We all know about Portland’s affordable housing problem. In the state’s largest city, the median income earner cannot afford to rent the median rent on a two-bedroom apartment or buy the median-priced home. But it’s not just Portland’s problem.
State Rep. Christopher Kessler is sponsoring a bill that would add a fee to short-term rentals and vacation homes that are vacant more than six months of the year to help fund affordable housing programs. Gregory Rec/Staff Photographer
Although the numbers are different, the median home or apartment is out of reach for the median wage earner in Augusta, Bangor, Bath, Belfast, Biddeford, Rockland, Sanford, Waterville and many other Maine communities.
According to data compiled by MaineHousing, rent was unaffordable in 15 out of the 16 Maine counties last year, and home prices were out of reach for median earners in seven counties, including the population centers of Androscoggin, Cumberland and York counties.
With so many parts of the housing market out of whack, it’s galling to see prime real estate in some of the state’s most desirable locations sitting empty for much of the year, either as second homes or short-term rentals, instead of providing a home for a middle-income family.
A bill now before the Legislature aims to do something about that.
L.D. 1337, sponsored by Rep. Christopher Kessler, D-South Portland, would attach a fee to property that is unoccupied by a full time Maine resident more than six months a year. Since the housing market is a balance of supply and demand, an empty unit puts upward pressure on the prices of available ones. Anyone who can afford a home or apartment that they only use a few weeks a year should be able to chip in to solve the housing affordability problem to which they contribute.
The money collected would be split between two programs. Half would go the MaineHousing’s HOME program, which contributes to the development of new affordable housing developments. The other half would be used to finance the homestead exemption, lowers the property tax burden on state residents.
The bill has a number of provisions to protect middle-class families from getting stuck with the new fee. It would exempt Maine residents with incomes less than 150 percent of the area median income, or $105,495 for an individual in Greater Portland or $151,350 for a family of four. Seasonal camps would also be exempt. It is targeted towards wealthy, out-of-state vacationers, who will not be deterred by an effort to help their seasonal neighbors.
Getting tourists to pay a little more to cover the state’s expenses – sometimes referred to as “exporting our costs” – has been a tax reform goal for many years. Other tourism-dependent states, like Florida, do much more to collect from visitors, but Mainers have not been able to agree on a good way to do it.
In 2009, the Legislature passed a complicated tax reform package, which cut income tax (since it’s paid mostly by residents) and raised sales taxes (since they are paid mostly by visitors.) The package was overturned in a people’s veto the next year.
In 2019, proposals to allow municipalities to charge an additional sales tax (predominantly paid by tourists) to help pay for local needs was shot down by the Legislature.
It’s time for the Legislature to act. When so many families can’t afford one home, owners who keep second homes vacant should be asked to help.
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