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#3 – Housing Affordability

The availability of affordable housing across a range of housing types is an important challenge for communities nationwide. New housing trends provide opportunities for residents to start new homes, age in place, build sense of community and combat societal issues such as lack of access to public amenities and growing social isolation.

The following definitions provide a common understanding for this discussion topic:

  • Affordable housing: Affordable housing refers to housing units that are affordable by that section of society whose income is below the median household income. It is rated by the national government or a local government by a recognized housing affordability index.
  • Housing affordability: Keeping housing costs below 30 percent of income is intended to ensure that households have enough money to pay for other nondiscretionary costs.
  • Attainable Housing: The industry definition of attainable, for-sale housing is unsubsidized, profitable housing developments that meet the needs of those with incomes between 80% and 120% of the Area Median Income (i.e., $80,720-$121,080 for a family of four).
  • Workforce Housing: Generally, this is affordable housing for households with earned income that is insufficient to secure quality housing in reasonable proximity to the workplace. The term “workforce” is meant to connote those who are gainfully employed, a group of people who are not typically understood to be the target of affordable housing programs. Workforce housing is commonly targeted at “essential workers” in a community i.e., police officers, firemen, teachers, nurses, medical personnel.

What we know so far (from the Community Survey results and background research work):

HISTORY

  • According to GPCOG data, Falmouth’s 5016 housing units (2017) consist of 82% single-family units. 85% of all units are owner-occupied.
  • Those who rent in Falmouth spend on average 55% of their income for rent and utilities and are therefore considered “severely cost-burdened.”
  • For lower income level individuals and those on fixed incomes in Falmouth there is not enough housing stock to meet demand.
  • The Town has studied the affordable housing issue twice in recent times. A 2007 study recommended that the Town facilitate an affordable housing development on a Town-owned parcel of land. In a follow-up effort, the Town selected property in the rear of the new police station facility for such purposes and chose a developer for the project. The developer proposed  constructing 48 single-family and multi-family units, a number of which would be “affordable.” However, the Town Council could not reach agreement as to how best to proceed and halted this project in 2009.
  • On a smaller scale, the Town has made land available for non-profit affordable housing efforts on an individual-lot basis. The Town donated two lots to Habitat for Humanity of Greater Portland: one on Hadlock Road in 2000 and another on Hartford Avenue in 2007.
  • Falmouth has three Section 8 subsidized rental developments for those 62 and older or disabled. They are Foreside Village on Fundy Road, Blackstone on Squidere Lane, and Foreside Estates. They are privately owned by corporations that provide subsidized housing throughout southern Maine. Each has eligibility requirements, waiting lists, and are not limited to Falmouth residents.
  • A State-sponsored “Section 8 Housing Choice Voucher” program in Falmouth provides rental assistance to income-eligible tenants by subsidizing a portion of the monthly rent and utilities, paying directly to landlords. In 2012, this program helped 10 low-income families in Falmouth.
  • Historically and anecdotally, more Town and School (public sector) employees lived in Falmouth than currently.

RELATED MACRO TRENDS

  • Housing affordability is a critical issue for many communities across the United States. According to the 2021 State of the Nation’s Housing Report by Harvard University, the housing market is currently split into two tracks – those on a rush to purchase homes, and those feeling the effects of the pandemic in danger of losing their homes. For those communities like Falmouth where demand is high and supply limited, people are being priced out of housing options and forced to look elsewhere.
  • In the United States, rental statistics are emerging as key considerations for communities:
    • According to a recent Morgan Stanley report (Aug 2019), millennials and gen z will drive demand for housing – particularly rentals.
    • Renter households over 60 were up by 43% between 2007 and 2017 as retiring Baby Boomers chose to rent rather than buy when downsizing.
  • Smaller homes or apartments that exist on the same property as a single-family residence, Accessory Dwelling Units (ADUs), are playing an increasingly important national role as affordable and flexible housing that meets the needs of older adults and young families alike.
  • Zoom towns: The pandemic has triggered a trend where people are opting for more remote working, and often moving to desirable locations. This is especially the case for technology workers, who can be mobile. These remote workers can often bring with them high disposable incomes. This combination of demand and affluence can drive increases in the value of housing by triggering more demand in these appealing communities. Anecdotally, this dynamic is now beginning to happen in Falmouth.

WHAT IS CURRENTLY HAPPENING IN FALMOUTH

  • In 2016 the Town amended the zoning rules for accessory dwelling units.
  • Avesta expanded the Blackstone project adding 19 units in 2017 in addition to the existing 20 units there.
  • In 2017 OceanView at Falmouth redeveloped the former Plummer School for senior housing. Some of the 30+ units are being rented at reduced rates.
  • Although the land in the rear of the police station remains undeveloped, Habitat for Humanity of Greater Portland has expressed interest in developing a proposal for that site.
  • A 2021 Multi-Family Housing & Land Use Regulation Report by Levine Planning Strategies and GPCOG noted that multifamily housing is permitted with few limiting factors on just over 3.7 percent of the land area in Falmouth. According to the author, these zoning restrictions have contributed to limited multi-family housing construction.
  • Finding affordable housing in Maine in 2021 is more difficult than ever. A tight supply and a huge demand mean housing prices are soaring across the state. Buyers need to be prepared to offer more than the asking price. The pandemic is partly to blame for this affordable housing crisis. More out-of-state buyers are coming to Maine, looking to get away from Boston and New York. An expensive property here can seem like a relative bargain compared to those markets. According to the Maine Association of Realtors, 32% of home sales went to out-of-state buyers last year. In 2019, the number was 25%.

WHAT THE COMMUNITY SURVEY RESULTS SHOW

  • The recent community survey question on housing affordability, framed as ‘Should Falmouth aim to provide more housing that is affordable for lower and middle-income residents, or preserve and enhance existing home values?’ revealed a diverse set of views. The results revealed two concentrated areas at the extremes, with nearly 20% supportive of enhancing existing home values, and nearly 16% supportive of more affordable housing, and with the remaining on the continuum in between.
  • When combining the two future splitting questions about house developments and housing affordability, the community again was split on the two topics:
    • A significant concentration of responses reflected an interest in cluster type developments and offering more affordable housing to lower-and middle-income residents.
    • A second significant concentration of responses reflected a desire to focus on larger individual home lots and enhancing existing home values.
  • Community Survey participants were asked how important expanding the supply of affordable housing will be in shaping the future of Falmouth. 34% considered expansion not important, 35% were neutral, and 31% considered expansion important.

CONSULTANT’S INSIGHTS and POTENTIAL TRADE-OFFS

  • Falmouth is at a real crossroads for housing. Two issues are in play: availability of housing and affordability of housing.
  • Policy settings are such that growth is limited by annual new builds. At the same time, enrollment in public schools in recent years has remained flat or declined as new families are not able to afford available housing stock.
  • In many cases, median income earners who work in Falmouth cannot afford to buy a median-priced home in the community, forcing them to live elsewhere and commute to Falmouth. The impacts of this dynamic can be numerous and range from adding to traffic congestion to distorting the community demographics.
  • Rapidly increasing housing costs can limit options, even for locals. For example, some children who grow up in Falmouth, may eventually not be able to afford to purchase a home in their own community.
  • Home values are often people’s largest asset, and increasing home value adds to net wealth. However, parents who want to downsize after their children leave home, or retirees who what to “age in place,” can have difficulty affording the property taxes, on homes that are appreciating in value.
  • These housing issues have an effect on the demographic character of the community. Who lives in Falmouth? Who can afford to live here? Who should be able to afford to live here? Does who lives in Falmouth have an impact on the well-being of the community?

We would love to hear your thoughts!

Housing affordability will ultimately dictate who lives in Falmouth. By providing a range of housing options, Falmouth could encourage diversity, allow young families and young professionals to be first-time home buyers in the Town, and provide the opportunity for single-family home dwellers to age in place as they downsize.

Do you think the Town of Falmouth should work to ensure long-term housing affordability for future potential and current residents? How should the Town encourage residential growth to accomplish its housing goals without allowing unfettered growth?
Comments made via this portal are public. We expect conversations to follow the rules of polite discourse. Messages containing inappropriate content or language will be removed at the discretion of Future iQ.

12 Comments

The fact that so many people are trying to escape the urban areas should be reason enough for wanting to keep Falmouth as a small rural community. We need to be cautious about falling for the notion that we can only be “good” citizens if we provide housing for all economic levels of Maine residents. There will always be people who work harder and aspire for higher-level housing. Falmouth happens to be a town that such aspiring people move to.
That being said, we first need to know how much affordable housing exists in Falmouth. If we do not know what we have, how can we possibly know what we need? Again, we need hard data, not macro trends
The notion that we can only keep the current level of excellence in our schools by dramatically increasing our population is flawed. Even the wealthiest homeowners barely provide enough property tax revenue to educate their children. Low-cost housing with correspondingly low taxes will only further stress the school budgets thus increasing the tax burden on the rest of Falmouth’s residents. This is a sure recipe for school failure.
An analysis of home sales in the latest non-Covid year (2019) revealed that 12 % of the homes sold met the Maine State requirements for affordable housing. A comparison of Falmouth’s affordable rental housing shows that we compare favorably with the average for towns adjoining Portland. We will never satisfy some groups of affordable housing advocates but in fact, we have nothing to be ashamed of.

With all due respect to Lee Hanchett, I couldn’t disagree more. The concept that our schools are excellent because we have no or little “low tax” base from affordable housing is flawed. Our schools can only benefit from the increased diversity that a greater percentage of affordable housing would likely bring. And if higher taxes result for some (myself likely included), so be it. The education of our youth is well worth it.

Similarly, the premise that a person or family can’t afford housing in Falmouth because he, she or they are not sufficiently aspiring is also flawed and, frankly, shows little appreciation or regard for the struggles of some of our fellow citizens.
I wholeheartedly support increasing affordable and attainable housing in Falmouth for all the reasons set forth above, but most importantly to encourage greater diversity in our largely homogeneous town.

I agree with you, Jesse, that our schools (children) can only benefit from the increased diversity. The more the better, and that housing costs are a drag on developing that diversity.

economics tells us that cost (affordability) is driven fundamentally by demand:supply. All gov can do is influence (some would say distort) via tax/regs: tax high/decrease supply to make more cost – or – subsidize (to give appearance of) or increase supply for less cost. That’s it. Do we really want more supply? a more crowded Falmouth. Do we really want the city subsidizing some people i.e. only city employees but not others? ..or building their own rent controlled units subsidized by higher taxes on everyone else?.. my view is we should control the quality & density – for the most live-able Falmouth possible but that inevitably creates demand and demand will drive up the prices. I don’t think we should chase low pricing as a single minded purpose and sacrifice Falmouth into a high density sprawl… in fact Maine is very affordable the further west one goes – and north. Falmouth can’t change it’s location so if not affordable the dynamic will move demand to less expensive areas which is a natural process and good for those areas.

Agree with James above. It is unrealistic for Falmouth to subsidize housing for lower income housing. Supply and demand will always keep Falmouth home values above other surrounding areas. Maintaining a “rural atmosphere” means limiting dense property developments. Maintaining a strongly financed school system is more important than “forcing” changes in the makeup of those who chose to live here.

MODERATOR COMMENT: It is great to see these conversational threads evolve.
These Discussions Boards are being moderated to match the stated guidelines: “Comments made via this portal are public. We expect conversations to follow the rules of polite discourse. Messages containing inappropriate content or language will be removed at the discretion of Future iQ”. To date, we have had to exclude a number of comments that are critical about people or groups, or are obviously off-purpose (unrelated political commentary; for example). PLEASE remember, these are open community conversations, to which a wide range of people are contributing – including school students. These Discussion Boards are an opportunity for thoughtful, polite and convivial community discussion focused on exploring specific important issues. Please consider ‘tone and content’ before submitting, as we will draw a clear line – and exclude – inappropriate messages. Thank you.

It is great to see so much activity around this topic. I thought I would add a few numbers I found really interesting.

2021
Falmouth median listing price for home (July 2021): $675,000
https://www.realtor.com/realestateandhomes-search/Falmouth_ME/overview

Income to afford a $600,000 home $184,575
Income to afford a $500,000 home $158,812
https://bundleloan.com/blog/600k-mortgage/

2020
Falmouth employee average salary $52,100
Falmouth employee median salary $52,457
https://govsalaries.com/salaries/ME/town-of-falmouth

2021
Falmouth 1st year teacher salary $43,458
Falmouth teacher with 10 years $63,014
https://maineea.org/2021-mea-salary-guide/

Average RN salary in
Portland/ South Portland $71,080
https://ceufast.com/nursesalaryguide/state/maine

I think that the two factions commenting on this page both have valid points. I agree completely with Jesse and Jennifer that we, as a community and school system, benefit when we have a more diverse population – racially, ethnically, socio-economically, and (dare-I-say-it) politically. That said, I also understand and agree with James’ points about about supply, demand, and location being detriments to affordable housing.

Let me try and thread the needle a bit here then – instead of focusing on building subsidized ‘affordable’ housing or building so many single-family homes that further take up Falmouth open space, how about we instead focus on more diverse type’s of housing along our main corridors (Rt. 1 and Rt. 100 primarily). Opening up parts of those corridors to some studio, 1-, and 2-bedroom apartments/condos would definitely provide housing at an affordable level but also wouldn’t take away from many of the things we all love about Falmouth.

Pam’s comment also really struck me because, as the parent of a 2 and 5-year-old, we are thinking about my children’s future with this process. I don’t want them to have to be a lawyer, banker, or surgeon to live in my community. If they want to be teachers, nurses, or firefighters, there should still be some places for them to live in Falmouth.

In order for children to have a better understanding of the world and for adults to be more tolerant despite their political, racial and socioeconomic differences, we need more diversity in our schools and in our neighborhoods. I am uncomfortable with zoning that would allow Falmouth to become even more exclusive than it already is and, based on the number of “Black Lives Matter” signs I’ve seen in our town, I think many residents agree. The answer doesn’t need to be construction of large developments of “subsidized” housing. There are techniques that other communities use: requiring developers to set aside a certain number of units for lower-income buyers, providing reasonably priced town-owned land so first-time buyers can find a home through Habitat for Humanity, and by providing financial incentives so developers will build — as Tom suggests — apartment-style housing on Route 1. According to recent news reports, Cape Elizabeth is now more willing to build lower-cost housing next to their Town Hall after negotiating with the developer over TIF funding. If Cape Elizabeth can be creative, why not us? We just need to make it a priority. We can also change our zoning to accommodate more duplexes and small multi-family units that cost less. Just because they would be more accessible, doesn’t mean they would be Section 8 housing.

Thank you to everyone who participated in this important focus group last night. I really appreciated hearing everyone’s point of view and look forward to continuing the conversation..

Growing up in Cape Elizabeth until the late 60s and really not thinking much about affordable housing, I now try to look back on those times. Like Falmouth, Cape has always had beautiful homes on the water, many homes elsewhere and good schools. Except for the kids attending private schools, my classmates ranged from the wealthy to those struggling to stay in town. Very close to the old high school was a housing development called Elizabeth Park. That neighborhood invited diversity with its many small clustered houses that were affordable. I assume Falmouth is looking to create neighborhoods to do the same.

In the early 70s, I purchased land and a house in Falmouth. This was a new town with its beautiful homes on the water, many homes elsewhere and good schools. Back then, the mixed income levels and home ownership just happened. There was plenty of land for growth.

Today, 50 years later, that mix doesn’t just happen. Today, Falmouth uses focus groups to learn more about housing affordability as well as shared community areas, green and open spaces. Large tracts of land have become those open spaces for all residents to enjoy. To me, that is lovely for those of us who can afford to live here today BUT what about HOUSING AFFORDABILITY? These huge tracts of land are gobbled up, making Falmouth even more exclusive and destroying the possibility for any affordable housing on that land FOREVER. Is that what we want ? Open space and affordable housing should exist jointly. In my opinion, the privilege to create exclusive open space in Falmouth should be granted only if it is balanced with serious, not token, affordable housing. Forget the $400,000 “affordable” condos. Building small houses, small duplexes, and small apartments that remain small, is a good way for the Town of Falmouth to prove that diversity does actually matter.

Thanks,
Paul Strout

Comments are closed.

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