AUGUSTA, Maine — Maine needs to nearly double annual housing production through 2030 to fix historic underproduction and meet expected population growth, according to a landmark report released Wednesday by state agencies.
The study was conducted as a result of a housing overhaul passed by the Maine Legislature last year. It was released by the administration of Gov. Janet Mills and MaineHousing, the state’s housing authority, ahead of an affordable housing conference in Portland on Wednesday.
It reveals a staggering gap between the number of homes permitted in relation to need. Over the last five years, an average of 4,800 Maine homes per year were permitted. The study found that 76,400 to 84,300 homes will have to be built statewide by 2030 to support both existing and future residents, a target that will frame discussions about the housing crisis here.
That adds up to an additional 3,700 to 4,500 homes that will need to be permitted each year, which is between 77 percent and 94 percent more than current levels. Along with the nation, Maine has been ramping up housing production over the past decade, but the state has not permitted that many homes since the mid-2000s.
Annual building permits are not an exact measure of housing production because not all permits are built. But Maine has long lagged in producing enough housing for its existing residents, and the wave of migration here during the COVID-19 pandemic has exacerbated the housing crisis.
The homes that Maine needs are about evenly split between being for a result of historic underproduction and a deficit of homes that are going to be needed over the next few years for the workers that will fill job vacancies and support the economy.
Between 37,900 and 45,800 homes would need to be built just to accommodate that projected population, the report says. Both the increase in remote workers seeking a higher quality of life and international immigration fed that influx of residents, Christiana Whitcomb, who prepared the report with the consultancy HR&A Advisors, told reporters on Tuesday.
“That has also been largely households who make higher incomes than existing residents, which means they have had, sort of, a competitive edge in Maine’s housing market,” she said.
MaineHousing found that the income needed to afford the median home was $106,225 in 2022. That’s about a 34 percent increase from 2021, meaning housing prices are rising far more quickly than wages. The median household in Maine makes just $36,000, Whitcomb noted.
Next steps for policymakers are unclear. The findings are “daunting,” Greg Payne, Mills’ senior housing adviser, said. The Democratic governor’s office has not drafted any legislation based on the report’s findings, but it will need to work on developing a labor force that can build the homes required at a time of historic labor shortages, he added.
The study’s authors discuss setting production and reinvestment targets at the local level to construct needed homes. The largest share of homes needed are in a coastal region stretching from Hancock to York counties, including Cumberland County. More than half of all the homes required — between 45,000 and 49,200 — are in that swath of Maine.
While Payne said that the state doesn’t intend to “foist” targets on localities, the Mills administration will meet with regional leaders to discuss what production goals will look like in their municipalities.
Local officials may not appreciate any top-down approach. The overhaul that Mills signed into law in 2022 that would require cities and towns to meet standards on housing was opposed by the Maine Municipal Association last year. It was watered down due to those types of concerns, but the measure still allows two units on lots zoned for one among other changes.
That law, L.D. 2003, will begin to be implemented in cities and towns with a council form of government in January 2024. Municipalities with a town meeting format must comply by July 1.