Ken Haley, general manager of M&H Construction, with a work crew building a modular home at the Rangeley North subdivision in Rangeley. Credit: Courtesy of Steve Hewins

A plethora of subdivisions have sprung up in the small Maine tourist town of Rangeley amid an acute housing shortage and high demand for weekend retreats.

One contractor and his associates have 150 lots for sale across five subdivisions in the Franklin County town, which is popular for outdoor activities on its lakes and mountains. The group is able to offer everything from site preparation work to plumbing and home completion, avoiding the labor shortages new homeowners often face in the bustling real estate market.

They are so confident of the current strong real estate market that they are building on spec, meaning they start building homes before there is a buyer and speculate the home will sell. When the homes are two-thirds built, they list them with real estate agents. It’s a plan that is paying off, with six already sold and five homes being built now.

The pandemic and tight housing market have spawned big housing plans in other areas of Maine as well, most recently with 900 proposed housing units in Kittery. It is unusual to see 150 lots available in a town of only 1,200 year-round residents, even though the population more than triples in the summer. Rangeley has benefitted as one of the more popular pandemic safe havens for out-of-state buyers, with 25 more students enrolling in its K-12 schools in 2020.

“It’s definitely helped our market to be a safe haven during the pandemic,” Ken Haley, general manager of M&H Construction in Rangeley said. “People come here to have a second home and recreate.”

Haley along with family members and colleagues own five subdivisions in the town, the largest of which is Rangeley North near the airport, with 137 lots. So far, six lots are sold and the group plans to build three more homes there. He already sold all 12 lots in two other subdivisions he and his wife owned.

While the group is building some higher end log cabin homes, they are focusing on less expensive modular houses that cost from $299,000 to $399,000. That’s just above the median sales price of $297,500 in the state in February.

Haley, with various partners, began buying the land for the subdivisions in 2003, but the real estate market cooled down and the Great Recession hit in 2008. They started selling the lots and spec homes in earnest again just as the pandemic took hold in Maine and the real estate market skyrocketed in 2020.

M&H Construction performs the site work including the foundation, utilities trenches and the driveways. Other partners dig the well and put in the septic. The modular homes are built by Ground Control Development of Rangeley and the log cabins by Ware-Butler Building Supply of Waterville, which owns lumber supply companies and Moosehead Cedar Log Homes.

Ken Haley, general manager of M&H Construction, in front of a log cabin being built in the Rangeley North subdivision. Credit: Courtesy of Steve Hewins

Ashley Brochu, who coordinates log-cabin building for Ware-Butler at two of the Rangeley subdivisions, said it is difficult for people to hire contractors on their own because workers are in short supply, especially in a rural Maine town. That’s an advantage the group has with collaborators for every part of the building process.

“It comes down to relationships,” she said. “Workers are available if you know the right people. It’s hard when people come up here and don’t have contacts.”

Haley said he hopes to build six more spec homes by the end of the year, but he can’t handle more than that. Other builders said they are booked for at least one year.

Permits for new dwellings more than doubled in the past couple years from 21 in 2020 to 51 in 2021, according to Bailey Beers, the town’s code enforcement officer. There were 39 internal plumbing permits granted in 2020, eight more than in 2019. Septic permits rose to 32 in 2020, up 68 percent over 2019. The town’s population was up 4.6 percent to 1,222 from 2010 to 2020, according to the U.S. Census Bureau.

Even though that is big construction and housing growth, Bruchu said the subdivisions aren’t taxing the town’s services too much because a lot of the people coming into the town are only staying for the weekend.

“The lots are a great asset to the community,” she said.

Paul Reynolds, who co-owns the Portage Tap House with his wife in nearby Oquossoc, agreed. Like many restaurant owners in Maine, Reynolds has had difficulty hiring employees over the past two years. The labor shortage is compounded in Rangeley because there is no place for them to live. He has rented two apartments for them, but is looking into buying land at Rangeley North on which to build rental housing for four employees.

Reynolds said getting builders on his own has been hard because they are being pulled in all directions by the real estate market demand, and most lean toward working on high-end homes.

He is still checking with the town on what he will be able to build on the land before buying it. If everything falls into place, he figures he would have to spend about $500,000 to get the rental units built, but they would have a 10 percent to 15 percent return on his investment over time.

“Housing will always be an issue,” he said. “And there’s not a lot of workforce housing.”

Correction: An earlier version of this story had an incorrect year for the rise of Maine’s real estate market.