The Way Life Should Be? Not for Housing…

As I page through the real estate ads in my local paper, I could be forgiven for thinking that housing prices in Maine have dropped sufficiently so that most anyone can now afford to buy a home.

I would be mistaken.

At Sustain Southern Maine’s most recent Capacity Building session, Dana Totman, head of Avesta Housing, provided the audience with some startling facts:

  • 86,000 households in Maine pay more than 50% of their income on housing.
  • 16,315 households in Cumberland County pay more than 50% of income on rent.
  • From 1998-2010, home prices went from 2.8 times yearly median income to almost 4 times yearly median income.
  • 31% of all homeowners in Maine have a housing problem, either affordability or substandard housing.
  • 47% of all renters in Maine have a housing problem, either affordability or substandard housing.

Clearly, there are lots of people who do own their homes – but barely. This is not a picture of people on assisted housing and welfare. These are people who have jobs, maybe children, and who simply do not make enough income to securely pay for their housing, whether they own or rent.

Talk to any Realtor and you will hear that the lowest priced homes move the fastest. And always have.

We know Maine – even Southern Maine – has a relatively low median income. We also know the least expensive housing is farthest away from job centers, adding high transportation costs to the family budget.

So what does this mean to you?

Maine has a serious and growing housing gap. Even now, our housing is the wrong size, location, and price for the needs of a large part of our population. And as boomers age and want smaller, more affordable housing, the disparity will be even bigger.  And since most of our housing is older and not very fuel-efficient, that means an added financial burden.

This problem resonates through our entire economy, affecting tenants and homeowners, every age group, commuters and businesses. With housing, fuel and transportation costs eating up the lion’s share of household budgets, there is not much left over to go into the rest of our economy, be it food, clothing or recreation.

What to do?

One of Sustain Southern Maine’s charges is to evaluate where the housing gaps are and work with our Partners on solutions.

Some solutions will be based on finding ways to build more affordable housing with private/public partnerships. This is complex, but there are innovative ideas out there. Changes in development requirements could be another partial solution. A whole other range of ideas will turn on making existing housing more fuel-efficient. Most of all, it’s clear that these solutions will need input and collaboration across all sectors and interests.

But another important solution lies with the public. The term “Affordable Housing” comes with a stigma. Any well-intentioned planning board that takes on this issue can guarantee local feedback from residents concerned about safety and property values. But the truth is that a significant proportion of our neighbors are hanging on by a thread and simply need smaller, lower-priced housing options. Freeport is doing a very good job of providing these, using a wide variety of methods.

And, just as an aside, people in their 20s and 30s who want to buy a home also desperately need these lower priced options, as they try to balance stagnant wages, school debt, health care, child care and day-to-day expenses with possible home ownership.

Lots of people are asking if home ownership remains a reasonable goal in our new economy. That is certainly worthy of discussion and analysis looking forward. But right now, pursuit of this “American Dream” is embedded in our national psyche  – as well as our tax code. And while the shape and size of our homes may change, the need for housing options that fit our budgets will not. We need to think ahead and act now.

By Carol Morris, Sustain Southern Maine Team Member