PRESQUE ISLE, Maine — A new landlord loan program in Presque Isle has caught the attention of the Governor’s Energy Office.
The city’s program offers money for landlords to improve energy efficiency, with the idea that the savings will help both owners and tenants.
There are other types of landlord incentives in the state. The Maine State Housing Authority offers $750 to landlords for each rental property they place in the Housing Choice Voucher program, which for eligible tenants pays a portion of rent and utilities directly to the landlord. Other communities, including Bangor, employ grants to help landlords.
But a municipally governed loan program is a new idea, and one that state officials suggested could inspire similar programs throughout Maine.
“Presque Isle may be on to something unique,” said Scott Thistle, communications director for MaineHousing.
MaineHousing’s energy efficiency incentives focus on homeowners and not landlords, Thistle said.
The Presque Isle Winterization and Rental Modernization program will offer low-interest loans to landlords for energy efficiency and safety upgrades, which property owners will repay over four to 10 years.
The Governor’s Energy Office contacted Presque Isle officials once they’d heard about the program and suggested it might be a model for the rest of the state, said Galen Weibley, director of the city’s Department of Economic and Community Development.
“We’re very much aware of the governor’s climate resiliency plans,” Weibley said. “This is just one way the city of Presque Isle is looking to save and conserve for future generations.”
But city officials also hope it will battle increasing energy costs in an area where winter’s cold can leave some elderly and low-income residents wondering how they’ll survive.
People who rent apartments in Maine have rights under the state’s consumer law guide. There is one specifically for winter warmth. Under the Warranty of Habitability, landlords must maintain temperatures warm enough that they don’t make a normally healthy person sick.
The city modeled the concept on a first-time home buyer loan program it had in the 1980s. Borrowers were required to stay in those homes for 10 years and repay the loans.
Those repayments have been held in reserve. The idea for the new incentive loans was floated during discussions with Presque Isle’s rental property working group, and city leaders put up $100,000 of that reserve money to get it started.
Loans range from $1,000 to $20,000 per property. The funds must be used either to address safety code violations or for improvements such as new windows or doors, insulation, heat pumps — anything that will improve energy efficiency, thereby lowering landlords’ operating costs and what tenants pay for heat.
“Being in northern Maine, we know weatherization is something we need to prepare for,” Weibley said. “We’re trying to partner with landlords to button up their rental properties and offer savings on their operational costs, but it helps out tenants to keep them warm this winter.”
Applicants first go through an underwriting process before they are approved for a loan, and then landlords must submit paid receipts or invoices to the city in order to receive the money.
The city also requires collateral on each property that is being improved, Weibley said. The money will be paid back over a period of four to 10 years, depending on agreed-upon terms, and the repayments will revolve into other loans.
About 10 applicants have expressed interest so far. According to maps the city prepared last year, Presque Isle has roughly 1,100 rental units, including college dorms and nursing homes.
“In Presque Isle, we’re very fiscally conservative people,” Weibley said. “We do want to offer some generous terms, but we want to have this repaid.”