Study: South Portland needs 2,905 new homes by 2030 to meet projected demand
To meet projected housing demand in 2030, the average number of new units built each year in South Portland would need to increase more than 3.5 times the current annual average, according to a recent study.
The city will need 2,905 new homes by 2030, according to the Housing Needs Assessment conducted by consultancy Crane Associates and city staff.
On average from 2000 to 2020, the city added 102 units per year, for a total of 893 single-family units and 1,147 multi-family units.
Recommendations in the study’s final report, presented to city council on Thursday, include allowing duplexes to be built in single-family neighborhoods, increasing residential density, speeding up the permit approval process for developers and assisting tenants in several ways, including improving their credit ratings.
The report also recommends that the city encourage accessory dwelling units, or ADUs, also known as “granny plots.”
Council heard the recommendations as it was already exploring ways to implement rent stabilization, and weeks after enacting a moratorium on evictions and a 10% cap on rent increases. These measures have been taken following shocking rent increases at Redbank Village Apartments.
The report, Councilor Misha Pride said, also helps explain why residents of Redbank Village Apartments received rent increases of up to $598 in March.
“One of the reasons the whole Redbank thing is happening is that a company thought, ‘Well, that’s what the market will bear for rental housing, because there’s not enough housing. ‘” Pride said.
‘THE MISSING MIDDLE’
The report’s recommendations are geared toward what the consultants call “the missing middle,” or those earning 60% to 120% of the region’s median income, which should be around $118,000 for a homeowning family of four. by 2030. The median income in 2020 for a homeowner family of four was $90,276.
“The Missing Middle is a difficult place to live from a housing perspective,” said Milan Nevajda, the city’s planning director. “That means you earn too much for federal and other subsidies to apply to you, but you don’t earn enough to be able to afford what the free market puts online.”
The Maine State Housing Authority considers housing affordable if the landlord or tenant spends 30% or less of their annual income on housing needs, such as mortgages, rent, insurance, and utilities.
Homeowners earning 60% of the median income in 2030, the report estimates, will be able to afford a home for $184,000 or less.
“We know we’ll never see a livable house for $184,000,” Nevajda said.
The report projects a shortage in 2030 of 1,760 affordable housing units for those earning 60% of the median income, a shortage of 1,057 for those earning 100% and a shortage of 87 for those earning 120%. The housing shortage for those earning 60% of the median income causes a chain reaction, where those earning 100 and 120% of the median income are forced to also pay for housing outside their income levels.
“If they can’t find affordable housing for them, they buy within the price range,” Nevajda said. “They then use units which would also remove the offer for high-income people. Everyone is in competition with each other.
IMPACT ON TENANTS
Tenants are also obliged to “buy out”. The median income for a family of four renters is projected to be $63,669 in 2030. While there will be a surplus of about 800 units for the 100-120% income bracket in 2030, the consultants said that ‘there will be a shortage of 863 rental units for those earning 60% of the region’s median income.
The report estimates that those earning 60% of the region’s median income will be unable to pay more than $1,000 per month to make their rental housing affordable in 2030. Renters who earn 100% of the region’s median income will be able to allow $1,600 a month, and those earning 120% will be able to afford less than $2,000 a month.
This causes the same chain reaction that landlords face, where those at 100% to 120% income levels rent out units intended for higher incomes.
“Sometimes (residents) pay over 30%, sometimes they pay 60%, sometimes they pay 70% of their income for housing,” said Michael Crane, founder and principal of Crane Associates. “They are sacrificing household income for other purchases – food, medicine, education, entertainment, whatever else. This is what we call ‘stressed housing cost.'”
The idea of residents giving up other basic needs just to have a roof over their heads, Mayor Deqa Dhalac said, is “absolutely sad to see… All we can do here in the south of Portland, we should.
Another catalyst for the crisis is a drop in the number of people living in each household, according to Jeff Carr of Crane Associates.
“For 1,000 people in your population, the housing stock has to work a lot harder than it did in the 1980s and 1990s,” Carr said.
Secondary suites are a solution, according to the study, but a regional approach to the housing crisis is needed.
A regional effort would likely require cooperation between more than 60 municipalities, including South Portland. However, getting 60 cities and towns to collaborate is a daunting task and would likely require action at the state or county level, as well as regional organizations.
“I think the idea of regionalization is great and true, but I think it will take forever,” Councilor Susan Henderson said. “I think rubber has to hit the road, so we should start with ADUs.”
Henderson said ADUs would allow seniors to continue living in South Portland on fixed incomes and would make property taxes more affordable for younger people.
The consultants said a state law expected to go into effect next year could make some of the city’s decisions for them.
“Per state mandate, LD 2003 allows up to three or even four units (in designated growth areas) to be installed on any single-family lot within the community,” Nevajda said.
Councilman Linda Cohen said ADUs should be the first step but, with the new law coming, any further action the city takes should consider the impact of LD 2003.
“I really, really want to know the impacts of LD 2003 on the community before I can make a lot of decisions based on the recommendations of this report,” she said.
South Portland council says it will also consider landlords when drafting rent stabilization order