MPBN | Special Panel: MaineHousing Costs Not a Simple Issue

State Treasurer Bruce Poliquin continues to hammer away at the Maine State Housing Authority for what he says has been its failure to control the costs of low income housing projects. A special state panel on affordable housing briefly considered the treasurer’s objections, but has concluded that concerns about cost drivers in public housing are only one aspect of a complex puzzle.

A decision by the Maine State Housing Authority to pursue affordable housing projects that rely on federal tax credits has been assailed by state Treasurer Bruce Poliquin as an example of wasteful government spending.

But state Sen. Nancy Sullivan, a Biddeford Democrat who serves on the so-called Blue Ribbon Commission on Affordable Housing, says there are bigger issues involved. “I truly believe there was a different feeling today, that maybe this isn’t such an easy thing as just looking at the cost per unit,” she says.

Treasurer Poliquin said MaineHousing’s proposed 38-unit Elm Terrace low-income apartment in Portland had a per-unit cost of $314,000, when median home sales prices are about that that amount. MaineHousing officials say the actual per-unit costs are around $260,000, and that federal financing regulations, such as those guiding historic tax credits,
influence the cost.

Republican Sen. Thomas Martin, a Benton Republican, says he now has a greater understanding of how tax credits can affect the cost of public housing projects.

“When they’re saying $310,000 for one unit, and you can build three of them for the same thing as a stand-alone building, well of course it seems to make sense,” Martin says. “But what they failed to figure out is that they would lose $110,000 worth of historical tax credits if they didn’t build in a historical building, but it still means you’re spending almost $200,000 per unit when the baseline is 70 to 80.”

State Rep. Andre Cushing, a Hampden Republican and commission co-chair, says his panel will highlight some aspects of the federal financing of public housing projects to give lawmakers more insight into how the process works. Cushing says that while financing vehicles for public housing construction are important, they shouldn’t drive the housing process as much as they do now.

“We want to look at this from a substantive issue and say, ‘What makes some of those units so expensive?'” he says. “Because clearly there are ways that private industry has been able to be creative and lower their costs while still providing good quality housing. We don’t want substandard, but we certainly also don’t want to have to drive costs to the point where affordability is no longer part of the mix.”

State Sen. Nancy Sullivan says there may be some lingering ill-will toward MaineHousing, but she thinks the committee’s final recommendations will reflect the level of complexity that lawmakers must consider as they balance housing needs and costs.

“I think there are still some political undertones here, but they were very different–today there was a different feeling here and I think that’s important,” Sullivan says. “So that means we’ve made gains–people have sat down, talked and government probably has done some of what the people wish we would do: sit down and truly discuss without throwing bombs at eachother.”

At MaineHousing, Peter Merrill says he’s pleased the commission was able to separate the politics of the housing issues from the basic issues of identifying and meeting the needs of Mainers. “The chair made it very clear here that he was interested in constructive, productive conversations and solution-oriented discussions, and I think that’s good,” he says.

The commission is scheduled to hold a final meeting on Dec. 16th.