Who can afford to live on MDI?

Editor’s note: This story is the first in a series about the recently released housing study.

BAR HARBOR — House prices have more than doubled on Mount Desert Island since the year 2000, according to a study commissioned by the Island Housing Trust and released in November 2018.

In Bar Harbor, median home values went from $143,100 in 2000 to $320,300 in 2016, a 124-percent increase. One of the factors driving that increase, the study found, was the demand for seasonal homes, which has contributed to making real estate unaffordable to those who work on the island.

Camoin Associates of Saratoga Springs, N.Y. conducted the study, in partnership with The Musson Group of Southwest Harbor. Methods included compiling data from the U.S. Census Bureau and other sources and interviewing employers, town and school employees, real estate brokers and others. Input from the public was also sought at a public workshop in June 2018. Finally, the authors researched possible strategies to meet housing goals.

The study found that 54 percent of those who work on MDI don’t live here, a sharp increase from only ten years ago. Employers said that their employees struggle to find affordable housing, and that translates into difficulty attracting and retaining workers.


Tremont had the lowest median home price of the four island towns in 2017, at $262,000. Homes in the town of Mount Desert were the most expensive, with a median price of $370,000. Median home prices in Southwest Harbor and Bar Harbor were $329,250 and $355,875 respectively.

The rise in median house prices has outpaced the rise in incomes across the island, which rose by less than 50 percent.

In 2017, median household incomes in island towns ranged between $46,000 (Tremont and Southwest Harbor) and $70,000 (Mount Desert), with Bar Harbor in the middle at $53,000.

“Over 78 percent of MDI households were unable to afford the median home in their respective towns,” the study reads. This is according to the Homeownership Affordability Index, which defines affordability as the ability to pay mortgage, taxes, and insurance using no more than 28 percent of gross income.

Not everyone agrees with that calculation, however.

“I help a lot of people with income around this median income afford homes in Bar Harbor every day,” real estate mortgage broker Sherri Dyer said at a public hearing in Bar Harbor earlier this year. “No one follows this housing ratio any more. With that type of median income, people can be approved [for] a sales price of around $350,000. If they have a car payment, it might be closer to $280,000. People are buying houses in Bar Harbor.”

That people buy houses in Bar Harbor or on MDI is not refuted by the study. In 2016, 144 homes were sold on MDI, at a median sale price of $337,000. The majority of those, 64, were sold in Bar Harbor.

School enrollment

Compiling other data including median income, commuting patterns and school enrollment records, the authors of the study attempt to parse who is buying those homes. What they found was the age range on MDI “skewing older than Maine and the US,” and school enrollment falling. That’s been a concern of some town officials, who worry about a “hollowing out” of year-round communities.

Between 2013 and 2017, enrollment at Conners Emerson School in Bar Harbor dropped 9 percent, Mount Desert Elementary School saw a 2-percent decline and Pemetic Elementary School in Southwest Harbor saw an 11 percent decline. Enrollment at Tremont Consolidated School rose 15 percent.

MDI’s seasonal population is growing faster than its year-round population. The study found that, between 2011 and 2016, the year-round population grew by about 200 people. In that time the seasonal population grew by nearly 900, or over 14 percent.

Thirty-six percent of all housing units on Mount Desert Island are seasonal homes. By contrast, seasonal homes make up 17 percent of housing stock in Maine overall, and only 4 percent nationwide.

“In the last few years,” the study stated, “most new housing construction has been for seasonal residents and/or seasonal workers.”

Also, “conversion of year-round housing units to seasonal working housing further constrains the supply of year-round housing stock and contributes to rising housing costs.”

Rental units

The study noted the financial incentive for landlords turning units into vacation rentals rather than year-round rentals. Comparing standard monthly rental rates to standard weekly vacation rental rates, the study found that “a landlord can make about as much income from 10-12 weeks of summer rentals as from a year-round rental of the same unit.”

Also, it says, “many towns do not regulate or track seasonal or weekly rentals.”

The small sample of year-round rentals, fifteen percent of which were subsidized housing, made it hard to accurately measure rental affordability on the island.

However, based on the small sample, Mount Desert and Southwest Harbor were deemed the most affordable towns, with median rents of $929 per month, and $726 per month, respectively. These rents matched the median incomes in renter households: $57,731 in Mount Desert, and $44,464 in Southwest Harbor.

Bar Harbor’s median rent, $892, was calculated to be a financial strain with the median household income among renters: $28,359. Tremont’s median rent of $798 was also out of reach for renter households with a median income of $19,833.

According to the study, constraints to developing affordable housing include the lack of suitable land to build on, since the national park and other protected areas such as wetlands are off limits. Costs of land and construction are also higher than off-island.

The authors are careful to say the document “is not meant to prescribe what IHT and its partners should do, but instead to describe what they can do.”

Suggested goals and strategies fall into two categories: reducing the costs of housing development, and increasing housing supply with overall goal of making homes affordable “for MDI’s median-income workers.”

Suggestions to reduce development costs include seeking land donations for workforce housing development, implementing affordable housing Tax Increment Financing (TIF), changing zoning ordinances to allow for greater housing density and investing in infrastructure.

Suggestions to increase the supply of year-round housing units include partnering with affordable housing developers, creating seasonal housing units (so seasonal employers no longer convert year-round housing to that purpose) and limiting short-term vacation rentals.

IHT representatives have said they hope a committee with representatives from all four island towns could be formed to help implement some of these policy suggestions.

Support for the housing study came from the towns of Bar Harbor and Mount Desert, residents of Southwest Harbor, Harbor House, Maine Coast Heritage Trust, Mount Desert 365, The Jackson Laboratory and a grant from the Hancock County Fund of the Maine Community Foundation.

Becky Pritchard
Former Islander reporter Becky Pritchard covered the town of Bar Harbor and was a park ranger in Acadia for six seasons.
Becky Pritchard

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