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Maine needs at least 84,000 new homes within seven years, study says

A for sale sign is displayed in front of a house in Westwood, Mass. Home prices hit a new record in October as the number of homes for sale hit an all-time low.
Steven Senne
/
AP
A for sale sign is displayed in front of a house in Westwood, Mass. Home prices hit a new record in October as the number of homes for sale hit an all-time low.

A first-of-its-kind study paints a sobering picture of Maine’s housing market.

The state needs as many as 84,300 new homes of all kinds within the next seven years to meet current and future demands. And the study concludes that failing to build or reinvest in more homes may have serious implications for Maine’s labor force and economy.

The numbers, state officials acknowledged Wednesday, are daunting.

Maine needs nearly 38,500 more homes today, and an additional 37,900-to-45,800 new homes by the end of the decade to expected demands. The study, released Wednesday, was commissioned by MaineHousing, the Governor's Office of Policy Innovation and the Future and the Maine Department of Economic and Community Development.

A chart from the State of Maine Housing Production Needs Study shows the number of new homes needed today and by the end of the decade in each region.
Courtesty of the State of Maine Housing Production Needs Study
A chart from the State of Maine Housing Production Needs Study shows the number of new homes needed today and by the end of the decade in each region.

"Clearly we have a challenge in front of us that's greater than anything that we've experienced before," Greg Payne, the governor's senior adviser on housing, told reporters Tuesday afternoon.

Past research has only looked at the state's existing housing stock; never before has the state projected how many homes it will need in the future. And though Maine recently has made historic investments in housing, it's not enough.

"The availability of homes is declining, and prices are increasing, making it difficult to access and afford homes across the state," said Christiana Whitcomb, one of the study's authors with the consulting group HR&A Advisors.

Housing development in Maine has dipped in the past, and many of Maine's existing homes are aging. At the same time, the state has seen a sudden rise in the number of asylum seekers and people from other states moving to Maine.

Those factors have compounded to the point where there's little housing supply, and what is available is unaffordable to many Mainers, Whitcomb said.

"Some places in Maine with smaller communities, there literally are no homes to buy or rent if you need to," she said.

The average household now needs to earn at least $100,000 a year to afford the median home price in the state, nearly double the income needed just about five years ago.

A graph from the State of Maine Housing Production Needs Study shows how average median home prices have risen dramatically in recent years and have not kept up with increases in household earnings.
Courtesy of the State of Maine Housing Production Needs Study
/
MaineHousing
A graph from the State of Maine Housing Production Needs Study shows how average median home prices have risen dramatically in recent years and have not kept up with increases in household earnings.

The consequences of failing to add or reinvest in more homes could be dramatic.

"You'll continue to see growing affordability problems. What you'll also continue to see is growing challenges for Maine businesses to actually hire and retain workers," Whitcomb said.

Maine has 46,000 open jobs, according to the analysis.

"Without homes that are affordable to what those jobs pay, Mainers will have a hard time taking those jobs," Whitcomb said. "People will have a hard time coming from out of state to take those jobs and actually sustain the businesses that Maine already has now, let alone any future economic growth."

Housing officials say the message is simple: Maine simply needs more homes of all types, sizes and price points. To add at least 84,000 new homes by 2030, the study suggests that municipalities will need to roughly double the number of building permits approved each year.

"It's going to take a lot of long-term planning to create more housing and at the same time avoid sprawl, and preserve that sense of place that is so important and that is one of the special things about the state of Maine," Gov. Janet Mills said Wednesday at an affordable housing conference in Portland.

Maine must create more housing, Mills acknowledged, and she said it's time to think outside the box.

"We need to be thinking more about transforming existing office buildings that may be less necessary than before, with fewer people commuting and number of people working remotely," she said. "We need to think about multi-use and adaptive uses and continuing to look at the reuse of existing structures, like schools, older schools and older buildings."

State senior housing adviser Greg Payne said he's hopeful the study will serve as a call to action for state policymakers and for private developers and investors.

"So much of this work is going to have to be about changing the conditions on the ground that allow the private sector to build more of the housing that we so desperately need," he told reporters Tuesday.

Because the study doesn’t detail how many and what types of homes might be needed for different populations, Payne said it'll also be up to municipalities to determine over time what kind of housing makes sense for their communities.