on Oct 12, 2023

HR&A Advisors conducts novel report investigating Maine’s housing production needs

In partnership with MaineHousing, the Department of Economic and Community Development, the Governor’s Office for Policy Innovation and Future, and a wide group of technical stakeholders, HR&A Advisors conducted a study that investigates the relationship between Maine’s housing production, population change, and labor force needs to help the State and local communities understand the scale of housing production and reinvestment needs across the state. This Study is the first of its kind for the State of Maine and one of the first studies nationally to measure this need specifically in alignment with the State’s economic and housing goals: namely, to have enough homes overall to support broad affordability and availability and to have enough homes in the right places at the right price point to support the workforce necessary to sustain and grow Maine’s economy.

This study is considered a first step in addressing Maine’s Housing crisis by building a shared understanding of the number of homes required to establish a foundation for widespread affordability and accessibility. This understanding forms the groundwork for municipalities and communities to understand the housing that is needed and the factors influencing Maine’s housing market as they develop tailored policies and local strategies to address the crisis in their community.

Report Executive Summary Preview

In response to a national housing crisis accelerated by the Covid-19 pandemic, policy makers are increasingly asking, how many and what kind of homes are needed to meet the needs of our constituents and improve affordability? The scale and nature of housing challenges varies significantly across regions and places but is driven by a primary underlying cause: housing production dropped precipitously after the Great Recession, leading to a nationwide undersupply of homes, especially at low and moderate income price points. These trends were exacerbated by the pandemic through materials and labor shortages just as some places—Maine in particular—experienced a sudden influx of residents due to an increase in remote workers seeking a higher quality of life and an increase in international immigration. What was once primarily a problem for coastal cities has become a national one; almost every county in America now has significant rates of renter cost burden, among other housing challenges (Figure 1).

While Maine has historically had a relatively affordable homeownership market, this changed in the years leading up to the pandemic and has worsened since 2020 as housing production has lagged population and job growth. Maine is also faced with an aging housing stock, leading more of the state’s existing homes to sit vacant in need of reinvestment. These trends have led to a range of housing challenges for Mainers, including reduced housing quality, limited options to age in place, increased homelessness, and rising housing costs. All these issues are important to study further. However, at the most basic level, aligning housing production with population and economic growth is the foundation of a healthy housing market that offers quality homes at a price affordable to residents. The first step is to understand how many homes are needed to support broad affordability and availability and to support the labor force needed to sustain and grow Maine’s economy, which lays the foundation to adopt policies to create those homes.

Figure 2: Setting Housing Production & Reinvestment Targets