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W W W. M A I N E B I Z . B I Z 25 J U LY 2 2 , 2 0 2 4 F O C U S R E A L E S TAT E / C O N S T R U C T I O N / E N G I N E E R I N G "It's like a game of musical chairs, where instead of 11 kids and 10 chairs, you have 600,000 households and 560,000 dwelling units," Szanton says. "Anytime you've got that imbalance, people are going to bid really hard for those dwelling units and some will get left out, and the ones who get left out are the ones who have the least money." MaineHousing's development incen- tives include long-term financing at low or zero interest rates. Low-income hous- ing tax credits are allocated to develop- ers who sell them to corporate inves- tors, with proceeds used as equity in the developer's rental housing project. e equity lowers the mortgage needed for development. In turn, lower mortgages mean lower rents. Another important development was the legislature's passage in 2022 of LD 2003, which requires municipalities to permit a wider range of housing types and commits state financial and technical assistance for municipalities to support local and regional production targets. Puzzle pieces Bath Housing Development Corp. is building 42 units in two phases at 520 and 540 Centre St. Other affordable housing projects in Bath have included MaineHousing and the Szanton Co.'s collaboration on a project called the Uptown for tenants age 55 and older, with 42 income-restricted and 18 market-rate units. "ere's definitely been a lot of activ- ity," says Debora Keller, Bath Housing's executive director. Statewide, there's a long way to go. A MaineHousing study says the state needs 84,000 new units across all income levels. "We can set these ambitious goals, but one concern is the rapid loss of naturally occurring affordable hous- ing," says Keller. For a long time, she continues, affordable housing occurred organically in existing housing stock. But a genera- tion of local landlords are selling their properties, often to investors, she says. e result? Tenants can't afford rents or are asked to leave. "e 84,000 is a big number and it can be overwhelming," says Keller. "What's good is that we have a legis- lature that understands the issue and is working with the housing com- munity. at's what we're optimistic about. At the same time, there are so many barriers to getting more housing built. at's what's concerning." She continues, "People understand there's no one quick fix to this housing challenge. It takes a combination of pol- icy changes, it takes production of new units, it takes a commitment to continu- ing direct assistance to people who are struggling, and it takes a commitment to preserving our existing housing stock." Bath, she says, is hitting all pieces of the puzzle, through activities like zoning updates, new production, direct assis- tance and investment in older properties. "We're in a really good place here," Keller says. Density boost Moving through approvals in Portland is LB Development Partners' proposed $13 million, 30-unit affordable residential building at 42 Atlantic St. in the Munjoy Hill historic district. e development is made possible by recent changes to the city's land use code, in response to LD 2003, that allow for 2.5 times the base zoning density for affordable housing projects. e density boost would have permitted up to 35 units on the site. e developers, Dan Black and Carl Lakari of LB Development Partners, plan to apply for financing from MaineHousing, including 9% low- income housing tax credits and a zero- percent interest loan; plus tax increment financing from the city. "We're definitely seeing more affordable housing projects — or market-rate projects that include affordable units — being proposed," says Black. "To some extent, that's a response to public policy. Our state government and some of municipali- ties have made it clear that affordable housing is a priority through smart policy choices." C O N T I N U E D O N F O L L OW I N G PA G E » The best choice for your business banking just got easier. Christopher Rugullies SVP, Regional Relationship Manager crugullies@barharbor.bank 207-601-5718 Daryl Wentworth SVP, Director Middle Market Banking dwentworth@barharbor.bank 207-771-1216 We can make it happen. Together. All loans subject to credit approval. Additional terms, fees, and conditions may apply for some products. Discover why we're one of Forbes' World's Best Banks Talk with our Portland area Commercial Banking team today. Together with our commercial lending teams throughout Northern New England, we can help you and your business succeed. 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