State housing officials are warning that a slowing real estate market, and legislative requirements, could diminish revenues for assistance to shelters and other housing initiatives.
The Housing Opportunities for Maine Fund relies on the state's real estate transfer tax to fund several programs, including shelter, rental and homeownership programs.
MaineHousing spent more than $26 million from the fund last year. But the agency's Erik Jorgenson said that with home sales declining this year, the state is forecasting that could fall by $7 million next year, compared to 2022 levels.
In addition, the Legislature recently required that 25% of funds from the program be spent on new housing construction. Jorgenson said that while development is an important priority, the Legislature has already appropriated a significant amount of funding toward new affordable housing in recent years, and noted the requirement could threaten allocations for other programming, including assistance for shelters.
"Shelters are a critical issue right now. All the other things that this fund provides for — emergency home repairs, lead remediation, first-time homebuyers' assistance — all these things are pretty critical. So there's no good place to cut from this fund," Jorgenson said.
Jorgenson said the agency is hoping that the Legislature will address the issue in the upcoming session that begins next month.
"This year, I think this problem has erupted to a point where we've really got to think about what levers might we have that we could pull to improve the situation in the fund, which would then make it easier for us to fund things like shelters, and all the other things that we do out of that fund, that are important," Jorgensen said.
Last year, about $5.8 million from the fund was spent on shelter assistance, $1.7 million was spent on rental assistance, and $4.6 million went toward homeownership programs. More than $6 million was used for housing development.
