Maine’s housing crisis is undeniable. With rising costs, regulatory burdens, and labor shortages constraining supply, too many Mainers struggle to find affordable housing. A recent state-commissioned report, A Roadmap for the Future of Housing Production in Maine, attempts to address this issue. Still, while it contains some promising recommendations, it also suggests costly government interventions that could do more harm than good.

Maine Policy Institute believes that Maine’s housing challenges are best solved by empowering the private sector and reducing government-imposed barriers rather than increasing bureaucratic oversight and subsidies. This blog post will explain the findings of the latest HR&A Advisors report and where they agree or conflict with a free market, light handed approach to housing regulation.

Where the Report Gets It Right

The report correctly identifies several significant obstacles to housing production, including high material costs, restrictive zoning laws, burdensome permitting processes, and a shortage of skilled labor. These are real issues that deserve real solutions.

MPI supports several of the report’s recommendations, particularly those that focus on reducing government-imposed barriers to housing development:

  • Streamlining approval processes to reduce delays and uncertainty.
  • Reforming building codes to lower costs.
  • Raising the threshold for state subdivision review, allowing for more local flexibility.
  • Strengthening the construction workforce through apprenticeships and improved licensing policies.

If implemented correctly, these policies allow the free market to respond more efficiently to demand rather than letting the government dictate development through heavy-handed mandates.

Where the Report Goes Wrong

Unfortunately, the report also includes government interventions that will distort the market, increase inefficiencies, and pick winners and losers rather than allowing competition and innovation to flourish.

  1. More Government Subsidies Will Backfire
    • The report suggests expanding government-funded housing programs, including a statewide housing fund for mixed-income development and increased subsidies for renters and homeowners. While well-intentioned, these policies ignore the real issue: supply constraints.
    • Maine already has government-subsidized housing programs, and these have led to artificial price inflation and reliance on taxpayer dollars rather than sustainable, market-driven growth.
  2. A Statewide Housing Appeals Agency Threatens Local Control
    • The recommendation to establish a statewide housing appeals process raises significant concerns about local autonomy. Maine’s diverse communities should retain control over development decisions and not be subject to a centralized bureaucracy dictating local growth.
    • This type of state intervention risks undermining property rights, local decision-making, and market-driven solutions to housing challenges.
  3. Government Land Sales Should Prioritize Market Efficiency
    • While identifying state-owned properties for housing development could be a good idea, this must be done through competitive, market-based processes rather than politically-motivated land transfers.
    • Ensuring open bidding and minimal government interference in these sales will lead to the best use of these properties.
  4. The true priority of housing reform should be lifting regulatory barriers
    • The report has the goal of finding policies that encourage housing development, but research on the housing market clearly shows that more burdensome regulations, even those aimed at creating affordable housing, reduce housing availability and affordability over time.
    • While certain housing regulations are likely inevitable, designing them to incentivize development in a nondistorting and fair way is a far more effective way to ensure a healthy and productive housing market.

A Better Path Forward

Rather than increasing subsidies and government oversight, Maine should focus on proven, market-driven solutions that allow housing production to flourish:

  • Deregulate Zoning Laws – Excessive zoning requirements artificially restrict housing supply and drive up costs. Loosening restrictions on minimum lot sizes, density limits, and multi-family housing can enable more construction where it’s needed most.
  • Reduce Red Tape in Development – Cutting the time and complexity of permits will allow builders to respond more quickly to market demand.
  • Encourage Private Investment – Instead of relying on state-funded housing programs, Maine should create an environment where private developers can build affordably without unnecessary barriers.
  • Strengthen the Construction Workforce – Expanding apprenticeship programs, streamlining licensing, and reducing barriers for skilled workers will increase the capacity to build new homes.

Conclusion

Maine’s housing crisis cannot be solved through more government intervention. The best path forward is to unburden private sector innovation, reduce regulatory obstacles, and allow the free market to provide the housing Mainers need. These realities are displayed when one looks at recent production growth in places like Florida, Texas, and many other places throughout the county. 

The report makes some valuable recommendations, but policymakers must resist the temptation to double down on failed government programs and instead embrace proven free-market solutions. Housing is a product much like many others, the more burdens you place on the free market, the less efficiently it will be able to respond to meet the public’s demand.