon’s rents and home prices are actually higher than the county average.

“The numbers here are more comparable to the city of Boston,” Mulholland told the council.

Councilor George Sykes said the lack of affordable housing options is contributing to the problem of homelessness in Lebanon, citing the long waitlist for subsidized housing.

“We’re trying to get people away from sheltering and into affordable housing, but on that piece we keep falling down,” Sykes said.

The council voted, 5-4, against seeking a broad scope of proposed uses for 20 Spencer St.

Councilors who voted in the majority included Devin Wilkie, Erling Heistad, Karen Zook, Below and Sykes. The majority said they worried that nonprofit housing organizations would not invest the time and money to develop a proposal if the city is not committed to an affordable housing project.

Mayor Tim McNamara and Councilors Chris Simon, Douglas Whittlesey and Karen Liot Hill voted in the minority.

The city previously intended to sell 20 Spencer St. to Ken Braverman, a developer based in Stowe, Vt., for $1.5 million. Braverman had proposed a four-story apartment building with 94 residential units — the majority of which would be rented at market rate — and 4,500 square feet of retail and commercial space.

But in April, Braverman withdrew from the project, saying that it was no longer financially viable due to hiring shortages and inflation.

The City Council will discuss a final draft of the housing RFP at its next meeting at 7 p.m. Wednesday, Sept. 20, in City Hall.

Patrick Adrian may be reached at padrian@vnews.com or 603-727-3216.