A plan to bring 58 units of mixed affordable housing to the town of Bucksport is facing funding uncertainties that call its future into question.
It’s been more than a year since the town’s planning board approved plans by local nonprofit Penquis to build a total of 58 affordable housing units across two buildings behind an existing complex on Seminary Road, near downtown.
On Thursday, the group asked Town Council members to consider a 30-year, 75 percent tax abatement through a tax increment financing district, which it said would help make the finances work for projects it has had to change. The council denied the request, citing in part those changes to its plans that Penquis made for funding reasons.
“We’re still evaluating whether or not there’s a feasible project without the TIF agreement,” Penquis’ housing development operations manager Peter Malia said Monday.
The project stalling shows some of the challenges in building affordable housing in the area and has highlighted an existing need for housing for the “missing middle,” or people who don’t qualify for low-income rental assistance but can’t afford market rents.
Hancock County needs 3,700 more housing units by 2030 to catch up with underproduction in the past and future demand, an assessment by the county’s planning commission found earlier this year. Councilors agreed Thursday that Bucksport is “desperately” in need of housing, though they said it’s most needed for members of the workforce and those who make too much for low-income programs but not enough for rising market-rate costs.
Penquis’ original plans included an 18-unit building of one-bedroom apartments for people making 80 percent of area median income or less, and a 40-unit complex offering affordable one-bedrooms for seniors. Some of those units would have been available to people making 60 percent of the area’s median income and others, 80 percent.
The $15 million project could have broken ground in April 2027 at the earliest, according to developers.
The 18-unit project was put on hold this year due to costs and changes in the tax credit program that funds such applications, according to Malia. To make the 40-unit project more feasible, developers added the possibility of accepting Section 8 vouchers for up to 12 units.
There was some disagreement at Thursday’s meeting over whether the developers had changed course unexpectedly and if granting an abatement could be justified to residents.
Town Manager Susan Lessard said she had heard concerns about the condition of existing 1970s-era apartments onsite and the impression the developers wanted to move on to the second part of the project without finishing the first.
Penquis has put some money into them, but doing more will require signing an agreement with the town to access $500,000 of federal grant money through a separate project.
A tax increment financing agreement would have lowered operating costs and allowed the developer to take on more debt service. It also would have helped the application get more points through the competitive MaineHousing funding process, according to Malia.
“We’re really facing a lot of challenges trying to develop in this area,” he told the town’s economic development committee last week.
That agency’s current scoring formula favors projects in Bangor, making it harder to get funding in a town such as Bucksport, Malia said. Developers in eastern and northern Maine in general also find it more challenging to finance projects than farther south because they have to charge lower rents, meaning there’s less revenue and less ability for the developers to take on debt.
Even with a tax abatement, the project would have needed a handful of other funding sources.
Malia said Thursday’s vote was disappointing, but Penquis is still dedicated to bringing more housing to the area and hopes to partner with the town.
