What we’re talking about
A proposed $250 million development on the eastern waterfront might include one of the largest affordable housing developments the city has seen in decades.
But it’s just as likely that it won’t.
The proposed development of a former railroad foundry at 58 Fore St. would include shops, restaurants, a hotel, a 220-boat marina and, in a mix of existing brick and modern glass buildings, 638 units of housing. The scale of the project being put forward by development group CBP2 will trigger a city ordinance meant to encourage the construction of homes for middle-income Portlanders. But the dynamics of Portland’s real estate market might make it unlikely that the project will include that kind of housing.
In the lead up to a controversial and failed 2015 municipal referendum that sought to block the Fore Street development, the City Council passed an ordinance requiring all new projects of 10 or more units to include affordable housing. Ten percent of units in those buildings are supposed to be priced for households earning around the median income for the area — approximately $78,000 a year for a family of four.
But the ordinance also offers developers a buyout. Rather than including more than 60 middle-income homes in the Fore Street development, the developer, CBP2, has the option of building those units elsewhere or opting out entirely by paying the city $100,000 for each one not built.
“They will comply [with the ordinance], but it’s too early to tell whether [affordable units] will be built or if they will execute the buyout,” said a spokeswoman for CPB2.
She did not answer a question about what the developer hopes to sell the proposed homes for, but the $100,000 buyout might make sense for the company.
The median sales price for condos in the Portland metro area has been near or above $200,000 every year since 2013, and is presently $217,500, according to data compiled by the National Association of Realtors. Likewise, the median price for single family homes in the area rose from nearly $230,000 to $250,000 over the last three years. And high-end condos with water views often go for much more.
The Fore Street development may take as long as 10 years to complete, according to CBP2. The market is likely to shift during that period, but housing prices have consistently increased across the country during the last 30 years. And according to one real estate professional, taking the buyout can make sense for developers, especially at the upper end of the market.
“For condo units, the payment in lieu may make sense at some point, particularly at the luxury level,” said real-estate attorney Patrick Venne. But the calculations that go into this decision are complex, he warned, and taking a buyout likely doesn’t make sense in the case of rental apartments because they take longer to recoup the investment.
Since the new regulations were introduced, some developers have opted to pay into the city’s Housing Trust Fund rather than putting up middle-income units. The fund currently has $468,551 in it — including $290,000 from a recent buyout for a 29-unit condo building going up at 62 India Street, according Jeff Levine, the city’s head planner.
The $100,000 for a buyout is generally less than the full value of a middle class home, but Levine said that the city can make the payments go as far, or further, because of how it spends them. Rather than paying for the full cost of a new building, the funds are given as grants or loans to developers to cover the difference between what is deemed affordable for a middle-income Portlander and the full market rate of a home.
As the city grows, the city planner hopes the ordinance will provide less expensive alternatives in Portland’s increasingly pricey housing market, which he said is a particular challenge to young people who rent or are looking to buy a first home. But this end is served just as well through a developer taking a buyout as it is through them putting up lower priced units, he said.
“I’ve encouraged developers to seriously consider cashing out,” said Levine. — Jake Bleiberg
Come watch the first presidential debate with us — BDN Portland is hosting a debate-watching party on Monday night with Think Tank Coworking.
The event starts at 8 pm at Think Tank at 533 Congress Street, which is right across the street from Maine College of Art. There will be free pizza. We’ll stream the event on a projector screen.
Before addiction, there’s a child — In a multi-part series, BDN’s Maine Focus team digs in on a big question that hasn’t been addressed as deeply as the “enforcement vs. treatment” fight over the opioid crisis.
While the drug crisis has stirred widespread conversation about the availability of treatment and the role of law enforcement, we turned our focus to the long term: how Maine can prevent such devastation in the first place. The cheapest, least heartbreaking way to stop addiction is to support youth.
What’s killing the birds in Deering Oaks Park? — (Probably a bacterial infection.) The news release sent out this morning seemed ominous: 36 dead baby sea gulls were found in the park over the past three weeks. Three of the dead gulls were sent out for testing, and officials should know more in the next seven to 10 days. But an expert tells us this is probably a fairly common infection that’s just killing off the weaker birds.
“The only real issue is that it’s in downtown Portland, rather than on a island somewhere no one would really see it,” said Judy Camuso, Wildlife Division director for IFW.
The Big Idea
‘An endless bombardment of news and gossip and images has rendered us manic information addicts’ — Truth time: Between reading, writing, editing, scrolling Snapchat, and catching up on Brangelina news, I haven’t read this whole thing. But a colleague pointed out this line:
“Kara, in her 50s, feels that life in her hometown of Portland, Maine, has emptied out: ‘Sometimes I walk down the street, and I’m the only person not plugged in … No one is where they are. They’re talking to someone miles away. I miss them.’”
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