File Photo / Tim Greenway
Rebecca Hatfield, president and CEO of Avesta Housing
Updated: May 2, 2022
Real Estate/Construction/Design
The Maine Housing Crunch: Demand for affordable housing continues to grow
Photo / Tim Greenway
Amy Cullen, vice president and project partner of Szanton Co., near the construction site of Milliken Heights in Old Orchard Beach. She says the need for affordable housing existed before the pandemic, but is now finally getting attention.
By Jessica Hall
The need for affordable housing has never been greater in the state, with increased applications for limited spots.
Now for the first time there could be the political and federal pandemic funding to help make small gains, advocates say.
“All of us in affordable housing have been jumping up and down and screaming and waving our hands saying there’s a problem for years. It’s like watching a car crash happening,” says Amy Cullen, vice president and project partner for the Szanton Co. “It feels like people are starting to hear us. The pandemic really brought it into focus. Lawmakers are finally paying attention.”
An amended version of the state’s affordable housing bill, LD 2003, passed, requiring towns to allow accessory dwelling units and duplexes wherever single-family homes are allowed. The bill also offers municipalities the grants and technical assistance needed to review their land-use rules, which smaller towns have said they couldn’t afford on their own.
“The issue of affordable housing and its importance has never been so in the forefront of everyone’s minds,” says Daniel Brennan, director of MaineHousing.
Still, despite these advancements, the issue of affordable housing is dire, advocates say.
“We need housing for those aging in place, housing for the homeless, refugee housing — we need it all,” Cullen said.
Maine has several unique challenges given its rural areas and old housing stock. Add to that the pandemic, rising labor and construction costs, as well as limited housing availability, and the situation gets worse. Throw in some “not in my backyard” affordable housing opponents, and the potential looming threat of a recession, and you have a recipe for disaster.
While a recession and a rise in interest rates could ease the pressure on the current housing bubble, these economic issues could make the financially vulnerable population more at risk for housing insecurity.
“Despite producing more housing than ever, more people are more vulnerable than ever and we need more options. The gap is getting wider. There are more people who need it and we can’t build it fast enough,” says Rebecca Hatfield, senior vice president of real estate at Avesta Housing.
“COVID led to a decline in people’s ability to afford housing. Any downturns in the economy would hurt. People at the lowest income levels are already unstable.”
In 2021, MaineHousing financed more than 520 units of new housing, marking the highest level ever, Brennan says. Its current pipeline of projects being underwritten or under construction includes 52 projects and more than 2,100 units.
“It’s the single largest pipeline in my history at MaineHousing and it’s still not enough to solve the problem,” Brennan says.
“The fundamental change in investment into affordable housing needs to stay at these levels for 10 more years, at least. When developers have confidence that the dollars are going to be there, they will follow through. My fear is that resources dry up.
“Affordable housing needs to be looked at not just as a government sector issue. Every municipality and person needs to get involved. It’s fundamental. Everyone needs a home that they can call their own.”
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