PRESQUE ISLE, Maine — Presque Isle’s first new, multifamily residential development in more than 40 years will soon bring 18 apartments to an area in dire need of affordable housing.
Owner and developer Dwayne Gagnon of Caribou will open Elm Estates for middle-income renters sometime this summer at a site between Elm and North streets.
The apartment complex comes at a time when, like all of Maine, Aroostook County needs more housing for workers, older residents and others. But there’s a rising challenge for people making middle-level income: They make too much for government subsidies, but not enough to afford expensive dwellings. That’s why Gagnon chose to build for that group.
Still, it’s a tough prospect because of the ever-rising costs of supplies and labor. Building costs are so high that it’s hard to break even, which is why Presque Isle hasn’t seen newly built multifamily housing since the 1980s, he said.
“Definitely more needs to be done to increase the supply of housing in the area, but without multiple investors and government intervention, it’s almost impossible because of the return on your investment,” he said.
Northern Maine is not alone. Bangor, too, has struggled with housing needs. In all of 2024, it saw the addition of 75 new units. And while Ellsworth has welcomed new middle-income housing, neighboring communities have rejected some development.
Gagnon started his company, East Town Rentals, in November 2021. He also owns and manages other properties in Presque Isle, as well as Limestone and Fort Fairfield.
Labor costs have doubled in the past five years, brought on by the COVID-19 pandemic, and have never resolved, he said. Machinery and building supply costs have also risen, creating a ripple effect.
Elm Estates has a price tag of $5 million, Gagnon said. He put up $1.7 million and garnered a $3.3 million deferred loan through Augusta-based MaineHousing. The 45-year loan will be renegotiated at the end of the term, he said.
Middle-income people could include workers, retirees or people who need to relocate to Presque Isle because of medical services or schools, he said. The challenge is to keep rents affordable.
“I’m just a local guy from Caribou trying to find a way to increase the housing supply,” he said. “It’s difficult to do.”
Rents will be based on MaineHousing’s 80 percent adjusted gross income limits, Gagnon said. Those guidelines set a maximum rental at $1,275 for a one-bedroom apartment and $1,530 for two bedrooms.
At the Presque Isle construction site, three six-unit apartment complexes and an office building are up and in various stages of exterior and interior work. A sign on a makeshift construction road just off North Street says Elm Estates will open soon.
Already, Gagnon has 50 people on a waiting list for the 18 one- and two-bedroom apartments.
The units have washer and dryer hookups and state-mandated sprinkler systems — another thing that is driving up costs throughout Maine. Heating is electric so they’re considered environmentally “green,” he said.
The project has been two years in the making, starting in June 2023 when the Presque Isle Planning Board approved site development at the 7-acre parcel. Gagnon said that’s enough land to build another 18 units of housing should he decide to do that.
Presque Isle doesn’t have a housing inventory list, but a state report said Aroostook County needs 2,080 units, said Tim St. Peter, the city’s deputy director of innovation and economic development.
“This will open 18 units for the market, potentially moving the cycle of housing,” St. Peter said. “Currently there are very few units available in the Presque Isle, so an additional 18 units are a welcome addition.”
A 2024 study showed that Aroostook and Washington counties, two of the state’s most rural areas, will have to ramp up housing construction by 30 percent this year, the Maine Monitor reported.
In order to do that, more cooperation from state and local government would help, Gagnon said. He suggested communities should build out water and sewer connections before developers come in, and there should be fewer regulations, like requirements for costly environmental studies.
East Town Rentals will own and manage the apartments and has built an office on site, Gagnon said. He plans to contact people on the waiting list and send out applications in June.
“Lack of housing is the number-one concern. If you talk to any local business, or anyone who wants to come here, [they ask] ‘Is there enough housing,’” he said. “I wish I could do more, but this is a start.”
