PORTLAND, Maine — Locals aren’t surprised to learn the ironic fate of the city’s newest housing development.
A project that was built as a 14-apartment complex at 54 York St. will now become a luxury hotel. The appeal, developers say, will be that it “feels like home.” It will join four other hotels in a half-mile radius of the site in Portland’s historic Old Port neighborhood.
“We’re surrounded by hotels,” said Susan Adler, 77, who lives across the street from the site. “We don’t need another hotel. We really need housing.”
The developers behind the housing project handed the complex over to hospitality management company Fathom Companies in May. The pivot came in response to “trends and demands” in the market, Brandon Hussey, Fathom’s vice president of hospitality management, said.
City officials are upset about the change, with one planning board member calling it a “bait and switch” at a meeting last week. But the use is allowed and the board could do nothing to stop it. The shift came in part due to city housing policies that made a hotel cheaper to build.
In 2020, Portland voters passed a “Green New Deal” aimed at increasing affordable housing and environmental building standards. As part of it, all housing projects with more than 10 units are subject to inclusionary zoning, which requires a developer to rent 25 percent of units at 80 percent of the area median income or pay a fee.
Right now, that fee is $177,559 per unit. The fee is only $4,692 per room for a hotel subject to inclusionary zoning. That’s leading some to believe that the city’s policy disincentivizes privately built multifamily housing in favor of hotels or subsidized projects.
“The inclusionary zoning changes that happened with the Green New Deal probably made it more enticing to convert this from residential to a small hotel,” Brandon Mazer, a lawyer, planning board member and city council candidate, said.
There is some evidence that the new housing laws have deterred developers, although a city memo in 2022 said it was too early to gauge the full effects.
Of the 40 major site plan approvals in Portland since 2020, only three projects have been subject to the ordinance, noted Quincy Hentzel, the executive director of the regional chamber of commerce.
The rest either have fewer than 10 units or are being subsidized by the state housing authority, or scrapped plans to become multifamily housing altogether.
“These policies really drive our ability to develop housing, and if it’s not working, we need to revisit it,” Hentzel said.
Since voters made the changes at the ballot box, the city council can’t make changes for at least five years. The challenges the ordinance presents to development “continue to be heard” in the meantime, Kevin Kraft, Portland’s planning and development director, said.
Hussey of Fathom rebuffed criticism by noting that a hotel was an allowable use. His company will call it The Weldon. It is being marketed as an “urban escape that feels like home” and “a home away from home,” according to marketing materials presented to the planning board.
That is insulting to James Stump, a 39-year-old construction worker who was in the neighborhood on Friday. His rent was recently raised another $150 this year to $1,600 a month, he said. Despite “decent pay,” he barely has any money left over each month after paying bills.
He has chosen not to renew his next lease, and will be moving to Gray instead.
“It’s not worth it anymore,” Stump said. “I don’t see how the line cooks, the people that make Portland work can make this sustainable. There’s droves of us leaving.”
