Plans for an affordable, 23-condominium workforce housing project in Portland’s Parkside neighborhood were approved by the Planning Board in its first virtual public hearing since in-person meetings were suspended.
The four-story building planned for 104 Grant St., to be called The Goodwin, will have one two-bedroom and 22 one-bedroom units ranging in size from 500-750 square feet, with an estimated average price below $265,000, according to documents submitted to the city by the developers.
The city is also reviewing the project for a tax increment financing credit.
Todd Alexander, a partner in one of the developers, Renewal Housing Associates, said at the April 21 hearing that prices would range from $200,000 to about $400,000.
“We certainly recognize that affordability means different things to different people. It’s a fairly subjective term,” Alexander said, explaining that for this project they are targeting middle-income buyers.
He said the average listing price for all condominiums on the Portland peninsula in 2019 was $444,000. The average for the first quarter of 2020 was $774,000, he said, and in March alone, 12 units were listed for more than $1 million, while only 10 were listed for under $400,000.
The condominiums will be constructed on a third of an acre at 104 Grant St. The property is owned by developer Tom Watson and formerly housed his Port Property Management offices.
When Watson purchased a lot at 82 Hanover St. in the Bayside Neighborhood from the city, a condition of the sale was that he convert the Grant Street property to at least 23 units of housing. The Grant Street property is in an R-6 residential zone, intended for high-density multifamily uses.
Watson partnered with Renewal Housing, which is majority-owned by Delaware-based real estate development company Leon N. Weiner & Associates and has developed two other workforce and middle-income housing projects in Portland’s West End: Onejoy off Brackett Street and West Port Lofts on Tate Street.
There will be 12 deed-restricted affordable units at The Goodwin, which qualify the property for a tax-increment-financing district and other public funding options to help finance the $6.5 million project.
The city’s Economic Development Committee is considering the developers’ application for a TIF and credit enhancement agreement to cover $1.05 million of construction costs. It would then go to the City Council and the Maine State Housing Authority for final approval.
Alexander explained during the hearing that under the affordable housing TIF, property taxes paid by the future buyer would be used to repay the loan.
“The subsidy does not work in a way such that the developer, so to speak, receives a subsidy or a tax break,” Alexander said. “The homeowner who is receiving the benefit of a below-market unit will utilize their future property tax (payments) to pay for the financing that was used to construct their unit.”
According to an analysis of the request by the city’s housing office, the project is expected to increase the assessed value of the property by $4 million and to generate $124,000 in new taxes each year. Of that, $93,000 would be returned to the developer to pay back the construction loan, and $31,000 will be paid into the city’s general fund, on top of the $13,500 of taxes on the original assessed value of the property.
Because this new value would be sheltered from state and county calculations, the requested TIF would save $25,500 per year or $766,000 over the 30-year life of the district.
Three of the affordable units will fall under the city’s Inclusionary Zoning requirements, regulated under a 30-year workforce housing agreement. Another five units will be regulated under a workforce housing agreement with a 10-year term.
The developers have applied for a Maine Housing Subdivision Grant to cover another four affordable units, which, if approved, would be regulated under a restrictive covenant for nine years.
This state-run grant program provides zero-percent forgivable loans of between $100,000 and $450,000 to reimburse developers for such things as construction loan interest and on-site infrastructure costs. For every $20,000-$22,000 received, one unit or home in a subdivision must be pledged as affordable.
To be eligible to purchase any of these 12 affordable units, buyers would be limited to making 120 percent of the area median income, listed on the city website as $78,120 for a single person and $89,280 for a two-person household.
The remainder of the units would be sold conventionally, but the developers have stated that the highest-priced units would be between $355,000 and $400,000.
When asked if there were any affordability requirements for owners who may choose to rent out their units, Alexander responded by email April 25 that the city prohibits the workforce housing units from being used as short- or long-term rentals, and that buyers must certify that the property will be their primary residence.
As for the rest of the units, he said, “we implement rules in the condominium bylaws that prohibit short-term rentals on all units,” and noted that at Renewal Housing’s two other affordable housing projects, 80-90 percent of the units are owner-occupied.
Neighbors raised concerns about parking at the public hearing and at an earlier neighborhood meeting. For the 23 units, the site will offer only 12 on-site parking spaces and will be leasing eight additional spaces elsewhere to meet the zoning requirement of 20 spaces for the size of the development.
Angela Miller-Gray spoke about how difficult it is for her tenants at a property across the street to find parking and suggested that because it is likely that couples would be renting the new units, the actual number of spaces needed would be 46.
Alexander said he has found at other properties that decoupling parking from housing helped some people, such as those who do not own cars, afford the units. People for whom such an arrangement works chose to purchase the units while others did not.
“There’s a high level of self-selection,” he said.
He said the team considered building a parking level below the building, but because of environmental issues extensive digging would be prohibitively expensive. Also, height restrictions prevent building up to accommodate parking.
Sampling revealed evidence of contaminated soils in isolated locations under the building site that would require a soil management plan and environmental controls, Alexander explained by email April 24. He said he expects to submit an application for a Voluntary Response Action Plan with the Department of Environmental Protection in late May.
Planner Caitlin Cameron said the project was not large enough to require either traffic impact or parking studies.
The board agreed that meeting the zoning requirement related to parking was sufficient and that it was important to bring more affordable home-ownership to the neighborhood.
“I’m not really concerned about the parking in general,” Board Chairman Brandon Mazer said. “It is dense, and as we get more dense in the city, parking is going to have to become less and less of a priority.”
Board member Marpheen Chann said the addition of workforce housing is a positive development.
“I know we’ve been doing pretty well on the high end, and then moderately well in the lower end of things,” Chann said. “But it’s that middle part that’s been missing.”