Maine Islands Coalition Minutes August 4, 2006

Present
Hannah Pingree State Representative, District 36
Chris Rector State Representative, District 48
John McKane State Representative, District 51
Dennis Damon State Senator, District 28
Dana Dow State Senator, District 20
Ted Koffman State Representative, District 35
Roger Berle Chair, Island Rep, Cliff Island
Marjorie Stratton Assistant Chair, Island Rep, Vinalhaven
Pete Anderson Island Rep, Islesboro
Doug Boynton Island Rep, Monhegan
Mark Greene Island Rep, Long
David Jermann Island Rep, North Haven
Dexter Lee Island Rep, Swan's Island
Donna Damon Island Rep, Chebeague
Marjorie Phyfe Island Rep, Peaks
Mark Tierney Island Rep, Little Diamond
Alden Finney Great Diamond (alternate)
Rudy Graf Isle au Haut
Beth Howe Chebeague
Steve Hederick, Vinalhaven
Art Astarita Peaks, RCAP Solutions
Liza Fleming-Ives Genesis Community Loan Fund
Martha Freedman State Planning Office
Adam Krea Maine State Housing Authority
Chris Spruce Island Housing Trust MDI
Ted Hoskins Penobscot East Resource Center/Sea Coast Mission
Ron Beard UMaine Cooperative Extension
Cyndy Carney Coastal Enterprises Inc.
Rob Snyder Island Institute
Chris Wolff Island Institute
Jennifer Litteral Island Institute
Kathy Westra Island Institute
Alyson Mayo Island Institute
Cyrus Moulton Island Institute
Sarah Hennessey Island Institute
Alden Robinson Island Institute

I. Welcome, introductions and review agenda
Roger Berle welcomed everyone to the meeting, and everyone introduced themselves.

II. Focus: Panel Discussion on MIC and Affordable Housing Policy
Facilitator: Ted Hoskins, Penobscot East Resource Center/Sea Coast Mission
Panelists:
Chris Spruce, Island Housing Trust MDI
Martha Freedman, Director, State Planning Office
Dale McCormick, Maine State Housing Authority
Adam Krea, Maine State Housing

a. What is their take on the tools we have identified?
b. What are their suggestions for creating an action plan?

Ted Hoskins stated that goal of the panel discussion was to solidify ideas and develop an action plan for the upcoming legislative session. The Maine Islands Coalition has articulated several major concerns, but we haven't yet developed a way to get there. His role as a facilitator today is to help the group develop the three top ideas; then, if there is a need for a coalition, define what that would be like, who it might include and how they would be chosen and supported.

The task of the panel members is to stimulate the discussion and get us going. Two questions have been posed: What legislation is needed, and what are their suggestions for creating an action plan?

Martha Freedman, director of the State Planning Office, spoke first. She said the context of this discussion is Maine's changing economy. Maine is now part of the national economy. Services are becoming the mainstay, which allows people to live away from where they work, and many Maine people are commuting to Boston, or tele-commuting. There is also demographic change, the baby boomers are getting older and the second home market is creating pressure on the coast. And there is the property tax issue. State government has done a lot to try and address this issue, including $280 million in education funding for municipalities, and another $202 million over the next two years that will translate into property tax relief. Valuations are another huge issue. Finally, Martha spoke about land use, noting that at state planning they are rewriting growth
management rules and encouraging communities to think more regionally.

Chris Spruce, of Island Housing Trust MDI, spoke next. He's concerned about the need for model zoning ordinances dealing with density bonuses for workforce housing and enabling regional comprehensive planning. Chris also said that the working waterfront referendum was very successful, and this group ought to use that model to create a fund, $25 or $30 million, with which to buy down workforce housing infrastructure costs, which he said were significant and sometimes a barrier to successful projects. Beyond that, Chris said providing some source of public funding may encourage communities to provide the land for free to affordable housing projects if they know organizations are there to partner with and there is funding to be leveraged.

Liza Fleming-Ives of the Genesis spoke next, emphasizing the importance of creating a collaborative effort. Genesis provides technical support to communities to help them finance affordable housing. Liza said that one of the greatest barriers is that there is not enough funding. A policy platform could be how to create a new pool of funds. She mentioned that one project out there is the Maine Affordable Housing Network, run by
CEI, it's a state-wide group and it hasn't been as active lately (Liza said that Cindy can talk more about that), and Liza's sense is that its hard to be state-wide with housing issues. Liza also said that there needs to be a dedicated staff person, because a platform can't move forward without someone always working to keep partners engaged. Her recommendation is to focus on what makes the most sense for island and coastal
communities, and look for natural partners like housing organizations and authorities. Liza suggested that the Southern Maine Affordable Rental Housing Coalition (SMARHC) might be a good organization to communicate with. She also said Genesis is interested in being a partner, and added that they recently hired a communications director, that person could help to tell the story. Finally, Liza also noted another resource
that came out of the affordable housing symposium, the island talk list serve at www.maineislands.org.

Adam Krea from Maine State Housing Authority spoke about the particular difficulties islands face with affordable housing. For example, the Maine Housing Single Family Sub-division Program requires that the development be within 10 miles of a service center, which prevents islands from accessing the funding. He cited research statistics demonstrating the need for affordable housing in the islands (those that are un-bridged and are not part of another municipality). In the last 5 years, home prices on islands in Maine have jumped by more than $100,000 (a 72% increase on home price); and the islands have an affordability index of .5 (meaning that an average person's income is only half as much as you need to buy a house). Maine Housing has not done a lot of single family developments, but the Affordable Housing Subdivision Program offers a $15,000 forgivable loan for each home, up to $300,000 for a subdivision. There is also the affordable housing TIF program, a municipal designation of a tax district that encourages affordable housing development. As far as legislation, the state funding comes from the home fund (a real estate transfer tax) but for the last few years that has been taken for the general fund. Federal and bond money tend to be for very specific things. Adam suggested advocating for an affordable housing bond and designating part of that for island communities. He added that local comprehensive plans are now supposed to address affordable housing, with the goal that 10% of new housing should be affordable. At the community level, communities can also use permit fees to raise money to fund affordable housing, and can create a CHDO, a Community Housing Development
Organization. Fifteen percent of the HOME funding that Maine Housing gets is supposed to be available to CHDOs.

After the panelists had spoken, the discussion was opened up to the larger group.

Donna asked Adam to clarify, did he say that rental housing won't work on islands? Adam said yes, rents on islands are usually too high for people to afford. Economies of scale really help with rental projects, and so they don't usually work on islands. Also, most rental projects are built with federal tax credits, and that mechanism only works when market rents are higher than affordable rents. He said that for islands, there are ways to build rental housing, but a new model is needed. Martha added that there is another kind of rental issue in the summer, with the service economy and college kids and foreign workers who need affordable seasonal housing. Hannah also noted that teachers and others often lose their housing for the summer.

There was also concern about not having section 8 housing. Adam described Section 8 as an old program, where a person would pay 30% of their income, and whole buildings would be for section 8 housing. He said it really doesn't exist anymore in the same way. Vouchers are given to individuals, and from there it is between the individual and a landlord.

Liza added that most island housing organizations have criteria for who can access housing, such as civic contribution and duration of living in community. They can be selective because they haven't accepted tax money yet.

Another option is partnering with habitat for humanity.
Ted Hoskins brought the group back to creating a plan.

Ron Beard said first, we need a broad coalition that will work both on policy and funding. Second, we need as many tools and models as we can come up with. Third, we need local mechanisms to capture funding (local dollars). Fourth, we need to get some land, and working with conservation organizations creates potential.

Chris Rector and Hannah said they both submitted bills in the last legislative session to create a local control real estate tax. It was an unknown concept, but even though it's more well-known now, it won't pass without broad support. The real estate groups especially hated it. Hannah said that the Working Waterfront effort was successful with several ideas. We need to come up with 3or 4 things that we move forward with and see
what we can get passed. What are the two or three tools that affordable housing groups on the islands need?

Ted Koffman said more could be done in the area of tax incentives for developers. There may be support for a local option sales tax on food and lodging, and coastal communities could direct that revenue toward affordable housing. Doug said that money follows policy. We need action items.

Hannah said she thinks there is a need for a coalition, for tools and expertise, and especially for money. She asked the panelists, is there a need for money? Liza said yes, it is the number one barrier. Chris Spruce agreed. As an example, he said, the MSHA affordable housing subdivision pot is about $1.8 million, only enough to fund 6 projects at the maximum grant of $300,000 per project. Martha also said yes. She expressed strong support for a bond, emphasizing a great capacity to bond in Maine. Adam said yes, money is needed, but there are also things that can be done that don't cost money.

Ted Koffman said that a study to determine the gap, the need was a big advantage to the Island Housing Trust as it began raising funds and planning its first major initiative on MDI. The study found that for every three middle income jobs being added, only one middle income house was being built on MDI.

Rudy said he agreed with Doug, that money follows policy, and asked who should we consider partnering with? This is a coalition here of islands, but affordable housing is an issue all along the mid-coast. Who are the organizations in the mid-coast area that make logical partners?

Beth Howe asked about the orientation of the effort. Is it focused on the islands, on coastal communities or on all Maine communities that need affordable housing?

Rob suggested creating a principle that people buy into, such as that affordable housing in important to Maine people, and people can sign on and create an immensely broad coalition, then there can be a different scale for people who are willing to give time, money. He said that's how the Working Waterfront coalition was structured.

Beth asked to hear more about the Working Waterfront coalition. Chris Spruce said that it started with a small group of people who said this is an issue, and the group just kept expanding. There was a broad principle that people could subscribe to, and about 100 groups that subscribed to it, and a much smaller group that really shepherded things through. The executive committee, 8-10 people who really worked, was mostly from
organizations who took a position in support, and others were advisors, like from state agencies.

Doug made a motion to form a coalition to deal with affordable housing on islands and coastal communities. Roger seconded the motion. A discussion about what words to include in the motion followed.

Martha suggested changing it to "workforce housing", to broaden it out from coast.

Hannah said that for the islands, it's about sustaining year-round communities. To allow Maine people to stay in the communities they grew up in, or live in the communities that they work in. "Workforce Housing coalition: Sustaining Maine communities" Cindy said that the Mid-Coast Coalition for Affordable Housing went Maine-wide and that's why it's kind of a dead organization now. They got too broad, tried to include
everybody who was involved and every county in the state. What holds a coalition together is a specific task.

Hannah noted that the legislation will have to be passed by the entire legislator, and the rest of the state might not have a lot of sympathy if it's just for the coast. Ted Koffman agreed with Hannah. There is a perception that the coast is wealthy. Allies could be found in other communities that also have affordable housing needs.

Chris Spruce added that the Working Waterfront coalition reached out to the farming community. This coalition could reach out to conservation community. Broaden the base. It's important to be fluid with who has to be at the table; keep a loose structure. Businesses will also be very important. People can't afford to live where they work.

Jon McCain asked if the term workforce might exclude our retirees and elderly. The term "working families housing coalition" was also suggested. There were several cautions against using that term.

Dana Dow suggested the group stay focused on the unique needs of islands.

Pete Anderson suggested we return to the initial motion "to form a coalition that works toward affordable housing." A vote was taken. Roger noted that every island was present (all 13), and someone from Cranberry was the alternate for Malcolm. The vote was unanimous and in favor.

The next discussion was about how to move forward.

Chris said that the Working Waterfront steering committee, of 8-12 people, formed the core working group. Ron suggested figuring out who should be at the table, and let them work out the details.

Cindy said that the education piece, to inform people about the issue, is very important.

Rob asked, what are the characteristics of the people you want on the executive committee? Education, fundraising, staffing, PR and communications capacities. For the Working waterfront effort, we wanted boat builders and other commercial interests. Looking for both qualities and constituents.

Roger volunteered to initially represent MIC. The following list of initial contacts was made.
MIC/Roger, Doug and affordable

housing sub-committee members
Island Institute/Rob
CEI/Cindy
MSHA/Adam
Genesis/Liza
Island Housing Trust/Chris Spruce
SPO/Martha
Seacoast Mission
Jackson Lab (a business person)

Returning to Question A, what legislation is needed? A list of ideas was generated.
Real estate transfer tax
Bond
Local option sales tax
County tax
LURC rules
Regionalization (pilot and incentive
programs so that regions can do what
works for them)
State HOME funds irrevocable
CHDO funds
State revenue sharing formula

The next meeting of the initial affordable housing group will be Thursday Sept 7, 10 am at the Island Institute in Rockland, 4th floor. All of the above listed will be invited. The panelists and MIC members agreed to be there.

Thanks were expressed to Ted for facilitating, to the panelists, to Cy for taking notes and to the legislators for coming.

III. Legislative Update
Chris Rector noted that the washing of fishing boats may be an issue of interest to the MIC.

Steve Hederick asked Hannah if there is going to be any improvement in cell phone service on the islands. Hannah replied that technology issues on the islands are huge, and that the Governor's bill offered huge incentives to companies to provide the technology, but we still have to convince them to do it. Islands have small markets. ConnectMaine is a new entity, maybe contact them and say what can you do to help us? Rudy raised the issue of county taxes. Islands are paying and getting no services. Can anything be done? Donna said we need an island county. Hannah said it's a real problem. She added that if an island uses county sheriff services, you now have to pay 100% in addition to county taxes. She is going to put in a bill to try and reverse that.

IV. Education Update
Do we want to follow up on last meeting? Hannah said that the funding formula is a very complicated issue, and suggested that the best thing to do is try to make it so the coastal communities don't lose any more money. The tax question and school funding will be a huge debate again next session, we need to stay engaged but we can't take the lead.

V. DEP and Overboard Discharge
There was a group discussion led by Roger about this. It seems to be of concern especially to Cliff and Monhegan Islands. Roger said that on Cliff, their big concern is their groundwater, and that to go from OBD to subsurface systems, the cumulative impact could be very bad. Doug added that on Monhegan, it's the same thing, they're changing over to septic, and it's very expensive, but that the State has now recognized that some seasonal homes don't need the same size septic. With site evaluation, the state is beginning to recognize some low cost systems as useful in some circumstances. There are other possibilities. Art Astarita added that there are a lot of small, affordable systems, alternatives to the extensive leach field, especially if a group of neighbors shares the cost. The biggest issue is common ground for this to be shared. Get a site evaluation, look at options. Also, if towns can understand their aquifer, it's a good idea to secure land and hold it for groundwater recharge.

VI. Cost of living Study Update,
Alyson Mayo spoke about the three projects the affordable housing subcommittee has been working on, a market basket study, a cost of living study and a valuation study. They are moving forward with the first two. Professor Sam McReynolds from the University of New England (UNE) and several of his students have been having trouble getting a hold of people on the islands, though, for the market basket. They still need information from stores on Cliff (Roger will follow up); Chebeague (Donna); and Long (Mark). Also need more information for the valuation study, both the total state valuation for each island and the number of parcels, as far back as you can go. Dexter will follow up Cranberry; for Frenchboro and Matinicus, Roger will contact Eva and Pat, and Alyson will get everybody instructions. As for the cost of living study, Rudy did a pilot, including the cost of electricity, fuel oil, kerosene, keeping a car on mainland, barge to bring out soil, etc. He said it didn't take too long. He will put something together about what he was able to find, and the college students will follow up. Alyson is finished on Sept 8, then to a job in Vermont. Need to finish market basket in   the next week. The cost of living will need to be finished within the next couple of weeks.

VII. Next Meeting
The next meeting will be on November 10th, 10am - 2pm.
Meeting was adjourned.
Minutes by Sarah Hennessey.