Service Center Housing Revival

(from Maine Townsman, March 2008)
Douglas Rooks, Freelance Writer

A few years after Bill Bridgeo became city manager of Augusta, the results of the 2000 U.S. Census came out. They were a shock to everyone in the capital city.

“We had lost 13 percent of our population, the largest decline of any sizeable community in the state,” Bridgeo said. “We knew we needed to do something to make this a more attractive place to live.”

The reduction of Augusta’s population, from 21,325 to 18,560 during the 1990s, was an extreme example, but it’s become a familiar problem in many of the state’s service center communities. While these economic hubs continue to be a source of jobs and commercial vitality in their regions, many of them have struggled to maintain their residential bases.

In a relatively slow-growing state, Maine’s urban centers have often lost population – Lewiston also lost 10 percent of its population during the 1990s. Of the 15 largest municipalities, the only city that substantially increased its population in the last census was Saco, which grew from 15,181 to 16,822, or 10 percent. The only fast-growing populous communities were towns like Scarborough, Windham, and Gorham, which were once seen as primarily bedroom communities for much larger neighbors.

The service centers have been seeking to reverse these trends in the years since the last census, and appear to be having some success. This month, the Townsman surveys five service center communities in different parts of the state and finds differing strategies and market conditions as the state moves toward the end of another decade – and another census report card.

While Augusta has continued to experience a boom in commercial growth, particularly retail, that hasn’t been the whole story. While the new Augusta Crossing development along I-95 and construction sites on the circles at both ends of Memorial Bridge are the most visible projects, housing is experiencing a revival as well, City Manager Bill Bridgeo said.

“The council has been very committed to housing in the new comprehensive plan,” he said. “We’re trying a variety of approaches, and we’re particularly committed to keeping middle class homeowners as part of the mix.”

A new housing study for the city by Planning Decisions makes it clear what caused the drop in residents, and also what opportunities exist for bringing them back. “In 1990, one out of three people who worked in Augusta chose to live in the city,” it reports. “By 2000, the proportion had fallen to one in four.”

The study found that by 2007, things had turned around and Augusta’s population was growing again, albeit slowly. As Lewiston and Gardiner to the south had already discovered, there was a market for those relocating from Boston and Portland for the relatively affordable housing Augusta already had.

Bridgeo points out that property taxes, which had once been a sore spot, have been contained and even reduced. The median home in the capital now has a $1,750 annual tax bill – less, when inflation is considered, than the $1,700 median bill in 1998. The city also completed a new Cony High School, a new YMCA, a cancer treatment center for MaineGeneral, and other amenities that help attract families and retirees.

Augusta has also been able to advance several housing projects that have been completed or are under construction. A conversion of an old Central Maine Power Co. warehouse on Water Street into 24 units of “workforce housing” represented the first new residential units downtown in years. Ground was recently broken for a 43-unit development called Cony Village, a joint venture of the Kennebec Valley CAP and Bread of Life Ministries that will locate affordable homes within an existing growth area. And a 50-lot subdivision with conventional financing called Fieldstone Place is going in on South Belfast Avenue, featuring the family housing that Augusta had a hard time attracting. Several new rental complexes are also under construction or have been completed.

While the city’s commercial growth has been resisted in some neighborhoods – a proposed supermarket for the former Cony High School site is still tied up in court, for instance – Bridgeo said that this new valuation, plus careful budget management by the city council, has kept residential tax bills down. “The commercial sector is carrying a greater part of the load. As a resident, you have to like that trend,” he said.

The housing study predicts significant net new demands for housing, and mostly at higher income levels, for households earning $75,000-$150,000. This means not only that new construction will be needed, but also that the existing housing stock must be upgraded. The city has begun using housing TIFs for the first time, and zoning changes to allow denser development and parking waivers may be necessary, the report finds.

Bridgeo said that he sees evidence that families with children are beginning to favor the city once again. In the West Side neighborhood bounded by Western Avenue, State Street, and the Augusta Airport, renovation of existing houses, rather than conversions to offices and apartments, are now taking place. “We’d like to see that continue. It’s a good sign for Augusta,” he said.

Sanford, unlike Augusta, has not had a net loss of residents in recent years. It has been growing modestly and, according to the 2007 Census estimates, with 21,500 people has just pulled ahead of Biddeford as the largest municipality in York County.

Sanford continues to enjoy proximity of most of the major markets in the region, and its population growth reflects that, said Town Planner Jim Gulnac. “We’re an hour from Boston, and closer than that to Portsmouth and Portland,” he said. “We’re a true 360 degree market – people comes here from all directions.”

What Sanford does need to do, said Town Manager Mark Green, is try to maintain its middle class sector. Like many cities in the aging Northeast, upper and lower-income residents have become more prominent. “We like all our residents, and are happy to have them,” Green said. “But all healthy communities need a balance, and that’s our goal.”

Behind this phenomenon, Gulnac said, is the familiar problem of housing affordability. In southern and coastal Maine, housing prices were increasing far faster than incomes during the 1990s and most of the present decade as well.

The 2000 census documented the shift in Sanford. About 48 percent of residents come from low- and moderate-income families, “who are living in stressed situations as homeowners,” Gulnac said. “If we’d reached 50 percent,” he added, “we would have been eligible for every federal grant there is.”

The Sanford Housing Authority has become a major player in the town’s housing market, and housing subsidies are necessary for many of the people who live downtown. Escalating prices sometimes hinder affordability even while new developments are being planned, Gulnac said. One large apartment complex, with 140 units, was planned for market-rate rents, but by the time it was finished many of the tenants required housing assistance. “That’s what the market provides, and what we have to adapt to,” Gulnac said.

There is still a significant amount of new construction in rural parts of town, Gulnac said, particularly small subdivisions with fewer than 15 houses, which don’t trigger stricter standards under Department of Environmental Protection rules. Even in rural zones, where a two-acre lot size is required, the town encourages clustering to minimize impacts and reduce the cost of services. “I’d say at least 50 percent of these developments involve clustering in some form,” he said.

Downtown, Sanford allows much denser development, and has changed zoning to accommodate residential development, such as the mill conversions now in the planning stages. “We can encourage it, but the market ultimately determines what gets built,” he said.

The current national slump in the housing market provides Sanford with an opportunity to take another look at its policies, and perhaps to integrate the market-based method with the assisted housing subsidies of an earlier era.

Gulnac said that if he were to chose a direction, it would be toward rehabilitating some of the town’s existing housing and upgrading it. “That way you not only provide places people need to live, but you improve the community’s image and the way it works,” he said.

The town of Canton, pop. 1,161, would not ordinarily appear on a list of service center communities, but it does have a major housing project that could anchor a new downtown.

Its story starts in December 2003 – or perhaps it would have been 1936, 1978, 1987 or 1996. Those years mark the five major floods that have buried scores of houses located near the banks of the Androscoggin River. The 2003 flood was one of the worst, and it attracted major statewide and even regional attention.

Canton qualified for federal disaster relief, as it had before, but this time many townspeople decided that a more permanent solution was needed, particularly seeing that flooding was becoming more frequent and damaging.

The bold prescription – move the town center uphill, well out of the floodwaters, and start again.

The town received plenty of short-term support, but four years after the latest flood, the new village has not yet been achieved. It hasn’t been for lack of trying.

Diane Ray has spearheaded the local volunteer effort, and has now earned the title of special projects director. Ray thought Canton was on the brink of success last year – until town meeting voted down a vital link in the  chain of events needed to rebuild the community.

“It’s not clear people knew exactly what they were voting on,” she said, admitting that she is frustrated by the outcome. The town meeting was considering a tax increment financing district that would have allowed Canton to steer tax dollars to the new village center.

“One of the conditions was that it not cost the town anything upfront,” she said. “That’s what the TIF would have done.” Yet while housing TIFs have become commonplace in the state’s larger communities, it was apparently still a difficult concept in this small town, and another effort will be needed.

“We still have all the funding commitments lined up,” Ray said. “They decided to give us some more time to get things together.”

Canton will indeed draw on a wide range of resources – the Maine State Housing Authority, Community Development Block Grant funds, and a $400,000 grant from the Federal Home Loan Bank of Boston.

In retrospect, Ray believes the village center project was difficult for a small town with no full-time employees to carry out. Some residents apparently believed that people who were selling their homes in the floodplain should be required to move into the new housing – which was, however, not yet under construction.

“We couldn’t have done that anyway,” Ray said. “You can’t force people to move somewhere just because they lost their homes. That’s not the way this country works.”

With that said, Ray says many of those displaced by the flooding would return to town – if the project can get under way soon. She’s also heard skepticism that there’s enough demand to fill the 25 units, which will all be available at affordable rates. “There’s plenty of interest,” she said. “This is new, high-quality housing at a price that’s really attractive.”

In addition to the housing that marks the first phase, Ray said Canton should be able to build commercial and retail structures at least on a limited basis. The floodplain land, now owned by the town, can be used for recreation, trails and other community uses – anything that doesn’t require the use of permanent, fixed structures.

Canton will get another chance later this year to approve the housing TIF and get going on its new center. “We’ll go door to door this time to try to make sure we reach everyone beforehand,” Ray said. “We’re going to find every community leader we can, and make sure that people know how this will benefit their community.”

Though many eastern and northern communities lack much demand for housing at the moment, Houlton, Aroostook County seat and the largest municipality at the southern end of Maine’s most sprawling county, has an active program – and a significant existing downtown housing stock.

One recent problem, in fact, according to Community Development Director Wade Hanson, has been the interaction between tenants who occupy second and third floor apartments, and the businesses locating on the first floor.  “It seems the sidewalks were being used for activities by tenants that weren’t necessarily appreciated by the business owners,” Hanson said.

A new town ordinance prescribes that the sidewalk space belongs to the business, and “some of the activities” – involving ball-playing and dogs – “have been directed to neighborhood parks,” where it can better be accommodated, Hanson said.
Such conflicts could be considered a measure of downtown health, and Houlton recently hosted one of the Maine Downtown Center’s annual meetings.

Hanson said that the town continues to try to find the right mix between commercial and residential uses, and this summer expects to see groundbreaking for a new, 28-unit assisted facility for the elderly downtown. That’s the only project currently on the horizon, but several developers are looking at rehabilitating the upper floors of several existing building, aided by Coastal Enterprises, Inc. (CEI), which has an active program in Houlton.

“The costs of rehab can be very significant,” Hanson said. “We’ve had some problems making buildings accessible.” While some downtown structures just have fire doors separating them, floors are often at different levels, making it hard to access a significant number of units from a central elevator, he said.

On the other hand, the early-20th century buildings that dominate Houlton’s downtown were constructed with a fair amount of forethought. “A lot of them have sprinkler systems,” he said – something that only decades later became part of national building codes.

The work should benefit from the state’s Historic Preservation Building Code, which Houlton has adopted. With any luck, the first CEI-assisted project could come to fruition in the not-too-distant future, he said.

Most Maine communities dependent on paper and pulp mills for their livelihood are in various stages of trepidation, and Madawaska is no exception.

But things are better here than in most mill towns, and Madawaska is actively looking to add affordable housing and study rehabilitating its existing buildings, according to Suzie Paradis, the economic development director.

Madawaska was awarded a CDBG planning grant last year, along with St. Agatha and Frenchville. The grant requires each community to do a survey to how many qualifying residents are interested in rehabilitating their homes, and a large proportion of the minimum number have already applied, she said.

Downtown buildings are mostly small, with only a few apartments apiece, but the town continues to survey needs there, in coordination with overall efforts to maintain and improve the town center.

Madawaska has already applied for an implementation grant that would bring CDBG money into town for housing and downtown revitalization; the next round of grants is expected to be announced April 8.

Smaller and rural communities need to be particularly active in seeking assistance from housing and downtown programs, Paradis said. She was assistant economic development in Fort Kent before becoming director in Madawaska three years ago. “We always have something in the works. That’s the best way to make sure you’re taking advantage of your opportunities,” she said.