There’s a prime housing opportunity in Maine’s capital city.
It’s a modest home and barn for sale on nearly 7 acres stretching down to the Kennebec River on Oxford Street, close to “Downtown Augusta, Maine State House, office buildings, hospitals, colleges, airport, shopping, and highway,” according to its listing. The site is zoned such that it could fit nearly 500 low-income units.
But the landowner has listed it for nearly $2 million. At its last valuation in 2006, the property was valued at $145,000, with the land being $44,300 of that value. It’s unclear why the landowner, who declined to comment for this story, is listing it at such a high price, but the city says doing so will dissuade developers from building sorely-needed affordable housing there.
“This is an excellent opportunity for development,” Keith Luke, Augusta’s director of economic development said. “But the owners should be willing to show some flexibility, especially if they’re willing to be flexible on price.”
Developers Collaborative, a for-profit housing developer based in Portland, said it won’t make an offer on the lot, even though the group is already developing a 0.8-acre lot adjacent to it into 20 units of assisted living. Both lots are owned by the same landowner. The group purchased the 0.8-acre lot for $175,000 and will break ground on the project next year.
“It’s not something that will work for anything we’re doing,” Amanda Bartlett, the chief operating officer of Developers Collaborative, said of the 7-acre parcel. “When you’re developing affordable housing … having a lower acquisition cost, oftentimes, is kind of an essential element to project feasibility.”
Both the city of Augusta and the landowner have been great to work with, Bartlett said, and very encouraging of the group’s housing development proposal. But the price of this second lot is prohibitive. In more rural areas, particularly north of the Bath-Brunswick area, Bartlett said that affordable housing developers tend to look for land that has been priced below market value, or better yet land that has been donated.
That’s because rents in rural areas of the state are lower. Projects there “aren’t able to support debt in the way that they might be able to in Southern Maine,” Bartlett said.
Rising construction costs only make a low land acquisition cost all the more necessary. Previously, the city of Augusta has leased a parcel of land to Bartlett’s group for $1 a year, she said. The assisted living development project is expected to cost $5.5 million for just 20 units of housing, so the numbers just don’t work for the group to pursue a 500-unit development next door.
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Those units would go a long way in Maine’s capital city. Augusta is estimated to be short 449 family and 424 senior affordable housing units, according to a 2021 study by the city’s housing authority. Less than half of those issued a Section 8 housing voucher in Augusta are able to find a rental to use it on, the authority found.
The price of land in Augusta has a wide range: one property on the market costs $1,222 per acre, another costs around $431,000 per acre. Variables that affect price include where the lot is located, whether the property is connected to public utilities and how easy it’d be to develop. That $431,000 per acre lot, for example, is fully approved for 250 units of multi-family housing.
Similarly, much of the value of this Oxford Street site is in its location, close to the center of town and zoned for dense housing, the home and barn already built on site and its access to public water and sewer services.
“We’d love to see something happen there,” Luke said.
