The closing of two Lowe’s stores in Maine is yet another sign of the poor housing construction and renovation markets, both nationally and here in Maine.
The implications of fewer houses being built or renovated are serious for our economy, impacting the many trades jobs including general contractors, carpenters, foundation contractors, electricians, plumbers, earthwork contractors, roofers and landscapers. Most readers will know someone who works in those areas, which suggests how much the economy relies on this sort of economic activity. The lack of construction also impacts lumber yards such as Lowe’s, hardware stores and trade-specific supply businesses.
Rather than just hunkering down and weathering the storm, there is a bold — and perhaps risky — step the state could take to boost the construction sector of the economy. And that is the subject of this week’s The Maine Debate. Join us here from 10 a.m. to noon to discuss the issues; we especially would welcome the comments of those working in the residential construction business.
That bold step is for the state to bond a retrofit of Maine’s oldest-in-the-country houses. The LePage administration, GOP legislators and Treasurer Bruce Poliquin have strongly opposed bonding; let’s be clear that bonding is borrowing at a low interest rate. Democrats want to propose several bonds in the upcoming legislative session, so despite the GOP opposition, the issue is not closed.
A bond might be used to create a program that included grants for improving residential insulation, windows and heating plants, with the money going to low- and middle-income homeowners who could show excessive heat loss. A revolving loan fund also could be created for similar work.
In addition to energy related retrofits — which keep more money circulating in the state by slowing the flow of dollars out of state to oil, liquefied petroleum and natural gas suppliers — the money could be used to improve Maine houses. Leaky roofs, crumbling foundations, sagging floors and rotting sills and siding all could be repaired through a revolving loan fund repaid at a sliding-scale interest rate.
Though there are several funding sources for weatherizing and improving homes in Maine, most are geared to low-income residents. Better houses mean more churning of the real estate market, allowing more mobility within society. And people who want to upgrade their homes will pay more in property taxes, which helps municipal government.
Since the state can’t have budgets that run with red ink, it is unable to do much in the way of stimulus funding. Yet there is precedent for a Maine version of stimulus funding. In the early 1990s during another deep recession, Republican Gov. John McKernan’s administration created and pitched a bond mostly geared toward road work. The administration even called it the “jobs bond.”
There is reason to be cautious about such a housing bond. As has been in the news recently, well-intentioned government-funded programs for converting to new energy technologies and other upgrades can be vulnerable to abuse. They also can be top heavy in administration.
But the housing sector is critical to Maine. Should public funds be used to boost this sector and at the same time “buy” something tangible and valuable in the way of quality housing? Is such funding more risky and less job-boosting than road and bridge work or research and development funded by bonds?
Join us at The Maine Debate.