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.
Owners of historic buildings in Maine could soon receive financial relief when they make necessary improvements to their properties if a proposed bill becomes law.
The proposed bill seeks to expand an existing state tax credit for rehabilitation projects on historic properties. LD 435 has passed both the Senate and House and awaits funding from the Legislature’s appropriations committee, according to Tara Kelly, executive director of Maine Preservation.
The proposal aims to alleviate some of the financial burdens residents face when they want or need to make improvements to their homes, said Kelly. This would be especially useful in a city like Bangor that’s full of historic homes. City leaders want owners to maintain them appropriately, but that often comes at a high cost.
“It’s important for us to retain these historic districts because they’re part of our story as a city,” said Anne Krieg, Bangor’s development director. “It costs a lot to retain historic elements, and we hope people do, so it’s important to be able to at least offer them the same credit that commercial properties get.”
The existing state tax credit is designed to help small-scale property owners on projects that cost up to $250,000. That often doesn’t go very far when it comes to fixing up an older home, so it has only been used a dozen times across the state, according to Kelly.
To fix this, the proposed bill would expand the tax credit from 25% to 30% of the project cost and make it apply to projects that cost up to $1 million.
“Overall, it makes the small tax credit incentive much more workable,” Kelly said.
The hope is that someone who owns a downtown commercial business in a historic building, for example, can use the tax credit to help create apartments in the upper floors that may be empty and unused now, Kelly said.
Creating housing in existing buildings is both cheaper than building something from scratch, Kelly said, and makes full use of properties in central locations that may be sitting empty due to financial barriers alone.
“We should be incentivizing housing in existing buildings,” Kelly said. “We want preservation to be part of the solution in the housing crisis.”
The proposed bill would also create a historic homeowner credit for owner-occupied properties eligible to be listed on the National Register of Historic Places. Census data estimates there are more than 200,000 homes across Maine that are old enough to qualify, Kelly said.
This credit would give a homeowner 25% of their expenses for exterior repairs costing between $5,000 and $250,000. But, it only applies to year-round residents who make up to $120,000, Kelly said.
Homeowners could receive another 5% booster if they have an affordable housing unit on the property, or if they’re outfitting a vacant building to become housing.
This would mean a homeowner in one of Bangor’s historic districts who spent $100,000 replacing the windows on their home would receive $25,000 back. If there’s an apartment above the garage of the home, the owner would get $30,000.
Improvements to their historic homes can be especially pricey due to the rare materials and a limited number of contractors who can do the work, Krieg said.
A homeowner in a Bangor historic neighborhood encountered this when he needed to replace his aging slate roof, and used a fake slate alternative, as it was a fraction of the price of the real thing. The action launched a months-long squabble last year with the Bangor Historic Preservation Commission, as local rules required the homeowner to replace elements of his home with the same material.
While other state and federal tax credits for historic commercial properties have been “a major boon” for downtown Bangor, Krieg said the state lacks sufficient support for residential property owners looking to maintain their historic homes.
This is especially apparent in Bangor, as most of the city’s historic districts encompass residential neighborhoods, Krieg said.
“One of the reasons why people want to live in Bangor is because of its neighborhoods,” Krieg said. “They all have their own subculture — it’s where people want to be.”
