Moving to the center | New residential development appears headed back to Maine's cities and larger towns
“Charting the Course” is written by GrowSmart Maine, a Yarmouth nonprofit that promotes and encourages new ways of thinking about Maine’s future.
While planned subdivisions in Maine’s suburbs lie fallow, some of the state’s biggest residential construction projects are happening in and near the state’s traditional downtown areas and Main Streets. Developers, real estate agents and homebuyers are reporting renewed interest in in-town housing, and big projects like the Hathaway Creative Center in Waterville and Saco Island in Saco have been grabbing headlines as marquee downtown development projects.
A recent GrowSmart analysis of U.S. Census Bureau data confirms what we’ve been hearing anecdotally: For most of the past decade, new housing construction has been gravitating to Maine’s traditional “service center communities” — the established towns and cities where most of the state’s jobs and services are based. The trend has important implications for the state’s real estate industry, municipalities and statewide policies that govern infrastructure investment.
The number of building permits in any given city varies dramatically from year to year, depending on a number of factors. To correct for regional variation, we compared the number of housing units built in several Maine cities to the number of housing units built in their surrounding counties.
These comparisons reveal a clear trend: Over the past decade, Maine’s service centers have been attracting an increasing share of new residential construction.
Transportation and taxes
In 1997, 272 units of housing were built in Penobscot County, but only 10 of those were built in the city of Bangor. Through the late 1990s, the vast majority of new homes in Penobscot County were built in outlying towns like Orrington and Hermon.
But since 2005, Bangor has permitted an average of 120 units a year, and the share of Penobscot County housing that’s built inside Bangor’s city limits is now approaching 20%.
Housing construction in Waterville and Augusta has also taken off, and activity in those two cities now accounts for more than 25% of all residential construction in Kennebec County. In southern Maine, new housing in the cities of Portland, South Portland and Westbrook has likewise increased to claim roughly 27% of Cumberland County’s market over the past five years.
These patterns have become especially pronounced in the face of credit and energy crises. While the number of units built in 2008 mostly held steady in the larger towns and cities, new housing construction in suburbs virtually ground to a halt.
We can’t say for certain what’s behind these trends, but we have some good ideas. As Maine’s population ages, more households seem willing to trade in a big backyard for a vibrant in-town neighborhood. Many of Maine’s downtowns and Main Streets have also gone through dramatic transformations in the past decade, so “quality of place” is also a likely factor.
But economic factors may play a bigger role. Even though Maine’s cities generally have higher property tax rates than outlying towns, the differences aren’t as significant as they used to be. Throughout the 1980s and 1990s, as more people moved to towns where the taxes were cheap, those municipalities began to face increasing demands on their limited public services. As their costs of government increased, so did tax rates.
A bigger factor has been the past decade’s extraordinary increases in transportation expenditures. A recent analysis from the Brookings Institution and the Chicago-based Center for Neighborhood Technology indicates that, thanks to lower transportation costs, residents of Portland, South Portland and Westbrook have significantly more disposable income than residents who live elsewhere in Cumberland County, even though city-dwellers pay slightly more for their housing. The cost of a daily 40-mile commute between Standish and Portland is roughly two-thirds the rent for an in-town studio apartment.
The trend continues
These trends are unlikely to reverse anytime soon. Unfortunately, many of Maine’s statewide infrastructure investment policies are still geared towards building new facilities on the outskirts of our communities, instead of reusing or enhancing existing infrastructure in our towns and village centers. The state’s school construction policy is a classic example: Maine spent $200 million on 13 new schools between 1995 and 2005, even though total enrollment declined by 13,000 students in the same time period.
More people living in Maine’s established town centers and cities will help reduce costs of government, improve community vitality, increase Mainers’ disposable income and support Main Street small businesses.
Christian McNeil can be reached at cmcneil@growsmartmaine.org.
Mainebiz web partners
Most Recent
Most Recent
Comments