Lincoln County’s first-ever housing study, released in May, found population and construction trends have created a housing crunch that may require large affordable housing developments to pause. It concludes that at least 1,048 new year-round units must be provided in the next decade to keep housing from becoming any more unaffordable.
The study was conducted for the Lincoln County Regional Commission by Camoin Associates, a New York-based economic development consulting firm, hired with funds dedicated by the Lincoln County Board of Commissioners last year as part of the county’s five-year strategic plan begun in 2021. The plan lists housing as its top priority.
“We’ve seen the housing situation just get worse and more complicated over the last half dozen years or so,” the commission’s executive director Mary Ellen Barnes said. “We said ‘we’ve got to do something about it … it’s hard to do something, take the first step, unless you understand where you are.”
Lincoln County was historically considered an affordable place to live until about 15 years ago, according to County Planner Emily Rabbe.
Over the last two decades, changes in the county’s demographics and housing production have created pressures that the commission believes will require efforts from towns, outside organizations, and developers to relieve through affordable development projects.
The study found that housing production is slowing in the county and has become mostly seasonal production. Little of that new stock becomes long-term rentals because of the higher profits in the short-term rental market.
Since 2000, the majority of these units were seasonal housing, which makes up three out of every ten homes in the county. This means 29% of the housing stock is seasonally vacant, as opposed to 17% in the state as a whole.
Aside from rental housing, the median sale price for Lincoln County homes has more than doubled in the last five years to $399,000, a rate which income growth has not matched; that figure is too expensive for 75% of households, according to the study.
At the same time, new housing construction has dropped by about 95% in the last decade. From 2000 t0 2010, according to the study, 2,644 units of housing were constructed; in the following decade, that number was 115.
Year-round population growth has held steady in last two decades; within it, Lincoln County’s population is aging and its number of youth declining.
The retiree population is also increasing, a trend that is expected to continue. As the county’s population ages, 2,500 workers are expected to retire in the next 10 years. An estimated 2,926 workers will be needed by 2032, 2,048 of which will be in need of homes.
Looking ahead, the study predicts that close to 19% of the workforce will retire in the next decade, resulting in less housing for people who are still working; 1,635 units would be needed to fill the open jobs this change is expected to produce.
“Demographic projections suggest, however, that there simply may not be enough workers to fully meet this need,” according to the study.
Alongside the workforce, the study identifies housing needs for people employed in Lincoln County who live outside of it, for existing households that are overcrowded, and for young people living with family who would like to live on their own.
The study advises 401 year-round housing units need to be added to the county over the next ten years to keep up with growth, and at least 1,048 year-round units to keep the situation from intensifying. Housing stock with further decrease from aging existing homes, it notes.
“The number over a 10-year period isn’t all that extraordinary,” Rabbe said. “It’s in line with what has been built up over the past several decades in Lincoln County. Really, it’s ‘what type of growth are we talking about?’”
According to the study, meeting this need will require large construction projects in addition to subdividing existing homes, building additional units on existing residential properties, and converting short-term rentals to long-term rentals.
“The portion of total housing demand at the higher end of the price spectrum will be satisfied by the market, as higher-income households will be accommodated through new market-rate construction,” according to the report.
Rabbe said that, though the number of new units to be added sounds high, the county averaged about 1,400 building permits issued per decade in the past.
“When we look at it in the scheme of what has happened previously, it’s not as significant as you might think,” Rabbe said. “It’s just allocating those units to be hopefully more affordable than pulling permits necessarily for second homeowners or larger-scale homes.”
Listed challenges include years when construction numbers did not meet demand, competition for “starter homes” between older residents looking to downsize and younger residents starting out, high construction costs, and few rental units.
According to the study, these factors make attracting developers a challenge for the county.
The possibilities for large-scale development are limited by municipal sewer and water infrastructure, which is only accessible in Boothbay, Boothbay Harbor, Damariscotta, Newcastle, Waldoboro, and Wiscasset. The commission has identified parts of these towns as “potential growth areas” for attracting affordable housing developments where their respective comprehensive plans have allowed for construction.
From the commission’s perspective, larger developments in the towns with infrastructure to sustain them are necessary to address housing needs.
“To make significant progress toward alleviating the housing crunch will require construction of multiple projects of a sizeable scale, conceivably 30 units or more,” the study reports.
Strategies identified by the study to achieve these goals over the next decade consist of working with towns, developing partnerships, promoting regulatory changes, prioritizing sites, and implementing projects.
On the regulatory side, the study suggests rezoning towns to expand growth areas and allowing denser development, limiting application fees and regulatory hurdles for affordable projects, regulating short-term rentals, and developing tax-increment financing districts to support development costs.
Particular investment has been made on the county level so far, and commission staff said they believe partnerships with municipalities and outside organizations such as MaineHousing, the Genesis Fund, and Stepping Stones Housing, Inc. are needed to attract new development within reach of older and lower-income residents.
Since the study was released in May, the county commissioners have allocated $1.5 million of its American Rescue Plan Act funds for an affordable housing investment process designed to attract developers. The process gives organizations who apply $2,000 per affordable unit, with another $1,000 per unit if all units are designated affordable.
According to Barnes, the state affordable housing act L.D. 2003, which aims to expand available units by requiring changes to municipal zoning and ordinances, will not have much effect on the implementation of these strategies.
The required timeline for implementation of the embattled act was recently extended for qualifying towns until next summer.
“It’s complimentary in a way, not new,” she said, noting that the legislation focuses on market-rate unit construction rather than the affordable designations the commission wishes to pursue.
As part of that project, the commission may continue working with Camoin Associates to develop an inventory of sites suitable for development and has made a funding request to hire a land use specialist for three years.
Barnes said that addressing these issues can be particularly challenging for Lincoln County, which has no formal housing authority; her organization, while offering planning services, is not a “decision-maker.”
“The county does not want to get into the construction business,” Barnes said. “We want to get into the creative partnership building business, and matching financing with the needs.”
The full study is available at lcrpc.com.