AUGUSTA, Maine — A bill to create an $80 million affordable housing credit to preserve rural housing cleared the Maine Legislature on Thursday after receiving a boost from Gov. Janet Mills last month and gaining bipartisan support last year.
The idea behind the measure proposed by Assistant House Majority Leader Ryan Fecteau, D-Biddeford, is to encourage the creation of affordable housing by using state and federal dollars to provide investors with a refundable credit on their state income taxes.
The $80 million will be spread out over eight years, not four as proposed in an initial version. It passed the House and Senate without roll-call votes on Thursday. Mills, a Democrat, said in her State of the State speech last month she would sign it if lawmakers sent it to her desk and could sign it next week.
At least 50 percent of the credit would be used to develop new rental housing for seniors and multifamily housing in rural areas. The Maine State Housing Authority, which will be administering the program, would provide incentives to ensure at least 20 percent or four units — whichever is greater — in a new project would be given to someone who has been chronically homeless, disabled or a survivor of domestic violence.
It also requires housing projects to repay a portion of the tax credit if the project doesn’t remain affordable. The housing authority can place a lien on the project if the money isn’t repaid.
Maine, like the rest of New England, is in an affordable housing crunch, according to the National Low Income Housing Coalition’s annual survey of rental rates. The coalition found that a person would need to make nearly $20 an hour to afford a two-bedroom rental unit, making that the 21st highest wage in the nation.
Affordable housing is housing that costs no more than 30 percent of a household’s income, according to the U.S. Department of Housing and Urban Development. Under the bill, projects that qualify for the program would have to set aside at least 60 percent of its units for households with income at or below 50 percent of the area’s median gross income.
A waiting list for affordable units currently has 17,000 people on it, according to the Maine State Housing Authority. At the same time, 2,500 affordable apartments with rental assistance could be lost by 2030 as a U.S. Department of Agriculture program comes to an end, according to the Brunswick-based Genesis Community Loan Fund. Roughly 10 percent of the proposed tax credit program would be used to purchase at-risk affordable units.