Mainebiz

W W W. M A I N E B I Z . B I Z 11 JA N UA R Y 1 3 , 2 0 2 0 A s we start a new decade, the national and local housing mar- kets have undergone a significant tran- sition from both 20 and 10 years ago. e new normal that has emerged will serve to inform housing markets over the next year and more here in Maine in ways that will have a profound effect on the lives of Mainers. A look at some of the single-family new housing production data for Maine and the nation and illustrates the trend. In the 1990s, Maine had an average of 4,095 single-family home starts per year. In the 2000s, the average was 5,578. But in the past decade, the average dropped precipitously, to 2,994 single- family home starts per year. e national rate also dropped in the last decade. Maine's housing starts represent about 0.4% of the national figure, proportion- ate with its population. Even ending the decade on a high note, it looks like new single- family home production in Maine will be about 3,500 for 2019, which is still only 63% of what the average was for the 2000s. On a national basis, we underbuilt housing — single family, multifamily, and modular/manufactured — by 6 million units for the past decade. For Maine over the same period this would be the equivalent of about 24,000 homes we underbuilt — roughly 15,600 single family, 6,700 multifamily, and 1,700 modular/manufactured. So, what will the trajectory be for housing in Maine as we enter the new decade of the 2020s? We will continue to see housing demand outpace housing supply for a good part of the decade. An aging and retiring construction trade labor base will be exacerbated by the relative unpopu- larity of tradecraft among current high school students leading to not enough labor to build the homes needed. Additionally, there is little local desire to add more housing stock, so getting approvals for additional hous- ing at the scale needed to satisfy nor- mal demand, much less the unsatisfied supply from the past decade, will be very difficult. NIMBY has won. e result will be prices continu- ing to rise faster than incomes and attainability of housing continuing to deteriorate. ere will be some movement, most likely, on the labor front, as produc- tion of homes will begin to move more toward modular homes built in factories. Automation and robotic technologies help to compensate for lack of labor. But this will probably take a decade to become a real change factor. With an expectation that there will not be enough new housing built to accommodate housing demand, the other avenue that will be opened is tak- ing existing housing and putting more people in the structures. is will take the form of more adult children or senior parents moving in with relatives or taking in board- ers or tenants. Sometimes, this will involve remodeling existing homes into a smaller "main" home and several apartments. At other times it will involve attempts to place accessory dwelling units, or "granny flats," in the yard. Both will most likely run into the same local zoning and NIMBY constraints that new construction faces but expect the pressure to move in this direction anyway. e result of these forces will be that, for those already owning homes, it will be good times financially. However, for those looking to upsize, downsize or move into the state, options at reasonable prices will be limited. All will have a negative impact on the state's ability to grow to or oper- ate at its full potential. e ultimate solution to creating more and attainable housing in Maine actually resides with us as citizens. Only when we begin to lose some of the NIMBY trends we have devel- oped will there be an opportunity for both more housing and denser housing around existing services. Only though the addition of supply will there be some opportunity to open up a broader range of housing for all. George Casey, chair of Vistage, c a n b e r e a c h e d a t g e o r g e . c ase y@v istag echair.com February 28th at Holiday Inn by the Bay PORTLAND, MAINE NEW ENGLAND'S BIGGEST BEER INDUSTRY CONFERENCE PRESENTED BY SPONSOR + REGISTER NOW! nebrewsummit.com NEED HR ANSWERS? 25 th ANNIVERSARY MAINE HR CONVENTION Quality programs for everyone. HR Beginners May 11-12 HR Professionals May 12-15 Supervisors May 15 MaineHRconvention.com May 11-15, 2020 Samoset Resort Rockport, Maine Here is what you can expect from Maine's housing market this year B Y G E O R G E C A S E Y B Y G E O R G E C A S E Y C O M M E N TA RY We will continue to see housing demand outpace supply for a good part of the decade.

• Cover