Solutions Library

North Haven Sustainable Housing

Addressing Affordable Housing

On many Maine islands, there is a shortage of affordable, year-round housing. This includes affordably priced homes for sale and rental units, especially those available for a full year rather than only in off-peak seasons. The effect of this lack of housing is to make attracting and retaining families—and especially the young residents of islands as they become adults—much more difficult. The lack of housing also provides a significant barrier to economic activity. It’s extremely difficult to find qualified applicants for year-round positions (e.g. school teachers or town employees) or even for summer positions (restaurant staff, sternmen for lobster boats, etc.) without affordable, comfortable housing units in which those employees can live. In the long run, an inability to offer quality housing to school teachers and to the young families that provide island schools with new students could be an existential threat to the year-round nature of many of these communities. Recognizing the significance of the problem, several islands have launched organizations to address this issue. They have used a combination of philanthropic donations, state funds, and sweat equity to create housing units appropriate to their communities. But in nearly all cases, there remains a significant need for more housing.

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Nearly every solution to the lack of housing requires the purchase or creation of new units, either for rent or for purchase. Additionally, most island housing organizations have included some legally binding restrictions on acquired or constructed property in order to ensure that it is both affordable and available for year-round use by islanders.

On North Haven, where North Haven Sustainable Housing has completed three projects, two homes were purchased on the open market and a third was constructed on donated land.

 The house at 166 Main St. was renovated by North Haven Sustainable Housing and sold to an island family. Photo: William Trevaskis

 

HOW IT WORKS

North Haven Sustainable Housing takes ownership of real estate through purchase or charitable donation. The real estate, whether land, an existing home, or a renovation project, is used in one of three ways: a new affordable house is constructed and sold, the existing house is renovated and sold, or the property is renovated and maintained by NHSH as an affordable rental property for year-round residents. The properties sold to new owners have a deed restriction that requires the owner to either: (a) sell the home back to NHSH at a predetermined multiple of the original price or (b) sell to a year-round resident at an affordable price. (Sale prices are indexed to inflation.)

 

KEY FACTORS

  • Attract capital. Whether in the form of donated land, donated money, state funding, or all three, these projects require significant investment.
  • Seek out housing experts. Genesis Community Loan Fund provided significant input into the drafting of deed restrictions, pursuit of state funding, models for financing, etc.
  • Use volunteer labor as much as possible. A significant amount of volunteer labor has lowered the cost of construction and renovation of all three NHSH properties. Skilled contractors are needed for some aspects of construction, but volunteers to do landscaping, painting, and other non-technical jobs can keep the projects affordable.
  • Use skilled volunteers to manage projects. Organizing volunteers, conducting a bid process for construction, dealing with legal arrangements, raising money, and communicating about the progress of various projects are all time-consuming, labor-intensive tasks. NHSH has no paid staff and has relied on board members to tackle these roles.

 

Q & A WITH HANNAH PINGREE OF NHSH

What constitutes “affordable” housing?

The name of our organization is North Haven Sustainable Housing. We seek to create housing that is efficient, year-round, and affordable for a family working on the island. It isn’t necessarily low-income housing, but our rents are in the $600–700 range, which is typical for the island. We consider a house between $100,000–200,000 affordable for an island family, but we have also tried to make several ownership options available based on ability to pay, and it really was about providing decent, year-round housing.

For units sold to homeowners, do you subsidize sale prices? How do you guarantee that properties will remain affordable?

We’ve subsidized sale prices to make them based on a homeowner’s ability to pay through fundraising. Our ability to raise funds allows this to happen. We use a deed restriction model to require the price of the house be limited in future sales to inflation and that the house remain year-round. We had used another model but it made homeowner financing very complicated.

With rental housing, how do you judge eligibility for the units?

The purpose of our rental housing project was to create two affordable, year-round rents. Maine State Housing required our tenants be low – middle income to be eligible to move-in and we did verify that with our successful tenants. We had 5 or 6 families apply for our two units. We required that families had lived on the island for at least a year and were employed, and we scored them based on a few criteria including kids, community involvement and references from past landlords. It is tricky in a small town. It would be less so if we had more funding to make good projects like this happen!

Why did you start working on weatherization and eldercare, when those aren’t necessarily “affordable housing” projects?

We consider weatherization certainly about making our island community and housing stock, more sustainable. And the eldercare project came to us, as a donor offered her house to our non-profit as a donation if we’d help develop an eldercare facility. The ability to keep our community members on the island for their final years is absolutely about creating a more sustainable and complete community – especially on an offshore island. And the jobs and vibrancy that will come from this central island facility is also important.

Where does the funding for these projects come from?

We’ve been lucky enough along the way to get a few helpful and catalyzing grants from foundations and our biggest grant was from Maine State Housing, which made our rental housing project doable. In addition, much of our funding comes from our generous community through donations. The community has supported our weatherization work, our home projects, and our eldercare facility.

With this experience under your belt, what advice would you give someone trying to do a similar project in their town?

I’d say go for it! It is worthwhile, even in small rural communities, to try to make sure people can come home, move in, and remain. I think starting small with projects like weatherization and building storm windows inserts is a great way to make homes more sustainable at a low cost. Building housing and rentals is a much bigger can of worms. We worked closely with a mainland organization called the Genesis Community Loan Fund, which has been crucial in guiding us through the most complicated parts of the project. We’ve also relied on donated land, lots of volunteer hours, and an organization run by volunteers and the board – so keeping it grassroots is helpful.

 

CHALLENGES

  • Raising money. “This isn’t easy work to fund,” says Hannah Pingree. “We’ve been lucky enough along the way to get a few helpful and catalyzing grants from foundations. In addition, much of our funding comes from our generous community through donations.”

 

ADDITIONAL RESOURCES

Originally Published March 2016

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