Housing
This section of the BDN aims to help readers understand Maine’s housing crisis, the volatile real estate market and the public policy behind them. Read more Housing coverage here.
Another 41 units of affordable housing for seniors was approved in Bangor, but it is coming years later than the developer initially planned.
The Bangor Planning Board on Tuesday awarded Penquis a permit to build 41 units of affordable housing on Milford Street Extension, a short road that runs from Essex Street to the Mary Snow School parking lot.
Penquis now needs to secure funding for the $12 million project before crews can break ground, but the organization hopes to launch construction next summer, according to Larry Rogers, Penquis’ Housing Development Director.
The four-story building, which will be called Broadway Heights, is the second phase of a Penquis development that aims to bring at least 80 new units of affordable housing across multiple buildings tucked behind Bangor’s Mary Snow School. But the apartments will be built years later than the nonprofit planned due to rising construction costs.
The situation is one example of how developers are working to bring desperately needed housing to Maine, but their efforts are hampered by rising costs of construction materials and labor shortages, among other challenges. Meanwhile, the dearth of housing locally and statewide are forcing many to pay more for rent than what they can afford or stay locked in homes that don’t fit their needs.
“Everybody knows housing is very expensive right now,” Rogers said. “There’s a large shortage of housing that we need to fill and this is a drop in the bucket, but these projects add up to solve the problem.”
The building is expected to hold 41 one-bedroom apartments for Mainers 55 and older earning up to 80% of the area median income, which the U.S. Department of Housing and Urban Development sets annually. In Bangor, this means one person earning up to $59,650 could live there.
While the new units will be available only to older adults, Rogers said the project will make more housing available for younger families because many of the future tenants will likely leave larger homes that younger families can move into.
Penquis first announced plans to build new units in that area in early 2020 by asking the city to rezone the land to allow various types of housing to be built there. The city agreed, despite opposition from neighbors who feared developments could reduce the market value of nearby properties and bring more traffic to an area where children play.
The following year, Penquis asked Bangor city councilors for $200,000 in grant funding to help get the project off the ground amid rising construction costs. At the time, the organization credited a labor shortage, an increase in the price of lumber and new costs associated with running power and water to the Milford Street site.
But the organization didn’t break ground on the first building until mid-2024, despite announcing in 2023 that construction would launch that year.
Crews are still working on that first building, Milford Place, which offers another 40 units of affordable housing for seniors across the street from where Broadway Heights will be built. Construction should wrap up by next April. Penquis hopes to begin leasing the units next summer, Rogers said.
“We’ve already had folks calling and asking about it even though we’ve done no advertising of any kind,” Rogers said. “There’s such a huge need for housing at all levels.”
Rogers attributed the delay to financing gaps, as the price to build has jumped significantly from when these projects were first planned to when the nonprofit needed to secure financing. He noted that Newton Place, a 40-unit apartment building on Grandview Avenue that Penquis opened in 2021, cost just $8 million to build.
“Now, that’s $12 million and in some cases, we have projects that are $15 million,” Rogers said. “Prices have almost doubled in some cases, and that’s hard to stay ahead of.”
Penquis hopes to build a third apartment building set behind Milford Place, but that project can’t begin until construction of the first building is finished, Rogers said. Additionally, it’s uncertain how many units the third building will hold and what type of residents would live there.
“We thought about doing family housing there, but there are some density issues that we have to solve to maximize the amount of housing we can put on that space,” he said.