Maine lawmakers voted to extend the life of a tax credit that supports the creation of new housing and preserves existing affordable units.
Last week, Gov. Janet Mills approved the bill, sponsored by Rep. Ambureen Rana, D-Bangor, which pushes the end date of the Maine Affordable Housing Income Tax Credit to Dec. 31, 2036. It was initially slated to sunset at the end of 2028.
The state tax credit supports the construction of new housing and preserves existing affordable housing in partnership with the Federal Low Income Housing Tax Credit. Since it was enacted in 2020, the program helped preserve 108 existing units of affordable housing across the state, with an additional 824 units either built or in the pipeline for construction.
“With support from my Administration and the Legislature, this credit has already helped deliver hundreds of affordable homes for Maine people,” Mills wrote in a statement Tuesday. “We have more work to do, but by extending it today, we are one step closer to ensuring every Maine person can find a safe, affordable place to call home.”
Most recently, Washburn used the credit last week to buy the Salmon Brook Meadows development, preserving 20 units of affordable housing for older adults in Aroostook County.
Extending the life of a program with a proven record of success comes at a time when Maine has a glaring need for more housing at all levels. A state housing study found Maine needs at least 76,400 new units by 2030 to make up for historic underproduction and meet future need.
“Extending the Affordable Housing Tax Credit will allow us to continue building more units that are desperately needed right now, particularly for working families, seniors and rural communities,” Rana said in a statement released Tuesday.
Aside from supporting new units, the tax credit has been a key funding source for groups looking to buy and preserve existing affordable developments when their initial owners want to sell.
This is often the case with developments created through the U.S. Department of Agriculture’s Section 515 Program, which was established in 1963. The program gave 1% interest mortgage loans to owners looking to create rural affordable housing, and typically included subsidies for low-income renters.
At its height in the late 1970s, the USDA financed the development of 35,000 such apartments a year nationwide.
More than 7,000 apartments in Maine are still part of the USDA’s Section 515 Program, but they’re at risk of becoming unaffordable as the mortgages mature and their original owners sell the buildings and retire.
That includes Main View Apartments in Orono, a 24-unit affordable housing building for older adults and people with disabilities that the Old Town Housing Authority bought and upgraded with help from the Genesis Community Loan Fund and the Maine Affordable Housing Income Tax Credit. This kept rents low for residents, all of whom use rental subsidies.
The town of Washburn also created a nonprofit, the Washburn Housing Development Corporation, to buy the 20-unit Salmon Brook Meadows property using the tax credit and help from the Genesis Community Loan Fund. The new owners also plan to make repairs and upgrades to the development to ensure it remains safe and accessible.
In the years to come, more local groups will need to repeat this process, using the tax credit, with hundreds more housing developments in Maine that are still part of the USDA’s 515 Program.
“Extending the tax credit means this practical, effective solution will continue to keep residents in their homes and ensure their stability in communities across Maine,” said Liza Fleming-Ives, executive director of the Genesis Community Loan Fund.
