MaineHousing on Tuesday announced 129 new affordable units headed for Lewiston and Portland, but it’s the last new housing the agency will be able to finance using state funds unless the Legislature approves new resources for affordable housing.

The quasi-state agency has awarded over $13 million to help fund three projects — including $2.6 million for the redevelopment of part of Portland’s historic Time and Temperature Building.

The project, led by Developers Collaborative, would add 41 units of senior housing in the annex, or back portion, of the 14-story building at 477 Congress St.

The other two projects, each receiving $5.4 million, would add a combined 88 units in Lewiston — 44 at the former Martel School and 44 at the corner of Ash and Bates streets downtown.

The $13 million also marks the depletion of an important pot of money for affordable housing development.

“Resources approved by the Legislature are now exhausted,” MaineHousing said in a statement.

The lack of funding means seven additional projects that would have added more than 260 affordable units were rejected, the organization said.

This latest round of financing allows developers to leverage federal low-income housing tax credits. The subsidy was created along with the Affordable Home Ownership Program and the Rural Affordable Rental Housing Program as part of a $100 million effort to boost housing production in the state.

Once all the projects are completed, the three programs will have added nearly 900 affordable units for rent or purchase in the state and an estimated $316 million in economic activity, according to MaineHousing.

MORE MONEY NEEDED

But without another infusion of cash, the building boom of the last few years is expected to bust.

“Without additional state funding or an alternative to it, MaineHousing’s current production pipeline for affordable housing will begin to taper dramatically in the coming years,” said Dan Brennan, executive director of the housing authority.

Currently, the housing authority is able to produce about 750 new units each year. Without it, production is expected to be slashed to 250 to 350 units annually by 2027.

Greg Payne, the governor’s senior housing adviser, called the efforts of the last few years “historic,” but said more action is needed to “maintain this momentum and ensure that Maine people of all incomes can afford to own and rent a home.”

The depletion of the funding is a blow to the state’s ambitious goal of adding 84,000 new homes between 2023 and 2030.

However, the Legislature is considering several bills that MaineHousing believes could help refuel the subsidy programs for affordable housing and also reduce barriers for additional development of all types.

One bill, LD 1082, would increase the real estate transfer tax on properties that sell for more than $1 million and direct some of the surplus revenue into a dedicated affordable housing fund.

The bill, proposed by Maine House Speaker Ryan Fecteau, D-Biddeford, would increase the transfer tax, which is assessed when a property changes hands, from $2.20 to $6 per every $500 of valuation over $1 million — higher than the $5 Fecteau originally proposed. Of that money, 30% would go to MaineHousing. The bill is included in the state budget.

Another bill, LD 1829, combines a number of zoning reform bills proposed this session and aims to clear up some of the confusion and holes created by 2023’s landmark bill, LD 2003, which legalized up to two accessory dwelling units on all single-family lots statewide. The proposal would allow for even more ADUs while reducing lot minimums and increasing density allowances in “growth areas.” It would also reduce or eliminate some of the red tape and permitting barriers for developers. The bill has received preliminary approval from both chambers and awaits second votes.

FINALLY TIME FOR TIME AND TEMP

Some of that red tape — and the associated high building costs — has created a headache for developers trying to get projects off the ground.

That seems especially true of the string of developers who have, over the last 20 years, tried to revitalize the struggling Time and Temperature building.

Kevin Bunker, founding principal at Developers Collaborative, is the latest to take on the the long vacant high-rise, but he believes he’s finally cracked the code: breaking it into pieces.

Bunker will develop the back half of the building into 41 units of affordable senior housing, while another developer (Bunker says it’s a hotelier) tackles the beloved tower. Chris Rhoades, the building’s co-owner, did not respond to an email asking about plans for the rest of the building.

Bunker estimated his portion of the project will cost about $16 million, with the bulk financed through state and federal tax credits.

That piecemeal approach is fairly common in larger cities, but is “pretty innovative” for Portland, Bunker said.

Multiple developers have touted plans for the 101-year-old building for the last few years with various combinations of hotels, apartments, condos and retail space. Bunker has been one of them.

He initially bid on the building in 2019, but lost the auction to Rhoades and his business partner Drew Preston.

Then, in 2023, Bunker went under contract with plans to turn it into 200 to 250 affordable apartments but wasn’t able to make the numbers work and had to abandon the project.

But it was already “in his blood” and he couldn’t shake it.

“I originally got kind of sucked in by the idea that somebody had to save that building,” Bunker said. “It’s an amazing building right next to city hall, right in an area of the city that really needs some investment.”

When Rhoades approached him about taking on a smaller portion of the building, he jumped at the chance.

“I like to take on things in Portland that nobody else can do,” he said.

If all goes according to plan, Bunker hopes to see the units available for rent two years from now. 

“It’s not happening in quite the comprehensive way that I’ve envisioned at various times,” he said, (but) this building means a lot to me.”