Years of political change and public funding have produced more housing in Portland, but rents and house prices remain unaffordable for about half of the city’s residents.
A new report from the city shows that most new construction approved in the past five years is for low-income residents or for those who can afford high-end rental apartments and condominiums.
What is not being built is housing for the “missing middle” – young families looking for their first home or rental apartments for low-wage workers in the major restaurant, city administration and retail.
“Housing is the greatest asset of most families, and that asset is increasingly unattainable for most people here,” said General Counsel Jill Duson, who chairs the city council’s housing subcommittee. .
“It’s a vicious circle,” she added. “This report is not a declaration of victory; it’s an assessment of where we are in a very long race.
Over the past six years, the planning council has approved 2,300 new homes. This represents approximately 383 units per year, 100 more per year than the target set in the city’s 2017 comprehensive plan.
But more than half of those homes are market-price condominiums or apartments, according to the report. The median sale price for condos was $325,000 this year, broker says Home connection in Maine. Less than a quarter are subsidized and low-income housing.
New housing construction is also lagging behind. Less than half of the homes approved since 2014 are complete, according to the city. Only 45 new units were created in 2018, and none were completed as of August this year.
A delay between city approval and construction is an expected part of the construction cycle, said Mary Davis, the city’s director of housing.
“We recognize that it takes time; the planning council process is still in its infancy,” she said.
“I still see it as a positive. People are always ready to consider the possibility of building housing and setting up financing,” she added. “The more projects that are approved, the more that will be built.”
This is the second biennial report on the housing situation in Portland. In recent years, municipal policy has focused on a housing crisis, including rents and house prices that are too expensive for many.
The median household income in Portland is about $51,800 a year, nearly half of what is needed to pay the median home price of $316,000. Nearly half of the city’s renters spend about a third or more of their income on housing, a standard benchmark for affordability.
Rents have leveled off in recent years, according to a 2018 city survey. The median rent for a two-bedroom apartment in Portland was around $1,380 last year, but it’s more expensive in popular neighborhoods like the East and West Ends.
According to the new report, the housing burden falls the most on clerical, sales and restaurant workers, the city’s three largest employment blocks and some of Portland’s lowest-paying positions.
City officials have made policy changes to encourage new housing construction. These changes include requiring new developments to build a certain number of housing units for labor housing, changing zoning rules to stimulate housing construction, imposing restrictions on short-term rentals and project financing with tax breaks, federal grants and the city’s housing trust fund.
Low-income housing generally refers to apartments and houses built with government subsidies and reserved for poor families and individuals who meet income standards. Affordable housing, on the other hand, means that costs do not exceed 30% of household income.
” There is no miracle solution ; there’s not one specific thing that’s going to fix the housing issues that we have,” Davis said. “We are trying to solve it from different avenues.”
Portland made all the right housing policy decisions, said Greg Payne, director of the Maine Affordable Housing Coalition and executive at Avesta, a low-income housing development company.
But officials face a lingering problem with booming cities in the United States and abroad, Payne said — base salaries haven’t kept pace with soaring housing costs. Rents in the United States increased by 13% between 2001 and 2018, while inflation-adjusted median wages rose only half a percent in the same time, according to the Center for Budget and Policy Priorities.
The report “clearly indicates a city doing its best to look under every rock and nook and cranny to solve problems,” he said.
“I think there is this labor issue,” he added. “Just the fact that the jobs available to people aren’t paying enough to pay the rents.”
Modest increases in Portland’s housing inventory and complicated policy changes aren’t enough for people who have nowhere to live, said Jessica Falero, co-founder of the People’s Housing Coalition.
Falero understands there are limits to what city politics can accomplish, but thinks the issue isn’t being taken seriously enough. Portland’s homeless resources are overstretched and the area is facing a surge of homeless youth, Falero said.
“I am honestly appalled at the lack of urgency people have with the lack of affordable housing in Portland,” she said.
The city should engage more with people who want to provide affordable housing and find creative solutions, not focus on the barriers to creating more housing, Falero added.
“If the city council doesn’t move and realize the urgency that is here now, we’re going to have more young homeless people, more people on the streets begging. It will get worse,” she said.
MAKE THE NUMBERS WORK
Developers aren’t always looking to build luxury homes, but that’s often the only way to finance new construction without government subsidies.
This is especially true in recent years, as a severe shortage of skilled labor in Maine has caused construction costs to skyrocket.
“The first thing developers are trying to do is build workforce housing,” said Brit Vitalius, residential real estate broker and president of the Southern Maine Landlord Association.
“When that fails, what they have to choose are high-end condos or rentals just to make the numbers work,” sometimes just to prove there will be enough returns to get a bank loan, a- he declared.
Developers are seeking engagement with the city government, in the form of tax breaks or other incentives, to complete workforce housing projects, Vitalius added.
The report makes no conclusions or policy recommendations, but Councilor Duson favors a plan to make city-owned land available for housing development.
“What’s on the list for the last year is to develop a project for the city to provide city-owned land at virtually nothing or very low cost to encourage the development of affordable and mixed-income housing,” said she declared.
“These may not be the units that offer the highest economic return, but a real boost for housing in the city.”
Arts advocate Andrew Graham aims to address housing and affordability challenges