Tom Martin, HCPC Executive Director

October 18, 2003

Since Hancock County is just beginning to address its housing needs, I’m going to discuss what has been done elsewhere and some of the elements of a successful housing initiative. I hope to accomplish several things in my presentation. First, explain how housing relates to the other topics that we are discussing today and how it affects the county as a whole. Second, discuss what we mean when we talk about affordable housing. Third, discuss elements of a successful housing program. Finally, I wanted to touch upon how we can learn from previous examples.

Relationship of housing to the other topics

Planners traditionally talk about housing markets, the area in which people who work in certain places normally buy or rent their homes. The traditional housing market has expanded territory in recent years. Rather than refer to a “housing market,” some people are now talking about enormous “housing supermarkets.” This does not, however, mean that the housing consumer faces a range of choices as one does in a food supermarket. Rather, it means we must shop far and wide to find housing. I heard a report recently of a builder on MDI who had employees traveling as far away as Howland and Machias. Even at this time of year, one sees a steady morning flow of cars from inland locations to Ellsworth and MDI. The main reason for this is that the cost of housing on the coast is so high. I heard that in September, there were five homes listed on MDI for under $160,000 and seven lots listed for under $100,000.

This has a dramatic impact on Jackson Lab, which is the county’s major employer. While prices are not as high in surrounding coastal communities, the same basic problem exists all along the coast. People are being pushed further away from their jobs. This causes increased commuting traffic. There is therefore a clear link between the cost of housing and transportation.

There is also a link between housing and economic development since high housing costs make it difficult for area employers to retain employees. They are forced to raise wages and deal with employee problems that result from long commutes. Health is also affected. The more time people spend commuting, the less time they have for exercise.

The land use impact is that more development is taking place away from the coast in towns that are ill-equipped to handle it. The results include higher property taxes and more investments in schools and other town facilities. This is at a time when some coastal towns facing the closure of their schools due to declining enrollment.

Given the distances that people commute, this is clearly a county-wide issue. The lack of affordable housing in one town means that other towns will pick up the slack. We all feel the impacts of traffic congestion and the erosion of the sense of community that results from long commutes. For example, people who live far from their jobs have less time to serve in the fire department and volunteer for other town functions.

What do we mean by affordable housing?

Affordable housing can be defined in many ways. Generally speaking, it means a household being able to find rental or purchase opportunities that cost no more than 30 percent of household income. Any community is going to have a variety of housing needs. In most cases, it is not realistic for local communities to address the needs of very low income persons on their own. Such households usually require major assistance to make rent payments or must live in heavily subsidized units, which require a major investment of funds beyond the reach of most municipal budgets.

The bigger challenge is to find options for those who earn more than the income thresholds that qualify them for assistance programs, but who cannot afford to enter the housing market. In much of Hancock County, this is households whose income is in the $30,000 to $50,000 range. This includes many people who work at local hospitals, the schools and major employers.

Elements of success

It is possible to create home purchase opportunities for first-time home buyers. Normally, this involves finding ways to reduce the cost of land to below market prices and selling these lots to households with certain deed restrictions so that they won’t be resold at market prices. This has been done at the West Eden Meadows development in Bar Harbor, where high quality first-time home purchase opportunities have been created and it certainly can be done elsewhere. Here are some the steps that need to be taken.

1. Strong citizen outreach

It is important to have the community behind any venture. There is often fear that building affordable housing will have a negative impact on the tax base, create social problems and be incompatible with the character of the community. The risk of NIMBY or BANANA (build absolutely nothing near any body anywhere at any time) is always there.

There needs to be an understanding of the importance of affordable housing and how the impacts of any new venture will be managed. Slide shows of successful projects and testimony from employers and others who have benefited from endeavors are helpful. Wording is also important. It is sometimes best to use the term workforce housing rather than affordable housing. Neighborhoods that mix market rate and subsidized units are best.

2. Find land and/or buildings

The cost of land is one of the major factors inhibiting the creation of work force housing. Residents may want to bequest some land to a housing land trust or sell it at a reduced price. A developer may be convinced to donate some land in exchange for other concessions. Fund raising drives can be very helpful.

It may also be possible to move a house from an existing lot to a new lot. Someone may buy a lot with an older home on it and plan to tear it down to put up a much larger building. There may also be larger, vacant buildings such as old schools or commercial structures that can be converted in multi-family units.

3. Have a sound management team

There is no need to reinvent the wheel. You can learn from the experiences of others. You need someone at the helm that knows the technical resources available and the various pitfalls to avoid. The Maine State Housing Authority, Washington Hancock Community Agency, the Hancock County Planning Commission and the Maine Affordable Housing Network are just some of the resources that are available. Successful efforts require a partnership among many agencies. You need someone who can help you make these necessary links. Remember there are state grants available to initiate affordable housing strategies.

4. Perseverance

Expect long delays and frustration. Funding sources change and you can’t solve all of your housing needs. The reward is watching those people move into their first home.

What we have learned

Any effort to create work force housing in a tight housing market has some pitfalls. There is always the temptation for a developer to find a loophole in affordable housing venture to sell units at a much higher price. While the West Eden Meadows project restricted the profit someone could gain from selling the land, it did not limit the profit on the house. One option might be to limit the value of the homes that are built. This may get dicey since you want to have a quality neighborhood.

Another lesson is that individual efforts, while great for tapping local initiative, are a drop in the pocket in addressing the broader regional need. Since housing is a county-wide need, there needs to be more consensus on how to address the need county-wide and assure coordination of efforts. Given the scale of the need, no one town can really address the problem effectively. Also, no one town wants to have a disproportionate share of the region’s lower cost housing.