During the last few months, a 16-member panel has been looking into the state’s housing stock. With an eye toward increasing housing opportunities, it specifically aimed to understand the short-term rental landscape and its impact on the overall housing needs of a year-round population.
The conclusion: The issue is huge, but the opportunities for change are great. But it also depends on where you live. It’s location, location, location, right?
Maine towns and cities need a variety of housing for its residents and workforce. From the western ski towns of Newry and Bethel to the coastal meccas of Bar Harbor and Camden, tourist-driven, seasonal locations have different needs than inland cities such as Ellsworth and Bucksport.
At the beginning of the month, the panel released its findings and offered a series of recommendations to address some of the challenges that were identified.
One takeaway was that for most Maine towns, short-term vacation rentals are not an issue. In fact, only 3 percent of the housing stock statewide are rentals booked for more than 120 days per year. In Bar Harbor, where more than 9 percent of the housing stock are licensed vacation rentals, it looks a lot different.
For Bar Harbor and its 580 registered rental units, 277 (or 7.6 percent) of available housing stock in town, according to the report, are used as vacation rentals for more than 120 days per year.
Compounding the lack of available housing for year-round use, the study also found that housing is also unaffordable in many places. In all counties except Aroostook, the median house price in the state is unaffordable for the median income household.
What can be done?
The commission suggested creating a distinction between owner-occupied rental units and non-owner-occupied rental units for taxation purposes. In other words, if you’re renting a portion of your home while also living there, then you would pay one tax rate, while an investment property without an owner on premise would pay a higher rate. Commissioner Rebecca Graham, representing the Maine Municipal Association, noted, “this removes the investment use of property in a residential setting from driving your grandmother, who lives in the same neighborhood, from her home because of disproportionate tax assessment.”
The recommendations suggested a number of ways to divert funds from taxation and fees toward the creation of affordable housing.
The diversion of tax money and other fees is one way to fund such work, but rather than use the money to create additional regulatory agencies to administer projects, funds should be directed at the private sector in the form of tax breaks and incentives.
A public-private partnership is the best way through this housing crisis. We must incentivize the builders and other tradespeople who already have an infrastructure in place to build housing. If a community can come together to purchase land, and a municipality can write tax incentives for businesses willing to invest in the creation of housing, then builders can do what they do best: build.