In 2018, people in Deer Isle and Stonington were worried about available housing. They had been worried about it for years and would worry about it for years to come.
But out of one meeting that year, a group formed what would become the nonprofit Island Workforce Housing, which started building apartments in response.
By spring, the group will have added 22 units of housing at two sites to the island within five years of breaking ground on its first project. This summer, it will work on a new strategic plan refocusing its efforts for the changing needs of the next five years.
“It’s hard work, and it takes a lot of commitment,” board treasurer and founding member Peter Roth said. “But we’ve found it in our community. We’ve nurtured it.”
The island for years has faced an increasing shortage of housing affordable to local residents, pushed into overdrive by the pandemic, and an accompanying drain of young people off the island.
That presents an increasingly concerning challenge for the future of its community, schools, and workforce, local leaders have long said. But no public funding exists in Maine to build median income rental housing, and developers can’t break even on project costs otherwise. The group’s work shows one way a Maine community has been successful in starting to address a dire housing crunch.
Island Workforce Housing commissioned a 2019 study and conducted interviews to decide where to start its efforts and landed on median income rental housing, with a goal of building 30 new units.
Out of necessity, the group developed a unique funding formula: raise two-thirds of a project’s cost and finance the final third. When occupied, the developments are financially self-sustaining, with reserve funds for future maintenance.
The group raised $1.8 million for its first development, Oliver’s Ridge in Deer Isle — “which kind of staggered everybody,” Roth said. Apartments there are available for people working on the island and making between 70 and 120 percent of Hancock County’s median income.
Meanwhile, the pandemic had brought an influx of out-of-state buying power that upended the housing market across Maine, while short-term rentals also increased and took more housing out of long term availability.
“That really challenged the housing inventory on this island, which is finite,” said Pamela Dewell, the group’s executive director. “It’s a finite resource. We can’t exactly spread into any larger community.”
The rush may have slowed down slightly since then, she said, but the consequences linger.
The island is an attractive place for retirees and seasonal residents as well as remote workers. More than 40% of homes in both island towns are now seasonally empty, an interlocal housing task force report found in December.
At least 279 members of its workforce commute onto the island, some from 50 miles away or more; numerous employers have started offering housing themselves, and local businesses have donated to the workforce group.
“What has changed since I’ve come on is that housing has become even less affordable to moderate income people, especially first-time homebuyers,” Dewell said. “It’s just a goal that’s completely out of their reach at this time.”
She knows of two young families working locally who have moved off the island in the last several months because they couldn’t find housing. She also hopes the lower rents at the units will help tenants save up for a down payment on a local home.
Downtown Stonington is mostly dark on weekday evenings in winter, she noted – not just with businesses shut, but homes empty.
“The reality is Maine is the oldest state in the country,” she said. “As I become one of the older people … I especially find myself valuing the next generation and the generation after them, and just recognize the need to have that diversity.”
In Massachusetts, where Roth worked as a developer focused on affordable projects, state support for housing is much more robust, which he said is partly an economic development effort. Maine’s state support is more limited.
IWH’s next project is Thurlow’s Way, a 12-unit arrangement of modular buildings in Stonington, which just opened applications for island workers marking 80 to 140% of area median income and expects to be ready for tenants in June.
That means the nonprofit has now met about two-thirds of its original building goal. In recent years, separate plans have gotten underway to turn the former Island Nursing Home into apartments including workforce housing units; the nursing home closed its doors in 2021, in part because of a lack of housing for workers.
Looking ahead, the IWH board plans to regroup and refocus with a new five-year plan and a new staffing structure potentially focused on development. Roth said members will discuss ideas that include homes for first-time buyers, renovating existing houses and working with other towns on the Blue Hill peninsula, which faces its own affordable housing challenges.
IWH’s model may be replicable for other coastal towns with communities of affluent potential long-term donors, Roth said.
Not everyone on the island has bought in on the group’s work, according to Roth, and there’s some ill will locally about the tax breaks nonprofits receive. But in his view, the free market won’t fix the island’s housing problem.
“Maine really needs to pay attention to the needs of its working class communities to be able to remain competitive,” he said.