There is no one solution to the housing crisis in Maine. That's the message of Doctor Chris Herbert, managing director of the Harvard Joint Center for Housing and keynote speaker at a conference of real estate professionals in Portland this week.
Morning Edition Host Irwin Gratz spoke with Herbert, who says on top of the rising cost of building materials, there's a shortage of affordable land and stubbornly high interest rates.
This interview has been edited for clarity.
Hebert: So if you think about where we were in 2021-2022 when the Fed started to raise rates, interest rates were at 3%. Now mortgage rates are 6.3% and house prices are higher than they were in '21-'22 so they'd have to get down to 3% or 4% again to be affordable at the level they were. And I don't think we're gonna get there anytime soon.
Gratz: Maine's Legislature has taken a few steps in the last couple of years to encourage more affordable housing. Are there examples you've seen in other states that could be a model for Maine?
You know, I think the things that Maine has done — to allow for accessory dwelling units; to allow for multiple homes on smaller sites, sites that are well serviced by water and sewer; allowing for that higher density, smaller housing — they haven't had a chance to really work yet. I think that allowing that greater infill density — in a state like Maine, you're not going to get a lot of 6-, 10-, 12-story buildings. What you're going to have to do is infill in that lower-density area you have. So I would give the things that Maine has done time to work.
Could innovations like modular home construction or even 3D printing be a part of the solution?
Yes, but I think so far, we found that there are limits to how far that will go. Part of it has to do with the scale the factories can get to. In order to have low cost, you have to have, like, Ford Model Ts rolling off the assembly line at the rates of thousands. And housing doesn't get built at that scale. I will say one of the solutions is sitting right in front of us, and that has achieved that scale, is the good old HUD-manufactured home. That factory-built housing is actually much more cost effective than stick-built, site-built housing. In a place like Maine, it could really fit in well. It has a stigma. People think of it as a trailer and as a mobile home. The new manufactured home, you couldn't tell the difference between it and a ranch home, and it really is more affordable to build.
Yeah but the other problem we've run into there, and the Legislature is trying to address this as well, is that suddenly the land that people lease for these are going way up.
I do know that Maine has passed some laws around right of first refusal. Massachusetts has had those laws, and they've worked really well. But I think if what you really want to do is give people an opportunity to build wealth, thinking about getting them on their own land is also still an important avenue.
Do we need people to be thinking differently if we're going to get at the housing crisis?
We do, and I think a lot of times the arguments about changes in housing are talking about units, and they're talking about affordable units, and they're not talking about people. Oftentimes, when we do think about those people, we tend to make them the "other." But I'll tell you, I live in a wealthy suburb in the Boston area where housing prices have gone through the roof, probably not unlike a lot of areas around Portland. And I think one of the things that's getting people open to the idea of broader range of housing is the fact that when I get to retirement and I want to stay in that community, I can't afford it. The taxes have gone through the roof. My friends are there, my church is there, my doctor is there. And so where do I go? The other thing that happens is your kids. So you want your kids to come back to town and they don't have a place to live. The housing market right now is not working for anyone, for the most part. And so I think, you know, we have to think about, how do we make room for our community, our family, our friends, to have a place to live here? And that's — personalizing and humanizing the story, I think, is important.
