National housing researcher Alex Horowitz from the PEW Charitable Trusts told an audience at a recent Portland Regional Chamber Eggs & Issues forum that inventory in Maine is lower than almost anywhere across the country.
“Inventory has essentially collapsed in Maine,” he said. “There’s not enough anywhere, but candidly, it’s worse here than in the U.S. overall.”
The March 12 discussion with Horowitz and Greg Payne from the Governor’s Office of Policy Innovation and the Future highlighted what’s driving Maine’s housing shortage and what approaches are helping to turn the tide.
Horowitz said the shortage is exacerbated by the fact that Maine has one of the smallest average household sizes in the U.S.; 71% of households are occupied by just one or two people.
Over the past few years, developers in Maine have been adding smaller units, while three- and four-bedroom dwellings are far less common.
Low-income households are hurt the most in a housing shortage, Horowitz said. “Low income households are now spending more than 50% of their income on rent,” which contributes to homelessness.
Call for coordinated action
In Houston and Minneapolis, reducing regulations on minimum lot sizes and easing permitting processes have been instrumental in driving more housing construction.
Allowing apartments to be built on commercially zoned land has also spurred development, Horowitz noted.
“All of these cities have automatically allowed apartment buildings everywhere, ” he said.
Noting that housing markets are regional, he added that “no one locality can solve it on their own. Only coordinated state action makes the difference.”
Tackling the problem
Payne listed several policy initiatives recently enacted or under review in Augusta to address Maine’s housing shortage, noting strong bipartisan support.
He cited LD 2003 and LD 1829, which mandate municipal zoning reforms to allow for greater density and encourage the building of accessory dwelling units.
Payne lauded Portland’s recent ordinance revisions known as ReCode as an example of what other towns should be doing, though he added that the city’s inclusionary zoning ordinance “needs some tweaking.”
Regarding long delays in permitting with the Department of Environmental Protection, Payne said the agency has adopted a new third-party review process that enables more “permitting by rule” — to speed approvals.
In addition, the state Redevelopment Land Bank Authority is working to get surplus land in the hands of developers, Payne noted.
Other initiatives are focused on encouraging more manufactured housing and more investments in affordable housing programs.
“Subsidies alone won’t get us out of this crisis,” Payne warned, adding that Maine needs more bond funding for the infrastructure that communities need to create housing: sewer, water and roads.
‘Meet the moment’
Payne said the workforce shortage is the main reason construction costs have risen, but sees a bright spot in climate migration, which is bringing more people to the state.
“If we can continue to find ways to reduce barriers, if we can meet the moment, we can drive Maine’s economy forward,” he said.
Quincy Hentzel, president and CEO of the Portland Regional Chamber of Commerce, who moderated the discussion, added, “We’re not going to stop talking about housing until we have enough for the people who want to live here and for the people we need to work here.”
