Addressing Housing Issues by Picking the Right Tools

Many communities in Maine are faced with challenges related to housing supply. In urban centers like Portland, rents and sales prices are often higher than the median household can afford. In rural areas, rents may be lower but incomes are similarly lower. Suburbs often have the largest challenge, in that the housing stock is designed for the traditional family – but priced based on two working adults paying for the mortgage. Rentals and more affordable homeownership opportunities are hard to find in many Maine communities.

Housing affordability has become a major issue nationally, and that has not spared Maine. States like California, Oregon, and even Massachusetts are revisiting the long-dismissed idea of rent control for stabilization. New Hampshire has legalized accessory dwelling units state-wide. In fact, a recent New Yorker article by Nikil Saval described housing as a “chance at redemption” after the planners’ sins of urban renewal and exclusionary zoning.

Safe, affordable housing for all can be a challenging goal to achieve, yet there are certainly things that planners and community leaders can do to work towards achieving the goal. There is a set of national best practices that have been widely used. While not all of them work in every community, they serve as a “toolbox” of sorts, that can be picked from and customized to the needs and desires of each place.

None of these tools, by themselves, will solve the housing problem. However, by harnessing a number of them, municipalities and regions can help make the situation better. In the New Yorker, Saval dismisses inclusionary zoning, for example, as a “meager” remedy, and similarly calls housing production ineffective due to market segmentation. However, through a holistic approach to housing issues, considering all “tools” as options, planners can make a difference. Doing something is part of our jobs!

An important first step is to figure out what you need. Some communities need more low-income affordable housing. Others need more market rate homes. Others may need more smaller, starter homes for families. A little time or money spent on a housing needs assessment or a good housing chapter in your Comprehensive Plan is well worth it before you start throwing tools in to the “toolbox”.

Once you are ready, what tools are in that toolbox? Here are a few to consider:

• Zoning Amendments and Density Bonuses: Your community can choose places where the infrastructure already exists to support housing development and proactively change the zoning and other rules to allow for that growth. If the political will isn’t there to increase allowed densities generally in those areas, look to density bonuses based on providing a certain amount of affordable housing.
• Accessory Dwelling Units: Similarly, communities should explore whether to follow New Hampshire’s example and allow accessory dwelling units on all single-family homes by right.
• Municipal Land Sales: Communities often own land they don’t need any more. Providing that land to developers of workforce or affordable housing can help make the housing feasible, especially if you provide it at below-market prices.
• Community Land Trusts: Local non-profit land trusts are organizations that retain ownership of land and allow homes to be built on it. By owning the land, the Land Trust can make sure the homes stay affordable.
• Housing Trusts: Just as Land Trusts use land as a tool, Housing Trusts use money. Local housing trusts can be repositories for funds to support affordable housing consistent with local needs. Funding for housing trusts can come from sales of surplus or tax-acquired properties, allocation of unexpended fund balances at the end of the fiscal year, or other tools such as the fee-in-lieu option in inclusionary zoning ordinances.
• Inclusionary Zoning: Inclusionary zoning is a common tool in many parts of the country as a way of leveraging market rate development to produce affordable housing. In brief, it requires that any new housing development include a certain percentage that is affordable at below-market rates. Typically, that amount is 10 or 15 percent, and only applies to development or subdivisions over a certain size, such as 10 houses. It’s important to set that percentage at an amount that produces needed units, but also doesn’t have the effect of reducing overall housing production. It’s important to document why this tool is necessary, through a study or part of an overall housing plan that explains why market-rate housing production justifies requiring affordable units.
• Affordable Housing Tax Increment Finance (TIF) Districts: Maine TIF law allows for creation of Affordable Housing TIF districts, where a percentage of the taxes generated can be returned to the developer to help operate affordable housing. Districts can be one property or a whole area, as long as a portion of the units in the district are affordable at certain levels. This tool has been used in over 25 projects throughout the state since its passage 15 years ago, from North Berwick to Machias.

Through mixing and matching these tools, planners can help make a difference in Maine’s housing needs. Work with your community to explore these options and figure out which ones might make sense in your specific situation. For example, Cape Elizabeth has had an inclusionary development ordinance for many years. Portland, on the other hand, uses many of these tools. It’s not just your “chance at redemption,” it’s good planning!