A Maine mill town and outdoors destination will take stock of how many short-term rentals are active in the area and then decide whether it should cap them.
Millinocket had a population of around 4,100 residents at the last census. It’s a small town that has been characterized by regional mill closures, the economic decline that resulted and subsequent revitalization efforts focused on the forest products and outdoors industries.
The town’s proximity to some of Maine’s finest outdoor recreational opportunities, like Baxter State Park, has attracted new residents. As a result, home values in East Millinocket were predicted last year to be among the fastest climbing in the state. Lakefront camps nearby that were once accessible to average families are now unaffordable, local realtors say.
“[Prices and values] have gone up considerably, but of course, that’s from a depressed position,” said Dan Corcoran, designated broker-owner of the Millinocket-based North Woods Real Estate. “We’re moving properties just about as fast as we can list them.”
Millinocket has seen a boom in short-term rental activity in the last few years, Code Enforcement Officer Tom Malcolm said. The business has been a “major factor” in recent home sales, Corcoran said. Malcolm puts the number of these rental units at around 75, an outsized presence in a town with little housing stock and few long-term rental options.
Concerned with dwindling inventory and the safety risks unregulated rentals have posed for the town, officials have enacted an ordinance that will require property owners to register and license each unit annually for a $100 fee. No properties will be grandfathered in, Malcolm said.
The ordinance could be the first step towards a short-term rental cap, depending on what the town finds after reviewing registrations, Malcolm said. The policy, which went into effect Wednesday after planning board and town council approval and two public hearings, says a property owner cannot lease more than half of their building’s units as short-term rentals.
A more stringent cap on the overall number of units allowed would make Millinocket one of the few Maine communities to have taken that step, which has been decried by some residents and business owners as government overreach and by some housing experts as helpful but not addressing the true cause of housing unavailability — which is historic underproduction.
Bar Harbor and Kennebunkport, both pricey tourist destinations along the coast, have recently enacted short-term rental caps to preserve long-term housing options while inventory is low. Ski area towns Bethel and Newry have declined to cap these units as officials say their proliferation only helps the area economy, though Newry is weighing whether to register them.
It’s unclear which track this town will take. A severe housing shortage might be looming as new developments at the former mill site promise to bring up to 200 new jobs to the area, Corcoran said. There are only a handful of homes on the market today, when just five years ago he said there tended to be over 100 on any given day.
“Millinocket has evolved into a tourist area,” Corcoran said. “People have been investing in housing for short-term rentals, but I think that market is pretty well saturated. I don’t see a lot of growth there, but I do see growth in the long-term residential market.”
