Jun. 15—Soon after Dani Nisbet bought her two-bedroom ranch in South Portland in 2017 she started wondering what could be built on the rest of her .65-acre, mostly wooded lot.
She knew housing was scarce across southern Maine. An artist, interior designer and hairdresser, she had heard heartbreaking stories from clients, family members and friends about their fruitless searches for homes to buy or rent.
“Everybody’s looking for housing,” Nisbet said. “My own kids can’t find housing. We need housing, plain and simple.”
So Nisbet met with the city Planning Director Milan Nevajda to find out what zoning regulations would allow on her busy, four-lane stretch of Broadway, near Exit 3 of Interstate 295. He told her she could add one or two units, but he knew a major zoning reform bill was making its way through the Legislature that could allow her to build even more.
But when LD 2003 took effect two years ago, it didn’t benefit Nisbet as hoped. Undaunted, Nevajda drafted new zoning for her neighborhood, pushing the residential density from 4 units to 8 units per acre. The City Council unanimously approved the change in February, making it possible to build four to five units next door to her house.
“It took a village, really,” Nisbet said. “Milan and the council and everyone else have gone above and beyond to create a place where I can create housing.”
Like Nisbet and Nevajda, people across Maine are trying to build housing on undeveloped land and in empty buildings that seem ripe to address the state’s entrenched housing crisis. There’s an all-hands-on-deck attitude toward what is increasingly seen as a statewide issue — not just a problem plaguing more populous southern counties.
But while some headway is being made, developers continue to struggle against neighborhood opposition, rising costs, labor shortages, high interest rates, government funding cuts and, more recently, tariffs on building materials that have made home construction more expensive and unpredictable than ever.
Still, some cities and towns are stepping up to the challenge laid out by housing advocates in late 2023, when they said Maine needed to produce 84,000 new homes within seven years. They are reconsidering overlooked, abandoned and otherwise unlikely places that could be turned into homes, including overgrown back lots, old schools, vacant department stores, disused parking areas and historic mill buildings.
RISING TO THE CHALLENGE
Maine is in good company as housing developers confront similar issues across the U.S., said Allison Thurmond Quinlan, an Arkansas-based architect and executive director of the Incremental Development Alliance. The group promotes putting housing where it fits in existing neighborhoods.
“In-fill housing as an approach, nationally, is about adding what’s missing in a community — apartments above shops, carriage houses out back,” Quinlan said. “It’s the kind of housing people need in a location they want at a price point they can afford. What that looks like is going to look different in every community.”
In Maine, communities are revamping regulations to remove roadblocks to housing development and taking advantage of statewide zoning reforms provided by LD 2003. The landmark legislation says four units can be built wherever a single-family home is allowed, and accessory dwelling units, or in-law apartments, can be added to any existing single-family home.
The challenges may differ across the state, but more communities are realizing their economic success — and survival, even — depends on building homes for all income levels. That’s especially true in a state with some of the oldest housing in the nation and a median home price that has hovered around $400,000 since last summer.
Recently completed projects in spaces that had been vacant include 165 market-rate apartments at the former Mercy Hospital in downtown Portland; 72 mixed-income apartments in the former Continental Mill complex in Lewiston; and 41 market-rate apartments in the historic Spinning Mill complex on the Kennebec River in Skowhegan, which includes a boutique hotel, event space and a Bavarian-themed restaurant.
At The Downs in Scarborough, developers of the 525-acre former horse racing facility have built 622 houses, condos or mixed-income apartments since 2019 and 223 additional units are under construction or planned. Town officials made way for the mixed-use development and other housing projects through a variety of zoning and policy changes.
Other planned projects include a 90-unit workforce housing complex in Bangor, to be built on city-donated land that was the municipal tree farm; and a 100-unit mixed-income affordable housing project in Portland, on the campus of the Barron Center, the city-owned skilled nursing and rehabilitation facility.
And in Augusta, city officials have approved a 50-unit, market-rate apartment building, hotel and retail space at the site of the former Kmart shopping plaza, within walking distance of the Capitol campus. Made possible with a city-approved zoning change and tax break, construction of Capitol Heights Plaza is expected to start this fall.
It’s not a new idea — repurposing old schools, former commercial buildings and vacant lots for housing — but it’s happening with extraordinary vigor and in places that didn’t recognize they had a housing shortage until recently.
“The last time we were building housing at a pace like this was the post-World War II era, and the federal government was building most of it back then,” said Nevajda, South Portland’s planning director.
OLD BUILDINGS, NEW PURPOSE
Van Buren, an Aroostook County town of nearly 2,100 residents, is one Maine community where municipal officials and developers are looking at old buildings to address critical housing shortages.
“We’re really hurting when it comes to market-rate workforce housing and senior housing,” said Van Buren Town Manager Luke Dyer. “We have plenty of low-income, subsidized housing — over 1,100 units. People are looking for homes we don’t have. We’re all out of balance.”
What’s missing, Dyer said, includes housing for older folks who are downsizing, including people who left Van Buren when they were young and want to move back as retirees. Also lacking is housing for middle-income professionals who could afford to pay more but can’t find what they’re looking for, including apartments and condos with modern amenities that require little upkeep.
To help fill those gaps, Dyer and other town officials are working with a private developer who wants to build 30 units of senior housing in the former Gateway Elementary School, which closed in 2009. Another developer wants to build 18 units of workforce housing financed through the Maine State Housing Authority. Both proposals are in the early stages and not yet public, Dyer said.
“We have a rocket industry developing up here that could bring in over 200 engineers, but they don’t want to live in a rundown place,” Dyer said. “People want to move here because it’s a great place to live. We want to be able to provide housing for them.”
Dyer is among those who say housing development must be a primary component of economic development.
“There’s a lot of development potential here,” he said. “But if you want people to come here and develop businesses here, they need a place to live.”
Dyer is working with the relatively new Maine Redevelopment Land Bank Authority, which recently gave the town a $25,000 grant to convert a vacant historic downtown building into the Acadian Arts Center.
Formed last fall by the state Legislature, the authority promotes the reuse of vacant and blighted properties across Maine. It has already met with 44 municipalities that want to redevelop fallow sites, including East Millinocket, Hartland, Presque Isle and Liberty. Many of the projects will include housing or aim to promote housing development nearby.
“Cities and towns are coming to us,” said Tuck O’Brien, the authority’s executive director. “They have properties that are a drag on the community because they aren’t being put to their highest and best use. If that use is housing, we’re here to make that use as feasible as possible.”
The housing potential of an old school is evident at Cony Flatiron Apartments, a 48-unit independent living complex in the former Cony High School in Augusta.
Redeveloped by Housing Initiatives of New England, the affordable senior housing project was financed with historic and low-income housing tax credits and shepherded through the approval process by city officials.
John and Brenda Pitcher moved into Cony when it opened in 2015.
“We love it here, and it’s great that they were able to save a historic building,” said John Pitcher, 83, a retired welder and lobsterman. Brenda Pitcher likes that a Hannaford supermarket is right next door and many other services are nearby.
“We call it our mansion,” she said, laughing. “Everything is so handy.”
WHY ISN’T THAT HOUSING?
If you’ve ever driven by an abandoned house, vacant lot or unused commercial building and wondered why, at the height of a housing crisis, people aren’t living there, you’re not alone.
In areas like southern Maine where housing has been scarce for over a decade, interest in vacant properties is brisk, especially since South Portland has been updating zoning to remove barriers to home construction and promote in-fill development.
“If it looks developable, somebody’s been asking about it,” said Nevajda, the city’s planning director. “Usually there are reasons it’s vacant or hasn’t been developed.”
Some properties remain undeveloped because the owners are unwilling or unable to pursue projects themselves. In some cases, community opposition has killed housing proposals, including projects in South Portland, Cape Elizabeth, Cumberland, Saco and Auburn.
Complicating factors that can deter site redevelopment include the presence of asbestos or other hazardous materials, prohibitive utility easements, deed covenants, lease restrictions, zoning regulations and environmental protections.
Tax policy and bank lending habits also can promote construction of one type of housing over another, said Quinlan, the in-fill housing advocate.
In Maine, where local taxpayers pay for schools, roads and other big-ticket needs, towns may favor larger, cookie-cutter apartment complexes that attract fewer tenants with kids, she said. Banks that view housing solely as a commodity may prefer to finance construction of large three- and four-bedroom single-family homes, even as demographics show about 70% of American households consist of one or two people, she said.
As a result, housing is scarce for young people just starting out, older folks who want to downsize and many people in between.
“We’ve lost a lot of housing diversity,” Quinlan said. “Houses are bigger than people really need. No one can move. We need a variety of housing choices for all income levels that are mixed into neighborhoods that are walkable and livable. That’s when communities start to thrive.”
HOUSING AT THE MALL
South Portland is attempting to address some of those barriers in The Maine Mall area.
The City Council approved zoning changes in 2017 that paved the way for 256 market-rate units to be built at the Latitude apartment complex on Clarks Pond Parkway. Additional zoning adjustments allowed Avesta Housing to build 116 subsidized apartments in the nearby Brick Hill neighborhood.
City officials also embraced a 2020 study by the Greater Portland Council of Governments that recommended adding housing on the mall property itself, but that has been tougher to pull off.
The mall’s owners are open to the idea, Nevajda said, and several developers have looked into building housing in the vast expanse of underused parking on either side of the JCPenney anchor store. One wanted to build 200 units. Another wanted to build 300 units.
But neither submitted a formal proposal, he said, ostensibly because they were unable to “make the numbers work.” Those factors can include financing, material and labor costs, contractor availability, the construction timeline and how much rent they could charge.
“There are many things that have to align perfectly,” Nevajda said. “There’s ample interest, land and community support. The rest of it just hasn’t come together yet.”
Some people also have asked Nevajda why a large swath of mall parking at Gorham Road and Philbrook Avenue remains vacant. That’s because Jordan’s Furniture, also an anchor store, has a lease agreement that prohibits development in that area if it would block passing traffic from seeing the store, he said.
Meanwhile, Dick’s Sporting Goods, which already has a store in the mall area, is expected to submit plans later this year to renovate and move into the former Sears anchor store, which the company purchased last year for $13.4 million. Dick’s hasn’t announced plans for the property and didn’t respond to an interview request.
Nevajda said he has talked with Dick’s representatives about adding housing at the Sears site and they weren’t opposed, but housing development isn’t their usual practice. He also has talked with the owners of Mall Plaza, where Dick’s is currently located, about developing housing there.
“We’re looking for opportunities to create housing anywhere and everywhere near the mall,” Nevajda said. “We will bring that option to the table every time.”
BUILDING HOMES IN BANGOR
Bangor is also striving to add housing in its mall area, along with various other efforts to encourage home construction in Maine’s third-largest city.
This month, the Legislature approved a bill that directs the Maine Redevelopment Land Bank Authority to help Bangor officials draft a mixed-use redevelopment plan for the mall property that would include affordable housing. The plan is due in January.
The city has already adopted zoning changes to promote accessory dwelling units, tiny home parks, boarding houses, permanent supportive housing and mixed-use development. The changes included reduced lot sizes, boundary setbacks and parking requirements in some residential zones and revised short-term rental regulations and mobile home park language.
It also has approved a tax break program for housing developments, is offering pre-approved home design plans free of charge and is making sewer and storm water infrastructure improvements near the mall. And it has established a committee of city department heads to identify tax-delinquent, vacant and abandoned residential properties and work to get them back on the market.
The city has even provided land for housing development. One of several projects in the works near the Bangor Mall is a 90-unit condo and apartment complex that Developers Collaborative of Portland is expected to start building later this year.
The firm also is developing the housing projects at the former shopping center in Augusta and the Barron Center campus in Portland. It responded when Bangor sought bids to build housing on its 11-acre former tree farm off Grandview Avenue, behind the Broadway Shopping Center. The city also is kicking in $2 million in federal pandemic recovery funding to cover the project’s infrastructure costs.
“We want to make sure that area is ready for development,” said Anne Krieg, Bangor’s development director. “We’re trying to remove all of the barriers that are standing in the way of good housing development in Bangor.”
FACING FUNDING CHALLENGES
But even when developers secure necessary approvals and financing, sometimes housing proposals fall apart.
In downtown Portland, Avesta Housing and Williston-Immanuel United Church were planning to redevelop and expand the church’s parish house into 31 affordable apartments. Now, the project is dangerously close to running aground after losing critical federal funding.
In March, when Congress passed a continuing budget resolution engineered by the Trump administration, it dropped nearly 200 grants that Maine’s delegation had secured last year.
The cuts included $2 million that U.S. Sen. Angus King, I-Maine, sought for the Williston-Immanuel project. Now, the plans are in jeopardy, said Patrick Hess, real estate development director for Avesta, a Portland-based nonprofit developer that operates over 3,000 units of affordable housing at 100 sites.
“That was a critical source of funding that we were relying on to move forward with this project,” Hess said. “We hold out a glimmer of hope that the funding will be restored, but we can’t plan on it. For now, the project is on hold.”
Avesta has reapplied for the funding with guarded hope that it might come through next year, he said.
Still, Hess points to Avesta’s successes, including the recent approval of 72 units of affordable housing to be built in Kennebunk with the help of Kennebunk Savings Bank, which donated a 12-acre site and $550,000 to the project.
Avesta also recently launched its “A Path Forward” program, wherein the nonprofit will buy rundown homes, renovate them and sell them to moderate-income, first-time homebuyers.
“Avesta continues to seek out opportunities to provide housing wherever it’s needed across Maine,” he said.
BEST INTENTIONS
Financing and other challenges also have dampened Nisbet’s plans to build additional housing on her property in South Portland.
After the City Council approved zoning changes that would make it possible, Nisbet started reaching out to banks and contractors to fulfill her dream of building four to five apartments or condos next to her ranch on outer Broadway.
She found that home construction costs have become more unpredictable than usual, in part because of tariffs on building supplies, both threatened and actual. She just can’t make the numbers work now, she said.
So, as much as she’d like to control what is built next to her house, she has decided to sell the .3-acre side lot. It was listed for $239,000. Two housing developers have shown interest, she said.
“Everything is so uncertain now, it’s more of a challenge than I anticipated, and I don’t have the experience or the ability to do this on my own,” Nisbet said. “My priority is to create more housing. If it isn’t done by somebody else, I’ll reconsider building it myself.”
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