Housing
This section of the BDN aims to help readers understand Maine’s housing crisis, the volatile real estate market and the public policy behind them. Read more Housing coverage here.
The midcoast city of Rockland is the first community in Maine to float a local bond that would support the construction of affordable and workforce housing around the city.
Following a recommendation from the city’s housing taskforce — and with the endorsement of the mayor and city manager — the City Council will vote Monday on whether to put the bond ordinance on its June municipal ballot. The bond would seek $10 million to finance capital projects that would provide sorely needed housing in a city strapped for options.
“This allows the cost of building new housing in Rockland to be more financially viable than anywhere else in the state,” said Councilor Adam Lachman, who will be voting in support of the proposal Monday.
The bond proposal is the latest in a slew of efforts Rockland officials have put forward to alleviate its housing shortage. The city was the first in Maine to eliminate density restrictions on most land. It allowed in-law apartments on any single-family lot, slashed residential parking requirements, cut permitting fees for affordable projects and partnered with mall plaza owners to embrace all types of housing before a state law mandated some of those changes.
Despite those efforts, Rockland has still found itself unable to attract development because of “untenable” construction costs and high interest rates, Lachman said. It’s led them to consider financial incentives including a local housing bond.
“We’re getting to the point where we recognize that we need to do something fundamentally different and have a new set of tools,” Lachman said.
While other municipalities have enacted tax increment financing districts specifically for housing, Rockland officials believe they’re the first to enact a municipal bond for such a purpose.
The bond will be revenue neutral. As new housing is developed, tax revenue will ensure the bond’s cost is offset. That means no additional tax burden will be placed on Rockland residents, a news release from the city said. City officials have also been discussing how to create a dynamic in which the loan is replenished over time as projects are built, Lachman said.
Though the bond has to face a council vote Monday night, Lachman is optimistic it will pass, and believes it might even be a unanimous decision.
In addition to rising construction costs, the uncertainty of state and federal funding on housing means that the funding application process from Maine’s state housing authority will be far more competitive this year, Lachman noted. That’s motivated the city to explore ways to secure capital themselves.
“We’ve got to do something different to insert the city into being part of the solution,” Lachman said.