2017-03-17 / Front Page

Coalition: Adjustments needed for affordable homes

By Wm. Duke Harrington Staff Writer

KENNEBUNKPORT — The final report on a two-day public workshop staged last fall by a regional housing group is in, and it predicts Kennebunkport would have to adjust zoning to allow for as many as 21 living units per acre in order to create homes in town the average local worker can afford.

On Sept. 27 and 29, the Workforce Housing Coalition of the Greater Seacoast (WHC), a nonprofit based in Dover, New Hampshire, brought in more than 20 designers, planners, architects, engineers, real estate agents, developers, bankers and construction estimators, along with interested local residents, to tour two Kennebunkport sites, including one adjacent to Consolidated School, and brainstorm ways to create homes in town that the average person could afford. The project was staged at no cost to the town, with the Nonantum Resort hosting the “charrette” sessions, and Kennebunk Savings Bank picking up most of coalition’s costs.

“The value of this study is immense,” Selectman Patrick Briggs said at the board’s March 9 meeting, offering the only official reaction to the final report.

“One of the difficulties we face is getting reliable information,” he said. “You don’t want to have an uninformed decision process. Where we will end up is something that will be decided in the future, but this is something that we need to get the dialogue going.”

The town asked Workforce Housing to come in because, in the words of Town Manager Laurie Smith, “Being able to attract part of the workforce, and families, to our community had become an issue.”

The 2000 U.S. Census pegged the median age of Kennebunkport residents at 46, with 25 percent 65 and older. The town had 2,559 housing units, but 36.8 percent were considered “vacant” due to occasional use as second homes, or for seasonal rentals. In the 2010 census, the median age had jumped to 52, with 34 percent 65 or older, and, while the housing stock had grown to 2,897 units, 45 percent were deemed “vacant” in the eyes of the feds.

“So, in that short 10-year period, we had seen what I would say was a dramatic change.” Smith said. “And I would tell you the preliminary data we have seen from 2015 shows that those numbers continue to increase. Our population continues to age. Our vacancy rate continues to increase. So, what does this mean about out community?”

According to WHC executive director Robin Comstock, it means homes in Kennebunkport are increasingly out of reach for most people who actually work in town.

According to Comstock, the median income of individuals living in Kennebunkport year-round was $74,167 in 2015. Accepting the conventional wisdom that a person should be able to plow 30 percent of their income into housing costs, Comstock said, that person should be able to afford to buy a home priced at $275,000. However, the median home price in Kennebunkport in 2015 was $509,330, she said.

“In 2015, 66.4 percent of households in Kennebunkport earned annual incomes below the level needed to afford the median home price in town,” Comstock said. “That puts financial pressure on these households, by requiring them to spend a higher percentage of their income on housing.”

More importantly, it means that as year-round residents leave Kennebunkport for cheaper homes and lower taxes elsewhere, new homeowners are not replacing them in equal numbers — at least not the type of residents who might most likely take jobs at local businesses and industries.

“That means we are seeing a lot of home sales to people who are purchasing the home to immediately do rentals, and we are seeing a change to local property as second homes, or third homes,” Smith said. “That means it is more difficult to find a year-round population, and that means it’s more difficult to find people to work in our community. It’s more difficult to find people to serve on our planning board. It’s more difficult to find people who can volunteer on our fire department. It’s more difficult to find teachers who can live nearby. It’s more difficult when we need to hire a plow truck driver to work with our public works guys, and we need him to be within a certain distance to respond during a storm.”

As part of its project to figure out how best to create affordable homes on a 10- acre urban development plan, or a 20-acre rural site, WHC team members toured two town-owned parcels. The 8.1-acre lot next to KCS was purchased by the town in 2013, officials says, in anticipation of eventual expansion to the school, public recreation, and wastewater treatment needs, as well as to maintain open green space. The area is in the town’s Village Residential District, with a minimum lot size of 40,000 square feet for single-family homes and 20,000 square feet for duplexes, leaving room for 8 new homes, or 16 duplex units.

The rural site considered was an 18.7-acre property off Old Cape Road, about 3.25 acres of which is in wetlands, with an abandoned trolley line used by hikers and cyclists on one end. The property was not toured as it is heavily wooded. Zoning there currently allows for 16 house lots, or 32 duplex buildings.

At the public session that followed, “there seemed to be persistent and perhaps widespread opposition to WH [workforce housing] at least at the school street site,” the report acknowledges. Some of the residents who attended the meeting questioned if the town was planning to develop the site. When told the site was only being considered in a theoretical sense to help understand what might be done in town to help provide more affordable homes, some still said the entire WHC project was “putting the cart before the horse,” by eyeballing specific properties.

Two WHC teams, one focused on engineering and design standards, and the other centered on finance and project feasibility, determined that under current zoning restrictions on town, building 16 duplex units on the 8.1 acre site would result in units costing $529,500 each, when accounting for purchase price, construction and development costs, and permitting fees, developer fees, and a project loan with a 4.5 percent interest rate. Try as it might, the brainstorming teams could do no better on the rural site, determining the theoretical 32 units there would enter the market at $540,000 each.

Only if the town create a so-called “density bonus” zoning amendment, allowing for 80 units at 1,500-square-feet, each, could the price be brought down to the target, the groups concluded. With more homes in multi-unit buildings, construction cost could be brought down from $160 per square foot, to $100, lowered the presumed purchase price to $267,375 per unit — just within range of the median income in town.

However, even with the density bonus allowing for 56 units, the price for each one on the larger rural site was not estimated to come in any lower than $370,000 for each one, owing to the need to build well and septic systems for each building, as well as costs to bring in utilities and the longer roads required to access the property.

“It’s very difficult to get costs that are going to be lower because of the cost of getting roads and water in,” said Rip Patten, vice president and senior environmental engineer at Westbrook-based Credere Associates, who led the WHC design team.

Only by increasing the number of allowed units to 94, or by subsidizing the project with federal tax credits, Patten and his crew concluded, could costs be lowered to meet the affordability target of less than $275,000 per unit.

“The units also would have to be rentals and not for sale,” the final WHC report concluded. “Typically, the sponsor of [such a] development is a for-profit developer or a not-for-profit housing authority that would own and manager the complex.

The estimated price ranges for these new homes included a presumed purchase price any developer of $75,000 per acre for the “urban” site, and $35,000 for the larger, rural property. That might be brought town if the town served as developer, or else donated land, or even offered it at a discount rate, Patten said.

“If the town can come up with a piece [of land], if it was to acquire land from tax-delinquent properties, that could be something to set up an RFP (request for proposal) to try and attract some different developers who might be interested in putting workforce housing here in Kennebunkport,” Patten said.

“But the intent of the work that we did was to just start the conversation,” Patten said. “This is your community. We did not want to come in and say, ‘This is what you should do.’ We had just been asked to come in and present some ideas.

“The first step now is what you are doing now, just continue the dialogue, maybe forming a committee to look into some of our recommendations,” Patten added. “We have given you some information and it’s now up to you to move forward.”

In the capital overlay for the 2017-2018 town budget, debated March 9 by selectmen and budget board members, Smith has penciled in $23,000 to commission a study on affordable housing options. The desire for a more formal examination of what the town has and needs for affordable housing was driven by public reaction at the September charrette, she said.

“What we took away was that we need to take a couple of steps back and do some further analysis,” Smith said. “This study would not be to identify lots, it would not be to develop sites. It would just be to understand the need.”

However, not everyone at the meeting was on board with the town trying to drive market forces, including budget board member Dan Beard.

“It strikes me that if something was needed, a developer would come, do the work, and present his ideas to the community,” Beard said. “I can’t imagine why the town needs to do this. Why should we spend taxpayer money to figure out if we need it?”

Selectman Ed Hutchins agreed there had been public pushback at the September meeting. By even considering the lot next to KES, “they were just pouring gasoline on a fie that night,” he said.

Still, Hutchins did not back away from his belief of a looming, systemic problem that threatens to render Kennebunkport a different place than the town he grew up in.

“Seasonal housing is destroying this community,” he said. “In my family, I am the last generation, of 10 that have lived here, that can afford to live in this town.”

“We know property here is expensive,” he said “We need to figure out why. We need to look at the big picture here to find out how to change our ordinances to make homes here affordable. It’s our responsibility as a community to take this step because we need all income levels in this town.”

Smith, meanwhile, said it would be better to try and understand the market forces at work in town, and plan for them, then to be content to let the housing market shake itself out.

“We don’t want a developer telling us what’s going to work in our community,” she said. “I think we need to analyze what works for us and how we get there.”

Staff Writer Duke Harrington can be reached at news@kennebunkpost.com.

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