Creativity Needed to Help Make Housing More Affordable
Bar Harbor Council Approves Spending $24k on Wetlands Study for Park Parcel
MOUNT DESERT ISLAND—More affordable housing? Thriving year-round economies? More kids in local schools? These are some of the goals and potential benefits of the growing effort to combat the lack of affordable housing and to bolster year-round populations on Mount Desert Island.
At its April 16 meeting, the Bar Harbor Town Council unanimously approved transferring approximately $24,000 out of this year’s underutilized town manager’s budget (the town had interim town managers for the beginning of the fiscal year) to pay for a wetlands study and boundary survey for a parcel of land off the Crooked Road in Town Hill.
The parcel is not currently part of Acadia National Park, but it is owned by the National Parks Service. It is quite near the recently approved Brigadoon subdivison, which the town’s planning board approved last week. That five-home project was heavily scaled back because of wetlands and the possible presence of endangered bats at the back of the site.
Another approximately $10,000 for the survey and study is being paid for by Friends of Acadia (FOA) on behalf of the park.
An Act of Congress stated that the lot’s use is restricted to affordable workforce housing and that housing should not be just for those who work in Bar Harbor, but for the whole of MDI. The transfer of property has not been completed and is not contingent on the study.
“Affordable workforce housing” has not yet been defined, Bar Harbor Planning Director Michele Gagnon said.
During the discussion, Vice Chair Gary Friedmann asked what costs the town would incur to get to the next steps, to look at plans, and how would that be financed. Housing and Community Planner Cali Martinez said they do not know yet, and are trying to take it step by step.
There’s still a possibility that a huge amount of land is not developable, she said.
Because of the nature of wetlands, the studies need to occur in spring. The project is currently unfunded. Town Manager James Smith said the funding and future of the project is complicated because the property is in Bar Harbor proper and there has to be some negotiation and a partnership between all the island towns and Acadia National Park.
“I can’t make a commitment beyond the first phase.” Friends of Acadia President and CEO Eric Stiles said his organization is working on two other projects about housing. “We’re proceeding with caution.”
Though proceeding with caution, the organization wants to be supportive of the park and also be a good partner to the community, Stiles said. FOA has purchased Kingsleigh Inn for workers. It has another project to house eight in Seal Harbor at Dane Farm.
During public comment, Barbara Dunphey worried about whether any of the burden of the expenses will become a burden to the property owners’ taxes of Bar Harbor.
“That’s a concern the council has to grapple with,” Smith said. He said there are potential options to mitigate or relieve that burden.
Jim O’Connell, also speaking from the public, said any additional homes would help increase Bar Harbor’s tax base.
HOUSING A HOT TOPIC FOR DECADES
Housing has been a hot topic on MDI as of late, but the truth is that housing has been an issue, in one way or another, for decades. Within the confines of casual conversation, two residents who are MDI natives said that growing up they were told that they would never be able to afford to own a home on the island. They both still live here.
Two other lifelong residents of MDI recently told the Bar Harbor Story that when they were growing up the idea of not living on the island never occurred to them; it was just assumed that that was the way it was, life on MDI, forever. These two residents, both born at MDI Hospital and married to one another, have lived in the same house for approximately 50 years.
All of these individuals are over 50. There is a 15-20 age difference between the married couple and the other two, unrelated, people. The older couple built the house that they still live in themselves and the community was a big part of it. The husband of that couple said that when he was done working for the day, he would often come home and find two or three community members working on his house, pounding nails, installing shingles on the roof, or whatever needed to be done at that particular point in time.
Is that the secret to homeownership in a popular community? Helping each other? Building each other up rather than breaking one another apart? Or is it goal-setting and working hard until you achieve your goals? Or maybe both?
Currently, there are three organizations who are leading the way in the creation of affordable housing: Island Housing Trust (IHT), Mount Desert 365 (MD365), and MDI Housing Solutions Initiative, which is a collaboration between the Musson Group and IHT. Recently, there were two forums regarding housing issues on MDI.
MAHOOSUC WAY HOUSING LEARNING SERIES
On March 27, The Mahoosuc Way hosted a public access learning session on Zoom. The Mahoosuc Way is based in Bethel, Maine, and its website says that it is “a community-driven effort to care for our local communities and environment while providing great outdoor recreation and visitor experiences in the greater Bethel area of western Maine.”
Obviously, Bethel, Maine, is not on MDI. However, the Bethel area shares a similar housing situation as the island and the forum was a chance for representatives from IHT and MD365 to share what they are working on and how they are trying to accomplish their goals with other organizations trying to similarly help other areas of Maine.
Eric Boyle-Wight of Inland Woods and Trails (IWT), which is also based in Bethel, gave an example of Bethel’s housing issues by saying that the two newest employees of IWT had to find housing that was half an hour away from the office.
More locally, Executive Director of Island Housing Trust, Marla O’Byrne, spoke at the forum and presented some of the organization’s goals, successes, and ideas for creating affordable housing across MDI.
Workforce housing is a primary focus of IHT’s efforts and applicants must prove that “at least one adult in the household has earnings from employment on MDI equal to or greater than 20% of the area median household income.”
IHT currently holds covenants on 48 properties and also owns two additional properties with potential for six more houses. The covenants for these properties set income eligibility caps and require that the property be the primary residence for the owners. Primary residence for IHT is 11 months out of the year.
The income eligibility caps for IHT range from 120% of median income for individuals to 160% of median income for a family of four. Purchasers must also agree to, in writing, IHT maintaining a right of first refusal and a resale formula on the residences that they build so that they can ensure that the properties stay “affordable” for the life of the property.
Kathy Miller, executive director of Mount Desert 365, also spoke at the forum on March 27. MD365 has a slightly different approach than IHT and is focused on the towns and villages of the Town of Mount Desert. The organization’s goal is to improve the economy of Mount Desert so it thrives on a year-round basis. The major component is housing because the organization believes that people need to be in a town, living, in order for that town to thrive year-round.
MD365 has built a new building in Northeast Harbor for its office space, office space for another nonprofit, and two apartments. The organization is also working on plans for the two empty lots in downtown Northeast Harbor that were destroyed by fire in 2008. Those lots still stand empty and MD365 would like to turn them into apartment buildings.
Currently, MD365 is working on the proposed Heel Way Subdivision in Northeast Harbor. This subdivision is made up of a parcel of land that includes one existing residential structure. MD365 wants to build two duplexes and one single family residence for a total of six residences within the subdivision. The subdivision has been approved by the Mount Desert Planning Board but is currently tied up in Hancock Superior Court on an appeal to the board’s decision by neighboring property owners.
Both of these organizations own other properties not highlighted here.
MDI HOUSING SOLUTIONS SUMMIT
The MDI Housing Solutions Summit is one of the collaborative efforts of the MDI Housing Solutions Initiative. The initiative is not a creator of residences so much as “a platform for bringing together a wide cross-section of island leadership, businesses, organizations, and residents to address a common challenge.”
The second MDI Housing Solutions Summit was held at the MDI Biological Laboratory on March 29. This event was organized by a steering committee with the Musson Group being the facilitator.
According to a press release issued by summit organizers, “similar to last year’s event, we see great value in convening a group of leaders as partners to increase opportunities for collaboration and coordination. Participants included representatives from local businesses, institutions, non-profits, and municipal leadership from MDI and surrounding communities, as well as state government representatives, staff from U.S. Senators Angus King and Susan Collins’ offices, local builders, engineers, developers, financiers and lenders, grant-makers, and real estate agents.”
The first two housing summits have been by invitation only and not open to the public or the press. When asked about this, Noel Musson said, “This has helped with space planning and logistics of the event format. However, as part of the housing solutions initiative, we recognize the importance of taking the conversation to the public at large. Since the first summit, we have had a few events open to the wider community, and more are planned in the future, either through the initiative or by other housing solutions partners.”
Additionally, Musson said, “Information sharing and communication is a key part of the Housing Solutions Initiative. After the 2023 summit, we published a summary report. A pdf copy is available to the public at the MDI Housing Solutions website. We plan to do something similar with the work from the 2024 Summit.” The pdf copy of the 2023 summary report is here. The 2024 summary has not yet been released.
TOOLS TO MAKE HOUSING AFFORDABLE
Both Island Housing Trust and Mount Desert 365 depend on donations, grants, and private and public partnerships to accomplish their missions. IHT does not make a profit off of the home sales according to O’Byrne. While MD365 does have rental properties that provide a cash flow, but not necessarily a profit, IHT does not and once those non-rental properties are sold by either organization, they become the financial responsibility of the purchaser.
In order to make home ownership more affordable, IHT has instituted land leases for many of its properties. That is, IHT maintains ownership of the land and sells the actual structure and improvements to the homeowner with a 99-year land lease. There is a fee of $240 a year for the land lease to the homeowner but they do not have to pay for the land-based portion of their property taxes. Because IHT is a nonprofit, they do not pay for that portion of the property taxes either.
According to MD365’s Miller, the organization does not pay taxes on its own office building because it is a nonprofit and it has one residence that is in a land lease covenant but that covenant is actually held by IHT.
IHT’s newest development, Jones Marsh in Bar Harbor, has all 10 of the new residences under the land lease agreement. Two of these structures are duplexes so it is eight actual structures. In addition, IHT owns an abutting parcel of land at Jones Marsh for possible future residences.
The chart below shows the nine parcels of land (which includes the non-developed parcel) and the parcels’ land-based tax assessment according to Bar Harbor’s assessing office. The total amount of taxes not being paid for the developed lots is $10,153.84 and the total with the undeveloped lot is $12,929.73. Also, according to the assessor’s office, once undeveloped land is developed, the actual value of the land itself will rise, so the $2,775.86 amount will rise substantially if that parcel is built upon.
These numbers are based upon a mill rate of .00868 but that will change July 1 adding to the taxed amount for the land.
When asked about the removal of the land values from the property tax rolls, O’Byrne said, “Tax exemption in this situation isn't a simple black and white formula that leads to a conclusion IHT is taking land off the tax rolls. The relationship is more complex. For instance, looking at Jones Marsh: the 30 acres IHT bought for $189,000 would have had a tax assessment of less than $1,800.” That would be, of course, if the town had the parcel assessed for what IHT paid for it.
By improving the land and building residences on it that people purchase and do have to pay property taxes on, IHT, via the homeowners, is actually adding money to property taxes that do get paid. For the Jones Marsh development, the assessed property taxes that have been added to the tax roll and are being paid for the eight structures (ten residences) is $20,292.12.
There is a caveat to this amount in that some units have not been sold or not been updated in the tax assessor’s database. However, the duplexes all carry a like amount and the single-family units all carry a like amount so the number should be accurate.
Musson said of the land lease option, “We need to consider all the tools in the tool kit to help provide more homes for people we need to have in our community in order to keep MDI and the surrounding area the special place that it is. Programs like this do not always result in properties being taken off the tax roll. There are a lot of models and nuances to how things get set up. However, they do always create opportunity for people who earn an average income by helping to reduce the overall purchase price, they can actually add value to the tax roll as a result of the development, and they do result in overall long-term investments in our communities and in the people who we need to live in them.”
LINKS TO LEARN MORE
To watch the Bar Harbor meeting
To read the Town Council packet
Friends of Acadia Housing Projects
If you’d like to donate to help support us, you can, but no pressure! Just click here.
Misread, honest mistake.
It is heartening to see all these efforts to provide affordable housing on MDI.
It is a problem that will never be solved and not go away. MDI is too beautiful and too popular. Visitors will always come here and they will always think MDI is a better place to live and want to settle here. About half our land area is undevelopable for legal reasons - national park, conservation easement, environmental restrictions, and so on. In the other half site conditions raise construction costs.
Keep up the good work