The lack of affordable housing impacts much of the state’s economy, and much of the economy impacts housing.
That was one of the conundrums emerging from the Maine Affordable Housing Conference on Sept. 9 in Bangor.
When housing options are few or too expensive, the workforce—which is already facing generational decline—tightens. And as building materials grow more costly and federal funding support for projects shrinks, the rental market becomes tighter.
“There just isn’t the money that was available in 2023,” said Dan Brennan, MaineHousing director. Still, the state’s goal is to see 80,000 new homes by 2030.
“We’ve proven we can build housing without creating sprawl.”
—Gov. Janet Mills
“It’s costing a lot more to build homes,” Gov. Janet Mills noted in her remarks at the conference, blaming, in part, the Trump administration’s tariffs on certain imports. Building materials were 6% higher in August than the previous August, she said.
Housing shortages threaten prosperity, she said.
“We don’t want to think about it as a siloed issue,” Mills said. “It’s part of economic development.”
Despite the challenges, the governor highlighted what she sees as wins.
About $315 million has been spent during her administration to build housing, five times what was spent in the period from 2000 to 2018. Some 2,100 new apartments and houses have been built, 1,800 are under construction, and 1,500 are in the pipeline, she said.
Monthly mortgage payments in Maine are the lowest in New England, she said, and the rent-to-income ratio also is lowest in the region.
About two dozen housing-related laws were enacted in the last session, she said, including those to support historic preservation efforts.
“We’ve got to revitalize the downtowns,” Mills said, acknowledging the trend that began with the pandemic in which office space has become underused. Such spaces should be converted to multi-use, she said.
“We can’t quit building now,” Mills said. “We’ve proven we can build housing without creating sprawl,” while retaining “that sense of place.”
A panel discussion including Stockton Williams of the National Council of State Housing Agencies and Rep. Traci Gere of Kennebunkport, moderated by Erik Jorgensen of MaineHousing, focused on the challenges.
“The market is broken for most Maine people right now,” Jorgensen said, with Portland real estate assessments up by 43% from a year ago.
Williams said he sees Congress as being more pro-housing than at any time in the last 25 years, yet Trump’s budget proposal cut 50% on low-income rent vouchers. Those cuts were reversed in the final budget bill.
Gere cited an evolution in regulations, as seen in a housing development in Newcastle which, under old rules, would have required 32 parking spaces. Calculations for such projects no longer use a 1.5 multiplier for each resident.
A bit of good economic news is the state’s modest, but noteworthy population growth. From 2021 to 2024, Maine saw a net gain of 40,000 residents. Observers attribute the growth to people escaping more urban areas during the pandemic and working remotely.
“People are moving here and staying here,” Mills said.
State Economist Amanda Rector dove deeper into the numbers in her presentation. From 2010 to 2020, Maine grew by 2.6%, then grew by 3.1% from 2020 to 2024. All the growth is attributed to in-migration, most from other states, she said.
But with the oldest median age in the nation at 44.8, and the largest percentage of population over 65, Maine faces challenges.
“We have more people exiting the workforce than entering the workforce,” Rector said.
And on housing, Maine was first in the nation in price increases, a statistic “you don’t want to be first” in, she said.
Innovation, ill-fitting regulations, and the need for financial literacy also were themes at the conference.
Affordable housing must be understood more broadly than building two-bedroom, one-bath starter homes, speakers said. In response to mobile home parks being bought up by large corporations, state law now facilitates residents buying the land collectively and owning their residence. Thirteen parks are now resident-owned, three purchased in the last year. In all, 8% of housing in the state is in mobile home parks.
The governor said modular homes are another innovation and have made building faster and cheaper, citing their use by advocacy groups on North Haven and Peaks Island.
Regulation changes to allow accessory dwelling units, or ADUs, in a homeowner’s yard are having an impact, Mills said. The Brunswick business Backyard ADU recently delivered its 100th unit, she added.
At a break-out session, real estate agents and bankers discussed how loan preapprovals are now the norm, and that first-time buyers often aren’t aware of the money they need to have saved to purchase.
Housing expansion has been supported around the state, Brennan said, though he gave emphasis to the phrase “in most areas.”
Mills sounded a similar criticism, noting that Scarborough’s town council killed a 90-unit housing proposal on Route 1 that would have served lower-income seniors and workforce renters, citing traffic.
“We can’t be parochial about this,” she said. “They’ve got to be in somebody’s backyard.”
