08/14/2015

Affordable condos unsold; council allows market pricing with difference to benefit townwide affordable housing

The Town Council on Aug. 10, 2015 agreed to let Eastman Meadows, the 46-unit condominium development off of Eastman Road, sell two of its six affordable housing units at market price.

The vote marks the first time officials implemented a clause in the 1992 affordable housing provision that governs cases when affordably priced housing fails to sell.

The clause gives the town the option to purchase housing that does not sell after 180 days of being marketed as affordable. In this case the Town Council opted to waive that option, allowing developer Joel Fitzpatrick to sell two of the Eastman Meadows units at market price, without the long-term affordable housing restriction, and reimbursing the town the difference between the selling price and the $395,022 price set as affordable for moderate-income buyers.

Councilors, as well as the town manager, were astounded at the price that was considered affordable. "I just can't believe that," said Town Manager Michael McGovern. "And that might be one of the problems - if people are going to spend that much money, they won't want to have all these strings attached," he surmised.

According to the affordable housing provisions of the town's zoning ordinance, developers of major subdivisions must make at least 5 percent of their housing affordable to buyers earning 50 to 80 percent of the median income for the Portland area; or, 10 percent to buyers earning at 80 to 150 percent of the median income. The formula caps low-income affordable homes at $210,678; and moderate-income homes at $395,022.

Molly MacAuslan, one of the town councilors, said, "That seems very high to me."

Time to redefine 'moderate' income?

Officials agreed it may be time to reduce the definition of moderate income to 120 percent of median, as it was in the late 1980s when the town began developing provisions for affordable housing. By 1992, when Cape Elizabeth adopted the provision, values in southern Maine were so robust that the Maine State Housing Authority allowed communities to use a 150-percent ceiling, Town Planner Maureen O'Meara explained. "Right now the moderate income is really bumping up against the market rate, which isn't really dealing with the original intent of the ordinance," she said.

Plans are to add the possible redefinition to a list of technical amendments to the zoning ordinance being developed by the Planning Board. At the same meeting Aug. 10, councilors granted the board's request to work on the amendments to "clean up, clarify and update" the ordinance without making major policy changes.

In the meantime, funds exceeding $395,022 for each of the Eastman Meadows condos sold at market rate will be set aside for affordable housing, McGovern said. "We don't have any specific proposed use for those moneys, but conceivably this could be thirty-, forty- or fifty-thousand dollars each, based on what these other units are selling for," McGovern said.

The town currently has nine low-income and nine moderate-income affordable housing units, including the two considered by the council Aug. 10. One low- and one moderate-income house have been resold, with the low-income home selling in one day with multiple buyers, according to a memo from the town planning office.