For decades, Maine politicians may have disagreed on the best solutions. There was little disagreement, however, as to what one of Maine’s most pressing problems was: the prosperity gap between it and other nearby states.
Although it’s often used as a ready comparison – especially by conservatives – that gap isn’t just between Maine and New Hampshire, but between Maine and the rest of the region as a whole. When one looks at a variety of financial statistics for the entire Northeast, Maine has long been, and still is, an outlier. For instance, the closest state with a lower per capita income than Maine was, in 2019, West Virginia – not a neighbor by any stretch of the imagination.
Maine politicians have long debated how to solve this problem. Democrats have tended to favor a more top-down approach to the issue, favoring new government programs and public investment for economic growth, while Republicans supported reducing the tax burden and regulatory burden on businesses. The truth of the matter is that a mixture of both approaches would work best. Simply throwing government money at the problem won’t fix it overnight, nor will eliminating income tax, sales tax or any other tax. There are some areas where public investment is absolutely vital and necessary, like in transportation: improving the state’s large road network would make it easier to do business here, for instance.
Lately, though, many politicians in Maine seem to be worried about something other than the regional prosperity gap. Instead, they’re worried that Maine’s somewhat increasing prosperity as of late has increased the prosperity gap between fellow Mainers, making it unaffordable for many to live here. While that’s a reasonable concern, Maine ought to be very careful not to stifle our economy with new regulations. That would halt any prospect our state has of emerging from the pandemic with increased prosperity, which would be a wasted opportunity.
There’s been discussion statewide about the rising costs of housing in Maine, but it’s been especially acute in the Portland area. The housing crunch has led to both a new statewide commission looking at short-term rentals and a number of referendum items that will be appearing on Portland ballots.
The statewide commission is taking a top-down look at the problem by contemplating various ways for government to rein in housing costs. The problem with that approach is two-fold. The first is that it’s not entirely clear that short-term rentals are much of a problem; the second is that they’re largely regulated at the local level. The state could change that, but it shouldn’t. Any regulation of short-term rentals is best left to individual municipalities. There’s little new regulation that would make equal sense in, say, Wiscasset and Portland.
The Portland proposals, too, take a top-down approach, increasing regulations on short-term rentals, increasing the minimum wage and increasing tenant protections. While all of these proposals would certainly increase government regulations and make it harder to do business in Portland, there’s no guarantee they would do much to ease the housing crunch. Just as with job-creation programs that often fail to deliver the promised results, it’s easy to imagine the city of Portland or the state of Maine imposing all of these new regulations and creating a whole host of new problems without even solving the problem they’d hoped to address.
Rather than imposing new regulations on landlords or businesses, both the state and the city of Portland should look at how they can increase housing assistance. This approach, although it would be more costly and more complicated than simply slapping some new regulations on landlords, could actually help the people who need it without interfering with Maine’s business and property climate.
The state and the city could also look at making it easier and more affordable to build affordable housing, and reforming the laws governing those projects so they truly stay affordable. Maine may have a housing crisis, but it still has a prosperity problem, too. With every problem, there is always a solution that is easy and quick – and also wrong. It’s vital that we take the time to addressing housing issues in a balanced, reasonable way that gets it right, even if it takes a little longer.
Maine can’t afford to get this one wrong.
Jim Fossel, a conservative activist from Gardiner, worked for Sen. Susan Collins. He can be contacted at:
jwfossel@gmail.com
Twitter: @jimfossel
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