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Posted on: October 8, 2019

Portland Continues to Create Housing for All Age & Income Groups Despite Market Obstacles

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2,300 housing units approved from 2014 - August 2019;
Report outlines remaining challenges and issues

City of Portland staff issued a draft of its 2019 biennial housing report ahead of the Housing Committee’s October 9 meeting, in which the report will be discussed before it is finalized. The report found that Portland continues to create housing for all age and income groups, despite market obstacles faced by cities across the country, including the cost of materials and a labor shortage, and tightened investment dollars at the state and federal level. 

The report also details that through the use of a wide variety of programs, planning, and deregulatory policies towards the creation and preservation of housing, 2,300 units of residential housing were approved by the Planning Board from 2014 to August of 2019. This equates to approximately 383 units per year, which is greater than the Comprehensive Plan goal of 256 units per year. Since Inclusionary Zoning was adopted in October of 2015, 59 inclusionary zoning units have been approved by the Planning Board and $826,500 has been collected as a fee-in-lieu. These fees are deposited into the City’s Housing Trust Fund and have been allocated to subsidize the creation of 492 units of affordable housing. 

“Our city has committed to complex policies and programs to meet the challenges of the local and regional housing market,” said City Councilor Jill Duson, Chair of the Housing Committee. “This report serves as a summary of our progress thus far, an acknowledgment of the challenges we must continue to address, and our commitment to use innovative solutions to solve these problems. The work to ensure a supply of safe, inclusive, affordable housing that strengthens our community, bolsters our economy, and contributes to the quality of life of our residents, is a top priority for the City Council, City leadership and city residents.”  

Funded projects since the City’s Housing Report two years ago include several currently or soon to be under construction:

  • a Portland Housing Authority project at 58 Boyd Street, which will create 55 new units of rental housing, and
  • two Avesta Housing projects, one at 977 Brighton Avenue called Wessex Woods which will create 40 units of rental housing, and one at 61 Deering Street called Deering Place which will create 75 units of rental housing.

In addition, City funding will help to leverage three projects competing for Low Income Housing Tax Credits:

  • Portland Housing Authority's Front Street Redevelopment project, which will create 105 units of rental housing,
  • Community Housing of Maine's project at 83 Middle Street, which will create 49 units of rental housing, and
  • Developers Collaborative's project at 66 State Street which will create 30 units of rental housing and a 40 unit lodging house.

These projects leveraged City funding from the HOME Program, Housing Trust Fund as well as Affordable Housing Tax Increment Financing. In the case of the 83 Middle Street project, if successful in the Low Income Housing Tax Credit funding application, the project will be built on land owned by the City of Portland and leased to Community Housing of Maine.

In the two year cycle covered by the report (2018-2019), the City Council approved Housing Committee recommendations to commit $2,073,439 in HOME funds, $280,000 in CDBG funding, $1,961,734 in Housing Trust Funds, and $13,846,142 in Affordable Housing Tax Increment Financing to create or rehabilitate over 418 affordable and market rate housing units and a 40 room women’s lodging house. 

In addition, recent updates to the City code have supported increasing residential density and height, provided incentives for creating affordable housing, backed the implementation of form-based codes, encouraged the creation of affordable accessory dwelling units, mandated inclusionary zoning, reduced lot size, expedited affordable housing administrative review, facilitated infill development, reduced development fees for the creation of affordable housing, and reduced parking minimums. 

The Housing Committee has also embraced the Metro Regional Coalition Council’s Resolution regarding the housing affordability crisis in the Greater Portland region, which the full City Council voted on during its October 7 meeting. The resolution affirms the City will continue to focus local and federal resources on the creation of new housing that is affordable at all income levels with the goal of producing 2,577 housing units (256 units per year) by 2027. 

The report also identifies a number of housing challenges and issues that remain, including: 

  • Portland’s estimated median income in 2018 of $51,799, places the city towards the bottom of the Portland – South Portland Metropolitan Area community income earners.
  • The three largest job sectors (office administration, sales, and food preparation and service) within the Portland - South Portland labor market are some of the lowest paying jobs.
  • To purchase the median priced home in Portland of $316,000, a household would need an income of $102,173, which is almost double the actual median income in Portland of $51,799.
  • Portland’s largest household group, at 20% of the population is low-income households.
  • 47% of renter-occupied households and 29% of owner-occupied households pay 30% or more of their income towards housing costs. 
  • 54% of Portland’s housing stock was built pre-1950, which is the riskiest housing for lead hazards. 
  • Increased demand and limited homebuilding activities have contributed to a significant decline in available housing inventory.

“The information presented in this biennial review of the state of housing provides us with a report card on progress and the data to support planning and implement actions into the next biennium,” said Councilor Duson. “We remain focused on making real progress to meet the crisis in affordable housing.”

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