Mainebiz Special Editions

W W W. M A I N E B I Z . B I Z 103 Fact Book / Doing Business in Maine I N F R A S T R U C T U R E / D I S T R I B U T I O N H as Maine's building boom already peaked? Maine issued 4,570 building permits last year, down slightly from 4,607 building permits issued in 2018, according to the U.S. Census. Of those, most were for single-family homes. With questions about the direction of the econ- omy and interest rates, combined with rising con- struction costs, Maine's building boom faces uncer- tainty. Combine that with Maine's ongoing demo- graphics challenge — an aging population along with slow population growth — and it's unclear where the building market is headed, but there are plenty of speedbumps on the road. Even at the recent peak in 2018, the pace is still far from matching pre-recession levels. In the past 15 years, the number peaked in 2005, with 8,747 building permits issued. e low point was 2011, with 2,299. Why is the pace so dramatically off that of 2005? Demographics are partly to blame, says Chuck Lawton, former chief economist for Planning Decisions Inc. "My sense is the demographics are different from before the bust," Lawton told Mainebiz late last year. e population is older. Retirees are downsizing and going into condos. Lawton said a building boom that stretched from the 1990s into the early 2000s was driven primarily by families with young kids. It created suburban growth in Scarborough, Cape Elizabeth and Cumberland, among other Portland-area markets. ere isn't the volume of families seeking housing and many that are seeking housing cannot afford it. School enrollments have dropped off and there are fewer kids. "e nature of the demand is from empty nesters and smaller families," Lawton told Mainebiz. Pricing and restrictions may also play a role. Even with a lack of housing, potential developers are facing resistance in certain areas, a sense that there's been enough development, or NIMBY. Peter Van Allen, Mainebiz editor, can be reached at pvanallen @ mainebiz.biz and @ MainebizEditor 1 Through April S O U R C E : U.S. Census TOTAL BUILDING PERMITS ISSUED IN MAINE, BY YEAR 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1 8,383 8,765 7,304 5,690 3,573 2,766 2,962 2,299 2,788 3,212 3,281 3,688 4,164 4,607 4,570 1,673 Building permits on the rise But can't touch pre-recession numbers B y P e t e r V a n a l l e n P H O T O / C O U R T E S Y B R U N S W I C K L A N D I N G H O M E S The Brunswick Landing Homes development includes 400 units that went on the market this year. My sense is the demographics are different from before the bust … The nature of the demand is from empty nesters and smaller families — Chuck Lawton Economist

• Cover