CLAREMONT — Valley Regional Hospital’s proposal to renovate a four-story building on the hospital campus as housing for visiting nurses and other workers took a step forward this week when the Planning Board granted the hospital a waiver of site plan approval for the renovations.

The renovation aims to help address a recruiting roadblock: the region’s severe housing shortage. The hospital has found it difficult to hire nurses and recruit staff because prospective employees cannot find a suitable place to live.

Bids for the $1.2 million project, partially funded by Northern Borders Regional Commission, are due later this month, Alan Owens, Valley Regional’s senior director of facilities and support services, said Tuesday. Hospital officials hope the project can be completed by the end of the year, Owens said.

The hospital will reconfigure the four-story building at 4 Dunning St. to include two apartments each on the second and third floors, with a dormitory-style setup on the fourth floor with four bedrooms and a shared kitchen facility, according to the application on file in the Planning and Development Department.

The building was constructed in the early 1900s and it was originally a dormitory for nursing students when there was a nursing school at the hospital.

Because no changes are proposed for parking or the building’s exterior, City Planner Christina Warner said in a memorandum to the Planning Board, which reviewed the waiver request at a meeting on Monday, that the interior alterations won’t change the current site plan and therefore that plan should “suffice for purposes of this renovation.” The site plan is for the building constructed in the 1990s that is attached to the brick building and is home to Associates in Medicine, a primary care provider affiliated with the hospital.

Meanwhile, plans for a new medical office building across from the hospital’s main entrance on Elm Street are expected to begin moving forward following last week’s approval by the New Hampshire Attorney General’s Office of a plan for Valley Regional to join the Dartmouth Health system. Merrimack Superior Court also has approved the agreement. Now the boards of directors for each entity need to conduct due diligence before the anticipated closing in July.

As part of the agreement, aimed at mitigating effects of the integration on competition for health care services in the region, Dartmouth Health agreed to maintain essential services at Valley Regional for at least a decade and to fund the planned 23,800-square-foot medical office building on the hospital’s campus.

The new building, with an estimated price tag of $20 million, will be a modern space that would better accommodate needs for electrical power and technology, Owens said last year.

The site plan shows 35 exam rooms, orthopedics, an X-ray area, common space and meeting rooms all designed to provide more space for patients and staff. When finished, all primary care would move to the new space. Presently primary care is in three different locations.

Although the Planning Board approved the site plan for the office building last June, there is still a lot of work to be done before Valley Regional can break ground, Owens said Tuesday.

“We know the building is going to happen, but as far as the timeline, we don’t know that yet,” Owens said.

Owens said he expects in the coming months Valley Regional officials will have several meetings with Dartmouth Health, while at the same time construction documents will be completed. It will likely be at least a year before groundbreaking, and the construction period is expected to be about 18 months, he said.

The integration agreement also requires that DH establish an addiction treatment center at Valley Regional and to operate it for at least 10 years.

It also requires that DH, the state’s largest private employer, pay $2 million into the Health Care Consumer Protection Trust Fund, which the Legislature created last year to help monitor the health care market, inform policy and improve price transparency.

Patrick O’Grady can be reached at pogclmt@gmail.com.