June 25, 2018
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If you work in the midcoast, can you find an apartment or afford rent?

By Tom Groening, BDN Staff

BELFAST, Maine — Katie Sibley expects to work long hours at her new job. As an assistant district attorney, it’s par for the course — lots of cases, lots of files to review to be ready for court each Tuesday morning.

Sibley, 27, would prefer to start and end her day in Belfast where she works at Waldo County Superior Court, but she couldn’t find an affordable place to rent in or near downtown. A two-bedroom place near the Passagassawakeag River a mile or so from downtown seemed ideal, but the $1,200 monthly rent, with nothing included, was too steep.

She’s happy with the Main Street apartment she found in Rockland, but the location adds more than an hour of commuting to her already full day.

“I really enjoy the location,” she said of her apartment, which is near parks where she can walk her 8-year-old Lab, and also near restaurants. “It seems to be hard to find a place to rent in the whole midcoast area,” Sibley said Tuesday, her second day on the job.

If young professionals like Sibley, and the people her age who work in the coffee shops, pubs, restaurants and boutiques in coastal downtowns are unable to afford or find a place to rent, the social, cultural and economic vibrancy of those communities could be in trouble, experts say.

Belfast, Camden and Rockland all retain their attractive 19th century brick buildings. But by one measure, Belfast is markedly different than its neighbors to the south.

The rental market in Belfast has grown tight, favoring landlords. In Camden and Rockland, the demand for rentals by qualified tenants — that is, those who earn enough money to afford the rent — is down, favoring renters.

These trends, which property managers say have held sway for several years, are tied to underlying economic factors.

“Certainly, to make a vibrant downtown and a vibrant community, you need a mix of people and certainly you need people who don’t drive out of town at the end of the day,” said Jane Lafleur, executive director of the Friends of Midcoast Maine, a Camden-based nonprofit that advocates for downtowns and good planning.

A sign of a healthy downtown, she said, is seeing people strolling on the sidewalks in the evening, patronizing restaurants, movie theaters, bookstores, coffee shops and pubs. Often, it is younger adults — those 23-35 — who embrace such ways to spending evenings, she said.

But without jobs for those younger adults — both entry level for those with high school diplomas and higher-skilled positions for college grads — the glut or dearth of rental housing is moot, Lafleur said.

The ramifications also extend beyond keeping downtowns lively. In Rockland, where rents have held steady for many units, the lack of revenue growth has meant landlords are unable to invest much in maintaining and improving their buildings. At the other end of the spectrum in Belfast, a dearth of available apartments downtown can stall economic activity at businesses that need workers.

Belfast’s boom

“There’s a shortage of quality rentals in Belfast,” said Sam Mehorter, who has been in the real estate business for 21 years in Belfast. Through his Hometown Real Estate & Property Management business, Mehorter manages 44 properties, mostly in and near Belfast.

“I have a list of people looking — good people,” he said. “For the last year, it’s been humming.”

Mehorter echoes Lafleur’s point about the connection between jobs and rentals, and points to some business growth in town. There’s AthenaHealth, a company that manages paperwork for medical practices. The company continues to add to its triple-digit work force in the former MBNA building adjacent to Route 1. Bank of America, which purchased MBNA, also operates credit card back-office functions in the same complex.

Then there’s the Front Street Shipyard, a waterfront business that works on high-end pleasure boats. It opened a year ago and employs dozens. Yacht owners also have expressed interest in renting in Belfast to have access to their boats during the warm months, Mehorter said.

He also has witnessed Waldo County General Hospital bringing in physicians, nurses and technicians, many of whom want to rent before buying a home.

All four businesses have recruited employees from outside the area, so commuting is not possible for all new hires.

Another trend Mehorter has seen is people of retirement age selling their homes and renting, and especially seeking first-floor living.

Tenley Mossing of By-the-Bay Property Rentals in Belfast, a 25-year veteran of the business, said home foreclosures have affected the rental market.

“I’m seeing a lot more people losing their homes and choosing to rent,” she said.

Mossing owns and manages about 14 units and places tenants in another 15. She, like Mehorter, has seen the impact new jobs at AthenaHealth has had, increasing demand for rentals.

Income-eligible only

Unlike the dynamics of other markets, the rental economy includes more than the supply of housing and the demand of tenants. Prospective tenants must be able to afford rent, including, in most cases, coming up with the first and last month’s rent and a security deposit. Landlords these days ask about a prospective tenant’s employment, income and references.

Sumner Kinney, who operates Kinney Rentals in Rockland and Thomaston, is blunt about what he sees.

“Our problem is finding quality tenants with jobs who can pay a decent rent,” he said.

The key is “jobs, jobs, jobs,” said Kinney, and the lack of those jobs has made the rental market soft. It was different back in the late 1990s and early 2000s, he said, when credit-card lender MBNA was expanding in the area. “Back then, it was a seller’s market,” he said.

Kinney also complains about a Rockland regulation that requires rental properties with two or more units to meet a strict code.

“They’re more stringent than the state,” he said.

Jeff Weymouth, who with his wife has been a landlord for 42 years in Camden, operates Megunticook Property Management. The couple owns 80 apartments, some that are subsidized by federal housing funds. He echoed Kinney’s observations.

“I have a hard time finding young people with a credit rating to get in,” he said.

Local economic factors

Waldo County’s unemployment rate in April was 8.6 percent, higher than the 7.4 percent in Knox County, suggesting that Rockland and Camden lack the kind of jobs young people need to enter the rental housing market. And according to MaineHousing data, an average rental unit costs about $100 more in Camden and Rockland than it does in Belfast.

In 2009, the average two-bedroom rental cost $786 per month in the Greater Belfast area, while the median earner could afford only $755, leaving nearly 500 households unable to afford that rent.

The numbers are computed assuming that no more than 30 percent of a household’s income is devoted to housing, including utilities.

In Camden, the average two-bedroom rental in 2009 was $844 per month, while the median-income tenant can afford only $725. In the Camden area, that means 427 households, or 57 percent, are unable to keep their rents under 30 percent of their income.

In Rockland in 2009, the average two-bedroom rental goes for $865 per month, while the renter household earning median income can afford just $638, leaving 967 families unable to afford that rent.

Roxanne Eflin, director of the Maine Downtown Center, part of of the Maine Development Foundation, said “having a mix of the four different quadrants of housing is really important.” Those quadrants are: affordable rental units often supported by government subsidies; market-rate rentals that tenants of middle income can afford; affordable owner-occupied homes, geared toward first-time buyers; and market-rate owner-occupied homes at the higher end of the cost spectrum.

Ideally, each type should be represented equally, Eflin said. Because Maine downtowns are so small, the ideal percentages can change radically and quickly. Gentrification is one way, when retirees buy up houses and renovate them into high-end homes.

“The building stock is the other problem,” Eflin said. The upper floors of three- and four-story buildings typically are under-developed. Owners are reluctant to take on the big investment required to transform them into housing units.

The lack of affordable housing became a concern for community leaders in towns like Camden and Rockport 10 years ago, when an influx of retirees and others began buying homes near the water, driving up costs elsewhere in these coastal towns. Camden’s town manager at the time could not meet the ordinance requiring her to live in town because house prices were out of her range, Elfin said.

The same observation has been made about town office staff, teachers, firefighters and police officers.

But Lafleur of the Friends of Midcoast Maine says that’s only part of the story. Entry-level rental housing is critical, particularly for the 23- to 35-year-olds.

“How do we bring them back into our towns? As a community, we should want people walking around. You need people living above stores and restaurants,” Lafleur said.

The three-way mix of available and affordable rental units, people who want to live and recreate in downtowns, and jobs for them to support themselves is critical for these three coastal communities, she said.

Beyond creating jobs that range from entry level to professional, one focus community planners can take is encourage downtown building owners to develop apartments in the upper floors, using state historic building renovation tax credits, Eflin said. The process often is not as daunting as some believe, she said.

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