‘People are desperate:’ Budget committee encouraged to make bold investments in affordable housing / by Dan Neumann

Activists with Housing Justice Maine call on state lawmakers in 2021 to create affordable housing. | Beacon

Originally published in the Maine Beacon on February 10, 2023

As Maine lawmakers begin to draft a two-year budget, they heard Thursday from housing advocates and industry experts about the sea of Mainers struggling to afford shelter. 

“People are desperate,” Avesta development officer Nate Howes told members of the legislature’s Appropriations and Financial Affairs Committee and Select Committee on Housing before a joint public hearing on Thursday. 

Howes explained that northern New England’s largest nonprofit affordable housing developer received 9,000 applications for the units they advertised last year. That was a 30% increase in applications from what Avesta received in 2021, and double the number they received in 2020, when housing prices began to skyrocket. Forty-three percent of the applications Avesta processed in 2022 were from residents who identified themselves as homeless.

“A recent vacancy in East Bayside received 40 complete applications in less than 24 hours,” Howes added, referring to a housing complex in Portland. “We received 1,000 applications for a recent 52-unit project in South Portland. One of our leasing specialists had to change her phone number because she was getting calls and texts in the middle of the night.”

Housing remains a top priority for lawmakers again this year. The national average home sale price has increased by 35% in less than two years. Forty percent of Maine renters are considered cost-burdened by rent, homelessness has increased and there is still a shortage of about 20,000 affordable housing units in the state.

In response, the Select Committee on Housing was formed this session to consider a host of proposals to study land use, increase housing density, mitigate the impacts of short-term rentals, and provide rental assistance. There is also a proposal to create a public developer that would maintain ownership of the housing it develops, which would be governed by the renters themselves.

Topping the list of housing priorities this session will be funding new affordable housing construction. Gov. Janet Mills’ initial budget proposal, released last month, would allocate $30 million to the Rural Affordable Rental Housing Program and the federal Low-Income Housing Credit Program — two private-public development partnerships overseen by MaineHousing, the state’s housing authority, through which they issue tax subsidies or forgivable loans to entice developers to build affordable units or refurbish old buildings.

The proposal was applauded by several private and nonprofit housing developers at the hearing on Thursday. 

Erik Jorgensen, MaineHousing’s director of government relations, said the $30 million proposed by the governor would build an estimated 250 affordable housing units. That would be on top of 87 other projects currently in the pipeline, he said, funded by the federal government and previous state allocations. 

That’s a step up from the production pace of previous years, when resources only allowed for about 180-220 affordable housing units a year to come online, and around 12 units each year for supportive housing for Maine’s unhoused population.

But Jorgensen told lawmakers that pace may fall off now that the state has spent its COVID relief funds from the federal government.

“While we’ve not yet recorded our figures for 2022, this period will, in all likelihood, be a high-water mark for our agency’s programmatic funding, which has started again to enter a period of contraction as pandemic-era special programs are winding down,” Jorgensen said.

In light of that contraction, some advocates told legislators on Thursday that the $30 million proposed by the governor is not nearly enough to address the overwhelming need for low-cost housing, and they urged lawmakers to up that total.

“While public investment is necessary to alleviate Maine’s affordable housing crisis, $30 million is insufficient to address the shortage of affordable housing,” said Josie Phillips, a budget and tax policy fellow with the Maine Center for Economic Policy.

“Housing insecurity and homelessness — driven by high costs of housing — have been repeatedly shown to endanger personal health, educational outcomes, and financial security,” Phillips continued. “Maine’s State Economist has also identified a lack of affordable housing to be one of the most significant challenges facing the state economy, particularly as it deters younger adults from migrating into the state and offsetting the aging population and declining labor force.”

Several others told lawmakers about the need to fund rental assistance for low-income Mainers. Maine’s Emergency Rental Assistance Program, launched in 2020 with federal relief funds, ended in November and is no longer accepting applications. 

“I believe there is no single action to take that is more important than an improved, expanded, and fully funded rental assistance program,” said Craig Saddlemire, the development organizer for the Raise-Op Housing Cooperative, which operates 15 affordable housing units in Lewiston that are owned and managed by its residents. 

“Historically, only 25% of income-eligible households have been able to receive housing assistance, due to housing assistance programs being severely underfunded,” Saddlemire said. “This means a majority of the people who need housing assistance are facing the constant threat of eviction, homelessness, or foregoing other basic needs because they are burdened by housing costs.”

Maine Equal Justice policy advocate Ann Danforth echoed the need for rental assistance, saying many low-income and unhoused residents can’t afford to rent even a place defined as “affordable.” For example, many of the units built through the federal Low Income Tax Credit are put on the market at 60% of the area median income, which in Portland is a rent of about $1,100 per month.  

“Those most in need still cannot afford a Low Income Tax Credit unit or a Rural Affordable Rental Housing unit if it is not subsidized,” Danforth told lawmakers. “Even if the housing supply outpaces the demand, this will never drive down rental prices enough to be affordable to many of our low-income neighbors.”

Dan Neumann studied journalism at Colorado State University before beginning his career as a community newspaper reporter in Denver. He reported on the Global North’s interventions in Africa, including documentaries on climate change, international asylum policy and U.S. militarization on the continent before returning to his home state of Illinois to teach community journalism on Chicago’s West Side. He now lives in Portland. Dan can be reached at dan@mainebeacon.com.