Loss of shelter plan draws attention to Portland’s Green New Deal

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Portland officials are blaming the Green New Deal after the city’s preferred location for a temporary emergency shelter for homeless individuals and asylum seekers fell through.

Some in the business community claim the Green New Deal is hurting development in Portland, but at least one city official said it’s too early to know the long-term impacts. 

City spokesperson Jessica Grondin said the unidentified location for the shelter was not technically classified as an emergency shelter. It would have required a change of use to shelter people for more than 180 days, which is the typical threshold for a permanent-use designation.

Federal Street
An 18-story apartment building under construction on Federal Street in Portland would not have happened if it hadn’t been approved before the city’s Green New Deal took effect, the developer said. (Portland Phoenix/Colin Ellis)

Grondin added that part of the building code in the Green New Deal applies to all new construction and renovation projects of 5,000 square feet or greater, to be owned or occupied by the city, or to be funded in whole or in part by the city.

“The existing building being considered significantly exceeded that threshold,” she said.

Grondin said the city is housing between 1,500 and 1,600 people a night, and the temporary shelter would have been created with assistance from the state.

A new 208-bed emergency shelter is being built on Riverside Street to replace the aging and often overcrowded Oxford Street Shelter. The new shelter is expected to open around next summer.

The city, meanwhile, is seeking alternatives for temporary shelter space.

The Green New Deal was part of a slate of citizen initiatives approved in 2020 and promoted by a group called People First Portland, a coalition that included the Maine chapter of the Democratic Socialists of America. The initiative changed Portland’s green building codes, requires contractors to hire a percentage of workforce employees as apprentices, and pay higher wages. It also requires construction to align with the 2019 Maine Uniform Building and Energy Code.

Jonathan Culley, managing partner at Redfern Properties, a development group with several high-profile projects including the Mercy Hospital redevelopment and an 18-story apartment building at 201 Federal St., said the Green New Deal is standing in the way of housing development.

Culley said one of the biggest impacts is a provision for inclusionary zoning, which previously required that 10 percent of new housing units be deed-restricted to people earning 100 percent of the area median income. After the Green New Deal went into effect, that jumped to 25 percent of units at 80 percent AMI.

“Because of this new inclusionary zoning provision, ground-up multi-family rental is dead in Portland,” Culley said.

The Mercy and Federal Street projects were approved before the Green New Deal, Culley said, but a third Redfern project – redeveloping 45 Forest Ave. into apartments – was not. That building, however, is eligible for state and federal tax credits. He said projects that aren’t eligible for those credits can’t proceed without workforce housing.

“They absolutely would not have gone forward,” he said of the Federal Street and Mercy projects.

Culley said the “sad irony” of the Green New Deal is that it will increase the city’s carbon footprint because it pushes development away from the walkable areas like the downtown to more “car-centric” developments in outlying communities.

But city officials said it is probably too early to know the long-term impacts of the Green New Deal on housing creation.

Christine Grimando, the city’s director of Planning and Urban Development, told a meeting of the Housing and Economic Development Committee there were some anecdotal instances of applications that changed or paused when the initiative passed, which is expected with an “abrupt change.”

“Now we’re watching to see how developers will recalibrate and see if this will work for them as a business proposition,” she said.

Grimando said changes to inclusionary zoning were one area where developers had concerns because the requirements became more demanding. She said the city had an unusually high number of construction approvals last year – nearly 1,000 – and she doesn’t expect to see the same activity again this year.

“We are seeing a reasonable amount of residential projects,” she said. “… It’s too early to say where the year will end up.”

Since 2017, Grimando said, the city has created just under 1,400 new dwelling units, 92 percent of which were in multi-family buildings. She said it was important to note there are other factors in housing creation, such as labor and material costs.

Quincy Hentzel, chief executive officer of the Portland Regional Chamber of Commerce, said it was “devastating” that the temporary shelter fell through because of the Green New Deal. She called the policy a “robust and complicated issue” that was included on a long list of such proposals that asked voters to vote up or down on complicated proposals with “10 to 15 pages” of explaining documents.

“If we didn’t have it before, this is proof that governing by referendum has absolutely catastrophic consequences,” Hentzel said. “The city can’t even open a temporary homeless shelter for asylum seekers and people experiencing homelessness. It’s a vicious cycle, and the DSA keeps bringing forward policies via referendum that have damaging impacts.”

Hentzel was referring to a new slate of policy proposals from the DSA – including raising the minimum wage to $18 per hour – that the group is hoping to on the ballot in the fall. The DSA turned in its petitions ahead of the deadline, with more than 2,000 signatures for each item.

DSA member Matt Walker said the Green New Deal is a tool that addresses one of the biggest issues facing Portland: affordable housing. 

He said he suspected the city blamed the Green New Deal for the loss of the temporary shelter because it didn’t want to participate in the required apprenticeship program. He said this was typical of “union-busting” the city has engaged in before, noting Merrill Auditorium replaced union stagehands with non-union workers.

Walker said there is no evidence that the Green New Deal has negatively impacted housing creation. 

“It’s what the city needs and we can’t say it’s having a harmful impact on production,” Walker said. 

Hentzel said there could be up to a dozen questions on the ballot this fall between the DSA proposals and recommendations from the Charter Commission. She said if a group like the DSA is actually trying to solve a problem, it needs to work with policymakers and with input from other stakeholders.

She said the DSA claims the city needs an $18-per-hour minimum wage because the city is too expensive a place to live, but in reality Portland is expensive because of referendums like the Green New Deal, which limit the housing supply.

“This is a moment people need to step back and realize these referendums will destroy our city,” Hentzel said.