Development program that's often last link before homelessness seeks proposals

A closeup of a row of clapboard three-story houses in Augusta Maine

Photo / Maureen Milliken MaineHousing is looking to up the inventory of supportive housing for extremely low-income Mainers, with an RFP that's due Oct. 15.

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By Maureen Milliken

Where are the high-opportunity areas for the Supportive Housing Program?
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MaineHousing is looking for developers to build or rehabilitate housing — in small developments — for extremely low-income households in a program supported by $3.4 million from the National Housing Trust Fund.

The housing generated by the state housing authority's Supportive Housing Program is often the last link between a roof over their heads and homelessness for people who make 30% or less of the state's annual median income, many of whom also need support that goes beyond financial.

"This program is very important to us," said Dan Brennan, director of MaineHousing. "And it's an area I'm particularly fond of."

The National Housing Trust Fund, established in 2008, has helped fund supportive housing developed by smaller nonprofits. But over the past decade, development has dropped off as nonprofits have struggled financially, Brennan said. Recent changes, though, to National Housing Trust Fund funding have increased its resources.

Brennan said that Maine is now trying to build capacity with the supportive rental housing program.

Projects in this year's round can be awarded a maximum $900,000 and total development costs can't exceed $275,000 a unit. Points are awarded for projects in high-opportunity areas — those that have above access to health care, services, economic activity and quality education. (See sidebar.)

Development entities that are eligible include nonprofits, housing authorities, tribal housing entities, municipalities and successful low-income housing tax credit applicants. Eligible uses are acquisition and rehabilitation of existing rental housing units, adaptive re-use of existing buildings for rental housing and new construction of rental housing units. The deadline for a pre-application is Oct. 15, and the final deadline is Dec. 17.

A very large stone building the former Augusta Mental Health Instute built in the early 1800s

Photo / Maureen Milliken

The Stone Building at the former Augusta Mental Health Institute. The state mental hospital closed for good in 2004 after a 1988 lawsuit spurred a new focus on community-centered care in Maine.

'This isn't anything new'

The program is about small developments and geared toward nonprofit developers, but also plays an important role in keeping those on the edge of homelessness with a roof over their heads. Brennan said it speaks directly to the mission of the 51-year-old state housing authority.

"This isn't anything new, it's the type of housing we've been financing for 25 years," Brennan said.

Studies have shown the cost of supporting residents who need services drops dramatically if they are in permanent housing. A 2009 study of Portland's homeless and newly housed population showed a 54% drop in mental health care costs and 46% drop in overall health care costs between those who had no housing and those who had permanent housing.

The positives of providing housing for extremely low-income and vulnerable people are well known. On the other hand, finding a way to do it has gone through many iterations since the 1990s, when the state turned away from incarcerating those who are mentally ill or needed other support at the Augusta Mental Health Institute.

A new focus on community-based housing emerged after a 1989 lawsuit surrounding care at AMHI resulted in a 1990 consent degree that stressed community support and care and began closing down the sprawling hospital, replacing it with the much smaller Riverview Psychiatric Center.

Over the years of both federal and state budget crises, political changes and more, supportive housing programs evolved from those paid for by the state and federal governments to ones developed by nonprofits.The National Housing Trust Fund was created in 2008, designed to provide financial support for nonprofits developing such housing.

A modern building that says MaineHousing on it with a sign in front that says Mainehousing main entrance

Photo / Maureen Milliken

MaineHousing 26 Edison Drive Augusta

Doing well in a small development

According to Corporation for Supportive Housing, Maine needs 3351 units of supportive housing.

Brennan said the $3.4 million RFP is for housing for those who can live on their own, but need to be near support services and can't afford even standard low-income housing. The housing is for those who make 30% or less of Maine's annual median income of $51,875, which would be $15,562.

"There are people who may not do well in a 30-unit apartment complex, but may be good in a five or six-unit one," Brennan said.

While there used to be several smaller nonprofits that did this type of development, nonprofit financial struggles in recent years have taken a toll. "We're finding that a lot are out of business," Brennan said.

Brennan said a more likely model now is that a nonprofit — a church, shelter or soup kitchen, or a municipality — would partner with a developer on such housing.

"The issue is that developing a piece of real estate is a separate dynamic from being a social service agency," he said. A homeless shelter may be focused on finding homes for those who stay there, but not being a property owner and landlord.

Building capacity may involve developers looking at ways to take part. For instance, a developer working on a larger low-income housing tax credit project may also look to partner with a nonprofit on a five or six-unit supportive development.

"It's totally mission-based," he said. "There's not a lot of money in it."

Maine isn't the only state looking to build capacity. New Hampshire late last year began its first Supportive Housing Institute, a program of the Corporation for Supportive Housing that included a weeklong charette. In January, 20 nonprofits were picked to take part in training on how to develop supportive housing.

A study in that state by Applied Economic Research, of Laconia, N.H., determined need could be as high as 30,000 units. “This is not a problem you solve,” said Russ Thibeault of Applied Economic Research. “It’s a problem you address. There’s no one solution.”

While no such program is taking place in Maine, Brennan said there's a similar need to build capacity. "There is just, in general, a huge demand to create housing in Maine," he said. "And this type of housing is included in that."

High-opportunity areas

Points are awarded for proposed projects in high-opportunity areas — those that have above access to health care, services, economic activity and quality education.

MaineHousing lists the following cities and towns and high opportunity areas:

Arundel, Auburn, Augusta, Bangor, Bar Harbor, Bar Harbor, Bath, Belfast, Benton, Biddeford, Blue Hill, Boothbay, Bowdoin, Bowdoinham, Brewer, Bristol, Brunswick, Buxton;

Camden, Cape Elizabeth, Durham, Eddington, Eliot, Ellsworth, Falmouth, Farmington, Farmingdale, Fort Kent, Freeport, Fryeburg, Glenburn, Gorham, Gray, Greene;

Hallowell, Hampden, Hancock, Harpsell, Hermon, Lebanon, Lewiston, Lisbon, Litchfield, Lyman, Manchester, Mapleton, Mechanic Falls, Minot;

Naples, New Gloucester, North Berwick, Norway, Oakland, Old Orchard Beach, Old Town, Orrington, Phippsburg, Rockport;

Sabattus, Saco, Sanford, Scarborough , Sidney, South Portland, Standish, Thomaston, Topsham, Turner, Union, Vassalboro, Veazie, Waterville, Wells, West Bath, West Gardiner, Westbrook.