SOUTH PORTLAND — City councilors ordered formation of a task force to address rising rents and dwindling affordable housing options in the city.
Kessler asked for government intervention in the form of some type of rent stabilization.
According to the U.S. Department of Housing and Urban Development, Kessler said in a letter he presented to the council, families who spend more than 30 percent of their income for housing “are considered cost-burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care.”
The average rent for a two-bedroom unit in the city is about $1,350 a month, according to Kessler’s findings. For the average South Portland family to not be burdened by rent, it would have to make at least $54,000 a year, Kessler told councilors.
According to 2014 U.S. Census data, the mean income for households that rent was about $35,000 annually, he said, which leaves a gap of about $19,000 that families don’t have for basic necessities.
“Forty-seven percent of the city is already paying more than 30 percent of their income towards their rent,” he said. “Shockingly, about a quarter of renters are putting more than 50 percent of their income toward rent.”
“We need city government to do everything possible to create more housing in South Portland and create more stability and supply in the market,” Kessler said.
Richard Berman, a retired real estate developer who developed the Brick Hill neighborhood in 2006 with the help of an affordable housing tax increment financing district, told councilors Monday that the problem is a lack of incentives for developers to build housing targeted to serve families in the $35,000-$40,000 income range.
There is a need for a lot more low-income housing, too, Berman, of Cape Elizabeth, said Tuesday morning by phone. But there are a variety of federal and sometimes local tax credit incentives for that bracket, which means the supply will continue to grow.
In the greater Portland area, in general, he said, there is a lot more low-income housing to choose from than middle-income housing, and “it’s getting to be a crisis.”
To fill in the gaps, Berman urged councilors Monday to “take a leadership position in the region,” and create those incentives, through housing tax increment financing districts, inclusionary zoning, instituting density bonuses for affordable rentals and expediting low-cost approval processes for housing.
Beyond that, the city should put restrictions on middle- and low-housing credits, he said, to prevent developers from “taking complete advantage of the incentives with no controls.”
But Britt Vitalius, president of the Southern Maine Landlord Association and owner of Vitalius Real Estate Group in Portland, told councilors “rent control is a very blunt tool.”
“It’s a supply-and-demand issue, ultimately,” Vitalius said. “So if this is an issue, we need to focus on how to get more supply, not restricting the rights of our residents, which certainly will hurt the value. At the same time we would be helping tenants, we’d be hurting the value (for) the owners.”
Mike Halsey, executive director of the South Portland Housing Authority, told councilors that rents in South Portland “are rising faster” than those in the rest of Cumberland County and the state.
“Gross rents in South Portland have risen by 14 percent since the bottom of the recession in 2009,” Halsey said. “Meanwhile, the income for renters is flat.”
All of the city’s affordable housing developments have no vacancies and lengthy waiting lists. The city shares its Section 8 housing voucher program with Portland, Auburn, Westbrook and Bath. There are more than 7,000 people in the program; 630 are South Portland residents.
Thirty-eight percent of the residents issued vouchers last year were not able to find residences “because the rents were too high for what we pay,” Halsey said.
Councilors agreed that creating more housing would be a step in the right direction, but disagreed on whether rent stabilization would help or exacerbate the problem.
“I do think housing stock is the answer,” Councilor Claude Morgan said. But, “it’s pushing the ball uphill for rent stability or rent control. I do not think this town is ready for rent control.”
Councilor Eben Rose said agreed that more housing is needed over the long term. But to quell the “immediate crisis,” he said, instituting some measure of rent control seems reasonable, such as “prolonging the amount of time that eviction notices could be enacted (to) give renters a little bit more space.”
“I don’t think it is as simple as supply and demand,” Rose told Vitalius. “I think there are some very exploitative forces at play.”