In the 1950s and ’60s, Maine cities and towns responded to the decline of the textile and shoe industries by forming boards of trades, building the first business parks, and courting new companies from away. In the 1970s and ’80s, they reacted to the advent of regional shopping malls by seeking to overhaul their downtowns, constructing parking garages and offering a variety of tax breaks and grant programs to lure new retailers.
Just as those movements were fueled by the perception of a decline in traditional economic strengths, so at the turn of a new century there’s a budding movement to plan for and encourage new housing – particularly for young people and young families who are still leaving Maine or finding it harder to live in their home town.
The affordable housing crisis, as it’s come to be known, has spread from fast-growing York and Cumberland counties up the coast at least as far as Bar Harbor, and into parts of the interior as well. The stagnation in population growth that was long seen as a function of not enough high-paying jobs turns out to have more than one cause. Even in areas of record low unemployment, businesses are having trouble attracting new workers to the region – in part because housing costs are outpacing even seemingly generous wages.
Municipalities are just now becoming aware of the extent of the problem, according to Beth McPherson, executive director of the Genesis Community Loan Fund in Damariscotta, which makes loans and provides assistance to non-profit groups seeking to promote affordable housing.
“As long as the tax money’s coming in and the budget’s not a problem, most towns don’t see this as a problem,” she said. “But just adding high-priced real estate to the tax base doesn’t always lead to a healthy community. I think a lot of towns are putting their heads in the sand.”
Having young families move out of state, or out of the community in search of cheaper land, impoverishes a community by removing its diversity, emptying its schools, and diminishing its quality of life, McPherson said. “Unless we want Maine to be a string of retirement communities, we have to do something.”
Census figures back up McPherson’s contentions. While the building of single-family residences chugged ahead in the 1990s – much of it the large, high-priced homes favored by seasonal residents and retirees – the construction of rental housing, important to young people starting out, plunged. Mainers have long preferred single-family housing, a reflection of the predominance of small towns and villages rather than large cities. In all, 62,915 single-family units were built in the 1970s – a decade of significant population growth – and homes continued to be built in the 1980s, with 48,672 units, and the 1990s, with 43,421. By contrast, new rental units, which totaled 25,818 in the 1970s and 26,445 in the 1980s, dropped to just 8,356 in the 1990s – less than a third of the previous two decades.
In Portland, the biggest rental market in the state, only 850 new housing units were built during the 1990s, and only a small portion of those were rental – despite a net 1,650 new households. The resulting housing crunch has sent the vacancy rate below 2 percent, and rents have soared. Portland has responded by encouraging new apartment construction – 209 units are now on the drawing board – but officials concede that it may take years to meet the demand.
On Mount Desert Island, communities are banding together in a planning process known as MDI Tomorrow. One of the six critical areas identified by planners is housing, based in part on the observation that people who work on the island are commuting farther and farther to get there. When a Navy facility on the Schoodic peninsula in Winter Harbor closed this year, one of the most popular suggested uses was housing for workers at such fast-growing enterprises as the Jackson Lab – even though it would probably require a bus or ferry system to be feasible. Planners report that one of the problems in building new housing on MDI is that few communities on the island permit the unit densities necessary to make rental housing feasible.
The following survey of five Maine communities is not exhaustive, but does suggest the variety of municipal attitudes toward housing, and how towns and cities can manage the pressures of growth, while making sure that housing opportunities serve to enhance economic development and maintain a mix of ages and incomes in the community.
Bangor was one of the first Maine communities to make housing part of its economic development planning, in part because of what it found when it helped redevelop downtown properties it had acquired earlier in foreclosures.
“Whenever we did a project, the first part to be occupied was always the apartments,” said T.J. Martzial, housing project coordinator for the city. “People wanted to know about what was available even before we got the plans off the drawing board.”
With the exodus of industries and business that began in the 1950s, there were only a few hundred people still living in the central downtown area by the 1980s. With the beginning of a Main Street revival, however, people started moving back. According to a survey last year, there are now 464 housing units downtown in buildings ranging from one to 121 units. “Merchants have seen the difference,” Martzial said. “We’re also seeing downtown rents start to rise.” Some apartments are renting for $900 to $950, unprecedented figures in this area. “A few years ago, who would have thought we’d have waiting lists for downtown apartments?” he said.
While most of the renovations to date have received direct subsidies or tax credits – often necessary to reuse old buildings, which require elevators and expensive modifications to meet building codes – “the subsidy’s not quite as critical as it used to be,” he said. One recent renovation on Main Street that included three apartments was privately financed, and required no public assistance.
Bangor, like a number of Maine cities, lost population in the last census – about 5 percent, or 1,700 people. From what he’s seen recently, Martzial says the situation may be turning around. Lots in outlying sections of the city are selling for $75,000 and up, and that in turn makes redevelopment of the center more feasible.
“This is the anti-sprawl concept at work,” he said. “By making downtown more desirable, we help bring people back. Our plans call for them to live here, not just to visit.”
And unlike some cities, Bangor still has a strong pro-growth consensus, Martzial said. “The school department has room to expand, and we see the benefits of residential growth across the board. Employers always want to know about whether there’s housing available, and we’re still in the position where we want to encourage that.”
In fast-growing towns like Scarborough, which added nearly 4,500 residents in the 1990s expanding the population by 35 percent, the “housing crisis” town government deals with is often keeping up with the number of new homes being built. And like a handful of its southern Maine neighbors, Scarborough has enacted a growth management ordinance that limits new housing to an average of 135 units a year, or 540 over the four-year lifespan of the ordinance.
Yet the growth cap, enacted two years ago, is already generating some concerns, according to Town Manager Ron Owens. “We’re not seeing much built in the $90,000-$100,000 range, which for this area matches the median income. Some families are having a hard time staying in town.”
Scarborough’s dilemma was increased, in some respects, by the proposal for a “Great American Neighborhood” development in the Dunstan section by local builders John and Elliott Chamberlain. The project, which emphasizes clustering housing and retaining open spaces with parks, trails and ballfields, plus small stores and other services, would encourage residents to walk and bike within the development rather than drive. In all, there would be 55,000 square feet of commercial space and 445 housing units on 150 acres, including single-family homes, townhouses, apartments and senior housing.
Owens said many people in Scarborough are intrigued by the proposal, which would provide a neighborhood in a town without true village centers. Yet it would also seem to run up against the growth cap, which allows only half the growth to occur in “new” developments – those approved after the ordinance was enacted – and only 35 of those units within subdivisions.
Even if the town council approves the contract zoning plan necessary for the Dunstan project, the developers could face a serious bottleneck in the cap, which would affect at least the first two years of construction. Yet Owens says that obstacle is not necessarily insuperable. One approach might be to credit the Chamberlains for the open space they intend to buy for $500,000 that compensates for the increased density of their plan. Since that purchase would permanently remove 44 house lots from the town’s developable area, the council could credit them for an equivalent number of new units.
“It’s not cost-effective to build multi-family housing a couple of units at a time. We might need something like this to get this off the ground,” Owens said.
While the plan has critics who wonder how it fits with the idea of limiting growth, it seems to have attracted more supporters among those who believe that Scarborough doesn’t offer a range of new housing. At a recent public hearing, one resident said, “I don’t think it’s a good idea. It’s a great idea. My wife and I plan to move to it if it ever gets built.”
The biggest holdup may be traffic concerns. The project is near the intersection of Route 1 with Broadturn and Payne roads, an awkward point where two heavily traveled streets converge on Route 1 yet with no connection between them. Owens said some short-term improvements may be possible, and the state is expected to submit a long-range plan to improve traffic flow.
As the original site of the affordable housing problem, Portland occupies a pivotal position in how the situation is addressed. The new city manager, Joe Gray, is the former director of planning and urban developer, so he’s had a ringside seat for recent battles between neighborhoods and developers. On one hand, the city has recognized that rents have been increasing at an unsustainable pace, yet the main option to make new construction more feasible – allowing greater densities — is not always popular in the neighborhoods where new projects would be built. Gray pointed out that the recent referendum for a growth moratorium was prompted by the Island View apartment project on Munjoy Hill – a plan that won praise from housing advocates.
Yet the referendum was soundly defeated, and rent control has not gained favor as the answer to the escalation in rental prices. This leaves the city back in the position of finding ways to encourage private investment to ease the housing shortage. The Island View project also illustrates the escalation in rents – a two-bedroom apartment rents for $1,200 at market rates.
Portland’s population was virtually identical in 2000 to what it was in 1990 – a significant achievement among “the older Northeastern cities we’re usually grouped with,” Gray said. It’s not clear yet whether residents are comfortable with the idea of renewed growth. A major test will be this fall, when a new housing plan will be voted on by the city council. It will involve some reduction of the city’s current minimum lot size restrictions – about a quarter-acre in outlying districts, and an eighth-acre closer to the peninsula. Downtown, 12 units per acre – and in rare circumstances up to 22 — are allowed. Without those changes, Gray said, it will be difficult for Portland to meet the demand for housing.
Doing so is more important than many people realize, he said. “The Cianbro project on the waterfront is a good example. Though it’s only for 18 months initially, it provides 800 jobs. If we want to keep that kind of growth in the city, we need housing that workers can afford.”
When Portland discussed the move of a prominent investment group to the city, housing quickly emerged as a key issue. Gray said, “You wouldn’t think that would happen with a New York firm, but these are junior members who don’t necessarily make a lot of money. New employers won’t come unless they know their workers can find a good place to live.”
Spurred by the growth of credit card giant MBNA and other businesses, the number of jobs in Belfast has mushroomed, but population growth has been relatively slight.
“Strong anecdotal evidence suggests that most of the new workers are living outside the city and commuting in,” City Manager Terry St. Peter said. Residents seem fairly comfortable with that trend, but there is increasing interest in providing more apartments and other affordable housing to help those displaced by Belfast’s rising real estate valuation.
One recent apartment complex had “the neighborhood up in arms for awhile,” St. Peter said, but opposition has died away since then. And the city is assisting in another 24-unit project proposed by the Penquis CAP agency that’s specifically designed for low and moderate-income families.
New rental units are needed in part to offset a trend in which some properties were being emptied of tenants so they could be sold or rented as single, larger units, St. Peter said. Despite rents at $800-$1,000 for two-bedroom apartments, the vacancy rate remains low.
There’s a range of opinion across the city which can be characterized by particular groups. “Those who’ve arrived here last usually want to shut the door after them, while those who were born here and remember the chicken and shoe shop days want more jobs and more diversity in town,” St. Peter said. “Then there are those who consider this a charming place to retire, and want as few changes as possible.”
Yet these attitudes are not entirely consistent. “Even from those with a no- or low-growth mindset, there seems to be a recognition that we need more affordable housing. How they reconcile that I’m less sure about.”
The 1990s was a decade of commercial success for Augusta, and the mall site near the civic center filled out with the addition of dozens of new stores. Yet the capital proved less attractive as a place to live, losing some 2,765 of the 21,325 residents it had in 1990. The percentage drop of 13 percent was the largest for any sizable community outside of Aroostook County.
Recognizing the need for a turnaround, City Manager Bill Bridgeo has discussed a plan with the Maine State Housing Authority to offer financial incentives to some of the estimated 2,000 state employees who will come on board in the area over the next five to eight years. The new workers mark the effect of an expected wave of baby boom retirements among the 6,000 state employees now in the area.
The idea would be to recognize the decreased cost for commuting and other travel in drafting mortgage terms. In essence, state workers might be able to buy more house for their money in Augusta than other communities under such a loan program.
While this particular idea is still in the talking stages, Mike Duguay, the city’s economic development director, said Augusta is taking other steps to make it more attractive to new and existing residents.
The maturity of the zoning ordinance – now 20 years old, though Augusta was one of the last cities in Maine to adopt one – is helping instill confidence that new investments will have predictable returns. “The fact that you can build a new office with confidence that you won’t have a junkyard or a chemical factory across the street is very helpful,” Duguay said.
He pointed to the new Riggs Brook growth area – a 1,500-acre tract near the end of the new third bridge which will provide a northern bypass of Western Avenue and downtown – as an example of how zoning can enhance residential neighborhoods. While the land off Route 3 is intended for mixed commercial and residential use, performances standards are much higher than elsewhere, and Duguay thinks that developers will “take advantage of this attractive, undeveloped area” to launch some ambitious projects.
Augusta is also experimenting with programs to enhance the integrity of existing neighborhoods. On the west side just north of Western Avenue – the main commercial street as well as the major cross-town route – the city has launched a $50,000 pilot project with the West Side Neighborhood Association that will examine how to mitigate traffic, enhance parks and green spaces, and provide trails for recreation. The new bypass itself will help by reducing traffic on Western Avenue by an estimated 25 percent, easing the backups that now tempt drivers to cut through residential areas. “Connectivity is great, but there’s such a thing as having too much access to neighborhood streets,” he said.
Other initiatives include redevelopment of the Kennebec River waterfront, increasingly seen as a key asset with the cleanup of the river and removal of the Edwards Dam. This might be a good place to build a missing housing type in the city – the townhouse condominium, which attracts different buyers than detached housing or standard rental units, Duguay said. A showplace for housing efforts is the conversion of the old city hall into 31 assisted living units – a reclamation many people said would never happen.
Bill Bridgeo said that reusing the upper floors of downtown buildings, most likely for residential use, remains a challenge, but one that seems more manageable with continued improvements to Water Street plus the redevelopment, as public space, of the old Edwards Mill site on lower Water Street.
Whether this leads to significant growth in the next census is not yet clear, but Bridgeo said that the housing issue now has the city’s full attention.
Now that housing concerns have gotten on stage – if not yet center stage – they’re not likely to go away anytime soon, said Beth McPherson at the Genesis Fund. To date, only half a dozen of the 85 projects Genesis has funded have had direct municipal involvement, yet more municipalities are beginning to talk about housing issues, she said.
For those concerned about what they should offer, a good place to start is a housing needs assessment, a project that can be funded through a Community Development Block Grant. “Finding out what you have and what you need is the best place to start,” she said.
Funding for implementation of housing assistance – infrastructure improvements and direct help for renovations – is also available through CDBG, up to $400,000 per community.
With the recent economic slowdown, “Now is the time to do some planning,” McPherson says. “We can’t ignore this, because it’s a tremendous problem. The market isn’t going to come close to taking care of it, and towns will need to help.”