🔒News analysis: What the federal housing bill means for Maine

The bipartisan 21st Century ROAD to Housing Act, recently passed by Congress, is being lauded by some as the most significant federal housing legislation in more than three decades. While that technically may be true — Congress has done little to support more housing for years — the real impact the bill will have on housing supply in Maine is considerably less auspicious, according to some experts. “The legislation is a compilation of numerous marginal improvements that as a package represent progress," Greg Payne, senior advisor for housing policy in the Governor’s Office of Policy Innovation and the Future, told Mainebiz. "But it’s not game-changing.”

Support for low-income renters

“There are a few good things in the bill that support the work we’re doing here in Maine, around affordable housing,” including savings for buyers of manufactured homes. Payne said. A change in the rule that requires mobile homes to be stationed on a chassis can save homeowners up to $10,000. "And in addition to a reduction in cost, this opens up design flexibility,” he said, “such as the possibility for stackable homes.” Payne added that the state will be launching by the end of August a new mobile home park infill program that will make available roughly $3 million to help develop more lots in existing licensed parks. A restrictive covenant will ensure lot rents remain affordable. The bill further protects lower-income renters by reforming the USDA Rural Housing Service Program to allow rental assistance to remain with Section 515 properties with low-interest mortgages for another 20 years, even after their mortgages expire. These properties, which include about 7,600 apartments in Maine, were built in the 1960s and 1970s and carry 40- and 50-year mortgages, which have already begun to expire. Laura Mitchell, executive director of the Maine Affordable Housing Coalition, said the change "will help preserve affordable homes, allow nonprofit and mission-driven organizations to acquire aging properties and protect rental assistance that thousands of Maine households depend on.” Another provision raises the cap on how much money banks can invest into Low Income Housing Tax Credit and other "public welfare" programs, from 15% to 20% of their capital and profits, which Payne said should encourage more competition and more investment for low-income housing.

Support for new construction

As for the bill’s impact on facilitating more building, there is no significant funding appropriated. However, there is an easing of some of the duplicative tenets of the environmental review process, which Payne said "is far more complicated than it needs to be and drives developers crazy. “The bill will increase efficiencies to that process," he added. There’s also language in the bill that supports the use of preapproved building plans, mostly for the construction of single-family homes and ADUs, to spare lengthy local approval processes. “The city of Bangor has tried to do this and hasn’t had many takers yet,” Payne noted. “In other parts of the country people have been using them quite a bit.”

Maine funding, workforce needs

“The two big pillars we need here are a significant increase in funding for housing construction, and a larger workforce," Payne said. "The cost of building has gone up significantly, and one of the biggest factors in Maine is the lack of workers in the construction trades.” Another restrictive factor, he noted, is the permitting process at the local and state level. “It sometimes takes far too long and that adds cost," Payne said. “We’re tackling permitting and regulatory reforms here. Zoning and land use reform are the biggest levers we have and we’re pulling them as much as we can," he said. The federal Build America, Buy America Act continues to drive up costs. The law was enacted as part of the 2021 Infrastructure Investment and Jobs Act and mandates that all iron, steel, manufactured products and construction materials used in federally funded infrastructure projects must be produced in the United States. “The delays that has caused are a nightmare,” Payne said. “And has caused costs to go up in the range of 10%.”

Federal action still needed

“There’s a big difference between passing a law and having it executed functionally on the ground,” Payne said of the 21st Century ROAD to Housing Act. “In order to implement the bill’s provisions, we need federal agencies to act efficiently and functionally, and history tells us that that can be a challenge,” he said, adding, “We’ve cut a lot of the federal workforce, which could help implement these changes.” Mitchell said that "implementation is where these opportunities become reality."