November 10, 2019
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Portland wants to build more ‘workforce housing,’ but that won’t guarantee it’s affordable

BDN | BDN
BDN | BDN

PORTLAND, Maine — Faced with a housing crisis and a dwindling middle class, the city is desperately trying to build more housing.

Last week, city councilors approved the Metro Regional Coalition Council Resolution to build 2,557 new housing units over the next 10 years. Plans call for the construction of 256 new units per year in the next decade. Between 136 and 159 of them are expected to be “workforce housing” units, capped at market rates.

The problem: Most workers in the city still won’t be able to afford them.

A city housing report released last week showed workers employed in many of the largest job sectors — including the average Portland worker who earns $51,800 a year — cannot comfortably afford the median housing costs now, based on standard income ratios and other calculations.

The median home price in the city is currently more than $308,000, with rents averaging $1,050 month for a one-bedroom unit. Portland home values have gone up 2.3 percent over the past year and are predicted to rise incrementally in the next year.

Nick Schroeder | BDN
Nick Schroeder | BDN
A building at 60 Parris St. has one-bedroom workforce housing condo units that sold for $215,000 in the spring. Workforce housing units for sale are capped at 120 percent of the area median income of $65,100 for an individual as set by the Housing and Urban Development.

Despite a wage that is rising modestly for some Maine workers, incomes are not keeping pace with the climbing costs of housing in Portland.

“What you’re seeing now, there’s a number of people moving to the high end [of the income bracket], making over $75,000, and a few more people moving to the low end, but the middle is deflating,” said Chris Hall, director of regional initiatives for the Greater Portland Council of Governments.

So why isn’t the city building more affordable housing for that sector of the workforce?

One reason is that type of housing carries a stigma that rouses some homeowners concerned about depreciating property values in their neighborhoods. Hall said developers often pitch affordable housing projects aimed at lower-income residents that are not warmly embraced in communities.

“There’s an assumption that ‘workforce housing’ sounds less threatening to ‘not-in-my-backyard neighbors’,” said Christian MilNeil of the Portland Housing Authority’s board of commissioners. “Sometimes the city [and developers] will say ‘workforce housing’ as a euphemism for housing that might be affordable to middle-income wage earners, like teachers … but wouldn’t be affordable to someone living on Social Security income.”

But workforce housing essentially means these properties are set at market-rate prices. A one-bedroom “workforce” unit could still cost as much as $1,627 a month.

In Portland, that rate would put a squeeze on workers making less than $65,100 per year, using HUD affordability formulas. Couples without children would have to earn $74,400 to comfortably afford a workforce unit, while a family of four would need to bring in $93,000 a year to comfortably afford it.

Both workforce and affordable housing rates are indexed to the area median income (AMI) of Portland’s housing market area, which includes the 24 municipalities that comprise its metropolitan statistical area as defined by HUD.

But nearly half the jobs in Portland’s economy do not pay workers enough to afford those rates without other sources of income, or help from roommates, according to the housing study released by the city last week.

Office staff, food workers, and those employed in production/manufacturing, landscaping, housekeeping, community and social services, protective services, installation, construction and transportation all earn considerably less than the AMI, and would largely be strained by workforce housing rates.

“If [the city] were using AMI to increase property taxes to expand social services, that’d be one thing, but low-income people are being squeezed because social services are being cut,” said Aaron Berger, a tenant representative on the city’s newly assembled Rental Housing Advisory Committee.

According to Greg Payne, director of the Maine Affordable Housing Coalition, the greatest housing needs in Maine are for minimum-wage workers and those in service-industry jobs.

In 2017, 1,600 households applied for assistance for low-income units in Portland, according to the city’s latest housing report. Only 119 of them were placed.

And even if the city adds more than 2,000 “workforce” units in the next decade, the initiative will do little to close the housing gaps for the most vulnerable populations.

 



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