A Blast from the Past

Promoting access to affordable housing for diverse, under-served populations has been a theme throughout Jay’s career.  While still an undergraduate, he started working full-time doing real estate / relocation services / research / grant writing for a small Urban Renewal Agency in Georgetown, Texas.  Here is an article from the Winter 1999 Maine Policy Review with Jay’s comments about the work of the 1987 Governor’s Task Force on Affordable Housing that he staffed in his position as the Deputy Commissioner for Community Development of the Maine Department of Economic and Community Development.

 

 

 

1999

Ten Years of Affordable Housing Policy: Is Maine Making Progress– A Symposium

Elizabeth H. Mitchell Dennis P. King

James B. Hatch Jay Hardy

 

 

 

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Part of the Inequality and Stratification Commons, Infrastructure Commons, Public Policy Commons, and the Real Estate Commons

 

 

Recommended Citation

Mitchell, Elizabeth H. , Dennis P. King, James B. Hatch, and Jay Hardy. “Ten Years of Affordable Housing Policy: Is Maine Making Progress– A Symposium.” Maine Policy Review 8.1 (1999) : 24 -32, https://digitalcommons.library.umaine.edu/mpr/vol8/iss1/4.

 

 

 

Ten Years On: Affordable Housing For an Emerging Maine

by Jay Hardy

 

 

very so often certain public policy issues, like bellbottom pants, make a fashionable appearance on the scene. When John McKernan, Jr. assumed the governor’s office in 1987, one of his early undertakings was to fulfill a campaign promise appointing a blue ribbon commission of Maine leaders to look at the state’s economic development needs and create a strategy. In 1987, the McKernan Economic Development Strategy Task Force developed its recommendations against the backdrop of a booming economy and a growing sense that the fabric of life in Maine was slowly changing—and not necessarily for the better. Late in Governor Joseph Brennan’s last term, State Planning Office Director Richard Barringer, working with the Natural Resources Council of Maine and the Maine Audubon Society, began leading the parade for a comprehensive Growth Management Program. Fueled by anecdotes about out-of-state developers with the desire to build condos on every available inch of Maine’s coast and lake shores, this initiative continued to take shape. This legislative program was passed even as the McKernan Economic Development Strategy Task Force met and the Democratic legislature disposed of

the new Republican governor’s budget and programs.

One result of this confluence of events was the appointment of the Governor’s Task Force on Affordable Housing. Affordable Housing became an important point of intersection between the business oriented Economic Development community and the environmentally oriented Growth Management community. In short, the emerging Maine needed to preserve a cherished feature of our state’s heritage: affordable places for workers to live.

From the perspective of a business-oriented Economic Development Strategy Task Force, this discussion was a winner. Expanding the housing stock is a good way to drive employment in the economy; construction is a leading indicator of economic prosperity. At the same time, important sectors of the burgeoning economy were feeling the labor pinch because of housing costs. Especially hit were the seasonal hospitality business (the coast in the summer; the ski mountains in winter). The growth of second

 

 

 

 

I recently listened, at a meeting of community leaders in Bethel,

to a number of concerns…affordable housing emerged as a major issue especially for those businesses seeking hospitality workers.

 

 

homes had made real estate values skyrocket in these areas which depended upon low-wage seasonal workers to serve the tourists.

While the argument was framed with an example of police officers and teachers in Cape Elizabeth being unable to live in the community where they work, the pressure of increased housing costs was making recruitment and retention of lower-paid workers more and more difficult. Affordable housing seemed an essential area of exploration. The attention of the state became focused on housing, since on the national level President Reagan had spent the preceding several years dismantling many of the federal housing programs often associated with the “Great Society.” The Affordable Housing Task Force report, which was issued in September 1998, was far-ranging, and grounded in an extensive process of examining alternatives. Through a priority-setting process, program initiatives and budget estimates were developed and presented in the final report. The Task Force recommended an aggressive program that included a $25 million Municipal Infrastructure Bond, several million dollars for one-time programs, and new annual activities which would cost between $2 million and $15 million of state resources.

The McKernan administration reluctantly embraced a minimally funded program package. On a political level, the affordable housing debate was dominated by competition between the Republican-controlled state agencies (such as the Department of Economic and Community Development) and the Democratic- controlled Maine State Housing Authority, then headed by Elizabeth Mitchell, who has just retired as Speaker of the Maine House. This was an intriguing issue, since it was difficult for Democrats to vote against any housing initiatives, even those proposed by Republicans. Once a package was assembled, Dick Davies, a former Democratic legislator who was serving as Deputy Director of the Maine State Housing Authority, began deftly guiding the initiatives through the legislative process.

The state government budget in 1989, which contained

these new housing initiatives, ran into changing economic realities. By the end of the 1989 legislative season, the administration was scrambling to shore up the budget in the face of the impending economic downturn, and had eliminated

almost all new funding of program initiatives. Affordable housing was one of the casualties. In the area of housing, there were some new programs created, such as the Alliance, but no significant new funding by state government.

In the ten years since this last affordable housing scare, the economy has cycled once more. As proof of the psalmist’s lament that there is nothing new under the sun, I recently listened, at a meeting of community leaders in Bethel, to a number of concerns expressed about the need for affordable housing. In that discussion, affordable housing emerged as a major issue, especially for those businesses seeking hospitality workers.

Given our economic, social, and political situation, will we likely repeat the experience of a decade ago? Will affordable housing once again capture our attention?

Before answering these questions, we must pose a more basic query. Have we made progress in the area of affordable housing in the last decade? Certainly, affordable housing does not get the attention that it was receiving a decade ago. Is this lack of attention because we have better housing programs that have started addressing this issue?

While it would be hard to argue that the relatively small amount of state money invested in housing has made an appreciable difference, a number of factors have combined to de- emphasize the affordable housing question. Affordable housing has always been considered a second tier economic issue. In many ways, affordable housing appears as a symptom of our economic situation—the result of coupling a per capita income well below the national average with highly desirable real estate in selected markets. By some standards, Maine housing has continued to be affordable, at least compared to many other nearby markets. This has been one reason for the growth of the second home market in Maine. At the same time, the lower per capita income of many Maine workers has been the fundamental in keeping them out of the housing market.

The problem in not universal. Compared to national averages,

there are many Maine communities where housing is quite affordable and available. Unfortunately, too often there are few job opportunities—especially jobs paying a living wage—in those

 

communities with an affordable housing pool. It is this mismatch, this lack of diversity and availability in specific markets, that has been a source of concern.

The economic realities of 1999 are quite different from those of just over a decade ago. Per capita income has increased marginally, narrowing the gap in housing affordability. Other factors have eased the housing market as well. The low prevailing interest rate has made homeownership more accessible. Even the present low cost of petroleum has had an impact. With heating oil costs at least temporarily lower, overall housing costs have been reduced. Similarly, the lower cost of gasoline has made commuting longer distances more economically feasible for moderate-income Maine people.

In the last decade, the persistence of programs from the Maine State Housing Authority has opened the door to home- ownership to many Maine citizens. While certain businesses, especially those dependent upon low-wage second workers, continue to see housing as an issue, low unemployment rates and higher wages have eased the situation.

Given the faltering and subsequent recovery of the economy in the early 1990s, the emphasis has stayed fixed on larger development issues—employment, per capita income, and infrastructure. Political attention has been focused on issues such as international trade, new tourism programming, and a host of other business retention and development initiatives.

It is not only the nexus of economic factors that has diminished the concern for affordable housing. Maine’s infatuation with growth management, pervasive in the late 1980s and early 1990s, has not been revived in the last few years. After a spasm of promoting local comprehensive planning, the statewide program was largely dismantled. While many communities used the opportunity to create comprehensive plans with zoning laws to implement them, other communities have been less than rigorous in approaching these issues. Many of Maine’s largest communities focused on the affordable housing issues as a component in their comprehensive planning progress. Some of those other communities aggressively pursued diverse housing stock as a local goal. For other communities, affordable housing was a code word for “mobile homes” and as such was resisted or zoned into the least desirable areas within the municipal boundaries. Without the emphasis on local comprehensive planning from the state, accompanied by state review of plans and the authority to impose sanctions, affordable housing has remained an issue only in select local communities.

 

The solutions proposed in 1988 were specific to that time and place. Factors have changed, and our economic realities are different. Some of the ideas contained in the report still have merit, but chances of reviving a major interest in state investment in housing seem remote. As we head into the twenty-first century, issues such as an east-west highway, or expansion of access to affordable health care seem to capture much more attention.

Affordable housing is a classic “rising tides lift all boats” issue. In an area of less government, emphasis on growth per capita income make a better political argument than direct intervention in the housing market. The mixed success of federal housing programs, especially in urban areas, has cast doubt on government’s ability to truly impact this intractable problem. Politically, the wisest course has seemed to be leaving the matter for the rising tide.

Since the issuance of the 1988 report, state policies have focused much more on the economic development basics. With the fundamental changes in the makeup and operation of the Maine State Legislature as a result of term limits, that trend is likely to continue. If there were no other lessons learned, one thing became clear. Housing is a complicated, difficult and expensive proposition, as the almost $20 million annual price tag on the initial report indicated. Unless there is a significant cadre of committed legislators, or a governor who makes affordable housing a keystone issue, it will probably continue in the background, never rising to the status of a significant state policy.

While the availability of a diverse affordable housing stock is

one element in a healthy economy, it has not subsequently been singled out as a dominant factor. The 1988 Affordable Housing Task Force raised a range of important questions, some of which remain on the table today. Most importantly, the Task Force revealed the enormity, complexity and cost of addressing the housing issue, reinforcing our state policy that remains to this day—an approach to housing with many more elements of “avoidance” than “engagement.”

Maybe next time. �

Jay Hardy served as deputy commissioner for Community Development at the Maine Department of Economic and Community Development when the 1988 Task Force on Affordable Housing was undertaking its work. He left the Department shortly after the 1989 legislative session. Since that time, he has been a principal in NEW Solutions, a consulting firm that works at the interface between business and government

 

Fall 2022

 

Home ownership has been the best means for most Americans to secure generational wealth.  Current real estate market conditions (limited housing stock / high input costs to produce additional inventory / newer higher median prices driven by the pandemic / elevated mortgage rates) have effectively limited the first-time home buying capacity for a large portion of the population.  Factor in overall uncertainty in the economy and resultant insecurity in the employment sector, and low/moderate income families and individuals – especially younger and more diverse ones – are increasingly unable to afford housing, let alone consider home ownership.

 

These impacts are felt across many demographic cohorts – but Gen Z – those born after 1999 are particularly hard hit.  The dominance of the Baby Boom Generation (1946 – 1964) is over – they account for 32% of all home buyers.  They have now been eclipsed by the Millennials (1980 – 1999) who now make up 37% of the buyers.  Gen X (1956-1979), right in the middle, accounts for only 24% of the home buying. Market.  Gen Z accounts for just 2% of the buyer’s pool, although 97% want to own a home in the future – 87% plan to buy before they reach age 35.  Gen Z is the first truly digital generation and like the generations before them, will transform the housing markets as their share of the market grows.

 

These younger cohorts of consumers (Millennials and Gen Z) will shape the market for the next several decades and they seem ready for new approaches to solve today’s housing dilemmas.  Not only will housing styles change – housing production models are being updated.

 

Over the last few years, NEW Solutions has been engaged in the redevelopment of former paper mills in the Katahdin region where a recurring theme has been the development of new energy efficient building products manufactured using Maine wood.  New building products such as cross laminated timber, engineered wood components like framing elements with built in energy breaks, cellulose based building insulation, others can be combined through an off-site manufacturing (OSM) process to create housing components and housing.  These can be completed modular units or panelized / palletized component to be erected on site to complete housing units.

 

Housing supply faces changed expectations — including a greater emphasis on community and shared space; less maintenance; greater durability, and energy efficiency.  It is all about functionality.  The aim is to rethink community in ways that are sustainable – which means scaled and distributed infrastructure; shared transportation resources; greater autonomy for individuals with recalibrated expectations for what shelter should look like.  Energy efficient and maximizing renewable energy.  Sustainability.  This is key to the evolution of housing.

 

The imperative is becoming off-site manufacturing of housing units (OSM) is to perfect this new hybrid housing product. A single scalable design could serve multiple purposes – from emergency shelter / micro housing unit / accessory dwelling unit /affordable housing unit — all based on a panelized model that could be sized to work for multiple application.  It could be used for the unhoused whether they are temporary or long term and for whatever reason – climate refugees / economic refugees / mental health refugees. Multiple cojoined units could become permanent housing, and they should be constructed to be both energy efficient and independent. People are increasingly in need of refuge – and that starts with safe housingA new driver in the growth of OSM is the creation of a new hybrid housing product. This could be a scalable design could serve multiple purposes – from affordable housing unit to emergency shelter to micro housing unit to accessory dwelling unit all in support of