All posts in “Affordable Housing”

HR&A Advisors conducts novel report investigating Maine’s housing production needs

 

 

In partnership with MaineHousing, the Department of Economic and Community Development, the Governor’s Office for Policy Innovation and Future, and a wide group of technical stakeholders, HR&A Advisors conducted a study that investigates the relationship between Maine’s housing production, population change, and labor force needs to help the State and local communities understand the scale of housing production and reinvestment needs across the state. This Study is the first of its kind for the State of Maine and one of the first studies nationally to measure this need specifically in alignment with the State’s economic and housing goals: namely, to have enough homes overall to support broad affordability and availability and to have enough homes in the right places at the right price point to support the workforce necessary to sustain and grow Maine’s economy.

 

This study is considered a first step in addressing Maine’s Housing crisis by building a shared understanding of the number of homes required to establish a foundation for widespread affordability and accessibility. This understanding forms the groundwork for municipalities and communities to understand the housing that is needed and the factors influencing Maine’s housing market as they develop tailored policies and local strategies to address the crisis in their community.  

 

 

Report Executive Summary Preview 

 

In response to a national housing crisis accelerated by the Covid-19 pandemic, policy makers are increasingly asking, how many and what kind of homes are needed to meet the needs of our constituents and improve affordability? The scale and nature of housing challenges varies significantly across regions and places but is driven by a primary underlying cause: housing production dropped precipitously after the Great Recession, leading to a nationwide undersupply of homes, especially at low and moderate income price points. These trends were exacerbated by the pandemic through materials and labor shortages just as some places—Maine in particular—experienced a sudden influx of residents due to an increase in remote workers seeking a higher quality of life and an increase in international immigration. What was once primarily a problem for coastal cities has become a national one; almost every county in America now has significant rates of renter cost burden, among other housing challenges (Figure 1).  

 

 

 

While Maine has historically had a relatively affordable homeownership market, this changed in the years leading up to the pandemic and has worsened since 2020 as housing production has lagged population and job growth. Maine is also faced with an aging housing stock, leading more of the state’s existing homes to sit vacant in need of reinvestment. These trends have led to a range of housing challenges for Mainers, including reduced housing quality, limited options to age in place, increased homelessness, and rising housing costs. All these issues are important to study further. However, at the most basic level, aligning housing production with population and economic growth is the foundation of a healthy housing market that offers quality homes at a price affordable to residents. The first step is to understand how many homes are needed to support broad affordability and availability and to support the labor force needed to sustain and grow Maine’s economy, which lays the foundation to adopt policies to create those homes. 

 

Figure 2: Setting Housing Production & Reinvestment Targets

 

 

 

Click here to keep reading the full report. 

 

Related articles: 

Maine has made substantial investments in housing but still can’t keep up with demand (News From The States) 

Maine needs at least 84,000 new homes within seven years, study says (Maine Public Radio) 

Housing crisis worse than ever: New study calls for 80,000+ new homes in Maine (WGME) 

Report: Maine needs to nearly double housing production (Bangor Daily News)

Housing report says Maine needs to build more, fast (Portland Press) 

Gov. Mills celebrates success of mixed-income South Portland building amid housing shortage (Maine Morning Star)

 

 

A Simple Housing Fix for Wake County: Buy the Building, Cap the Rent

 

This opinion piece by Phillip Kash was originally published in INDY Week.

 

Change is a natural phenomenon in any neighborhood – families move in and out, businesses come and go, new immigrant groups bring different languages, cultures, and cuisines. When rents begin to grow faster than the incomes of residents, however, the resulting economic pressure can force people from their homes before they are ready to leave. The result is displacement that harms individuals, families, schools, and communities.

 

Displacement, sometimes called gentrification, is primarily driven by affordability, the difference between the cost of housing and a household’s income. As rents rise far faster than incomes, long-time residents are forced to leave and are replaced by higher-income newcomers.

 

In North Carolina, unprecedented population growth and limited housing development over the past decade has eroded housing affordability.

 

The most powerful tools to prevent displacement require systemic changes to the housing market – building more housing in desirable areas, dedicating more public funding, and adopting legislation that balances tenant and property owner interests. Even in an optimistic scenario, these reforms will take years to adopt and decades to create a healthy, equitable housing system.

 

Wake County is one of a small handful of local governments around the country that are taking on a more direct solution to affordability: buying existing apartment buildings and imposing limits on future rent increases.

 

The benefits are myriad – the purchases can be targeted to neighborhoods facing displacement pressure, limited public or grant capital can be leveraged to create far more affordability, and, most importantly, the impact of these policies is immediate. Current residents can stay in their homes with the confidence that their rent will only rise in relation to income.

 

This year, Wake County has established its own loan fund to purchase existing apartment buildings, preserve their affordability and prevent the displacement of current tenants. With an investment of $10.5 million, the county is leveraging over $40 million from banks and the City of Raleigh, and is expected to preserve over 1,000 affordable homes in the next two years.

 

Buying apartment buildings is the most effective tool available to Wake County – and potentially hundreds of other counties and municipalities nationwide – to protect residents from rapidly rising rents and forced displacement.

 

Amazon has already taken up this strategy as a corporate stakeholder. The company’s Housing Equity Fund was created to preserve affordable homes in communities where Amazon has a significant employee base. Part of its $2 billion commitment to preserve or create 20,000 affordable homes, in less than 21 months since launch, the fund has committed financing for the purchase of more than 20 existing apartment buildings, representing nearly 5,000 rental homes.

 

In cities like Arlington, VA and Bellevue, WA this represents a 20%+ increase in the number of long-term affordable homes. Rents in these apartments will now remain permanently affordable, rising only as an area’s median income rises. More than half of those investments have gone to minority-led developers and thousands of those units have easy access to public transit.

 

Amazon’s story in Seattle and Arlington is one that can be replicated across the country – and local governments like Wake County can take action without the support of a major private backer like Amazon.

 

Housing affordability and displacement require solutions that provide immediate relief to give time for longer-term solutions that rely on grinding zoning fights and policy reform. Stakeholders with financial means, both public and private, can have a near-immediate impact by buying and preserving affordable housing options.

 

Photo: Unsplash