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Federal tax changes would ease Maine's affordable housing shortage, says one developer

A group called "Up for Growth" released a study last month that found Maine was about 9,000 affordable housing units short in 2019.

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Aimee Koch Grindon/Polychrome Co
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Avesta Housing
Dana Totman, president of Avesta Housing.

The Portland-South Portland region alone was said to be some 8,000 affordable housing units short.

Morning Edition Host Irwin Gratz talked recently with Dana Totman, President of Avesta Housing, who says the problem is much worse and the solution requires more government funding:

This transcript has been lightly edited for clarity.

Totman: Here in Maine, during the 1970s and early 80s, we were adding on average 1,100 affordable apartments each year. And for the last 10 years, we've averaged about 300. It was a major change in policy occurred in the 80s, where the government stopped investing in the creation of housing, whether it was through the rural development Department of Agriculture, or whether it was the HUD Section 8 program, or public housing, sort of walking away from that investment. And instead, having a new program that's run through the IRS, a tax credit program, just decrease that production incredibly.

Gratz: That's interesting, because a lot of the talk these days about housing is focused on other factors, zoning, construction materials, the labor shortage. Are these part of that? Or are you telling me that the problem is different from what people perceive?

I think the problem is far bigger than what people perceive. And it's going to take a far bigger investment and intervention by the government to have a significant difference. There are a lot of little things that help. And all of those little things contribute a little bit more to helping with affordable housing, such as those zoning changes, such as some state resources that have been added, such as some municipal assistance. Certainly, there's been some monies raised during the pandemic -- all of that helps. But we're really sort of nibbling at the edges. And so, yeah, we're doing a little bit better nibbling at the edges with all these programs, and they're all great, and we support every one of them. But the problem is so huge, that it's going to take a whole lot more to tackle this in a meaningful way.

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So what is the best to have in the pipeline at this point? How much more can you be doing in the next few years?

One of the problems that we as a country have have sort of created for ourselves is our housing policy is largely being run through tax policy. And for many years, and it's still true today, that really our country's biggest investment, and those that benefit the most are people that have mortgage interest deductions. And that's helping high-income people. And if just a small portion of that mortgage interest deduction, for instance, was not deducted and came in as money, and it was redirected to poor people, our housing challenge would change like that. And so I think one of the things that we at Avesta and others need to do is keep our eye on federal policy, particularly tax policy, to ensure that we can start to really invest in housing in a big way. So we as an organization have strongly advocated at the state level for more affordable housing, and there's been a lot of recent things that are great from appropriations to state housing tax credit programs to the zoning pieces. The state's doing a pretty good job, I think, here in Maine, and far better than the rest. You know, at the federal level, not so much. And so I think the federal level is going to have to change, and I think our energy needs to be focused there.

There's a lot of criticisms of kind of ordinary folks who in the process of just following their natural inclination to defend their property values, or the kind of look and feel of their neighborhood, their resistance to change, that all of those things have become major barriers to housing development anywhere. Is that a major problem for us here?

My experience over the years here is that the resistance to having affordable housing built in local municipalities has gone down. That I think increasingly municipal leaders and and significant groups of citizens acknowledge that we need more affordable housing. And there still are those occasional and somewhat high profile NIMBY battles that occur, but it used to occur and the the NIMBYs would always win. Now, there's oftentimes a counterveiling force that sort of says 'No, we need affordable housing in here.' We've had some developments we've done recently with no opposition whatsoever, which is really encouraging

The state has directed some federal block grant money to affordable housing. But the numbers in the 2021 action plan reinforce the magnitude of the problem. It says the state will build, or rehabilitate 600 units of affordable housing, at a time when the "Up for Growth" report says Maine's affordable housing shortage is closer to 9,000 units, and, according to Totman, probably more.