PRESS RELEASE

FOR IMMEDIATE RELEASE
March 4, 2025
Contact: Jacob Posik
Director of Legislative Affairs
Office: 207.321.2550
Cell: 207.240.7064


New Analysis Quantifies Costs of
Local Regulations on Maine’s Housing Market
Burdensome rules stifle housing development and must be eliminated to ensure availability and affordability in Maine’s housing market 

AUGUSTA, Maine – Maine Policy Institute today released Under Construction: Fixing Maine’s Self-Imposed Housing Crisis, its newest publication which quantifies the costs of local zoning and land use regulations and their impact on affordability and availability within Maine’s housing market. The analysis was performed by Professor James Siodla of Colby College and Maine Policy analyst, Harris Van Pate.

The reports key findings include:

  • Towns with land use zoning have higher average home prices than unzoned towns. In 2023, towns with land use zoning had roughly 7% higher home prices than unzoned towns. 
  • Since 2020, towns with land use zoning have permitted nine fewer units on average than their unzoned neighbors. Despite housing demand increasing, many towns in Maine have reduced housing production rather than increased it. 
  • Stricter minimum lot size requirements correlate with significantly higher housing costs. A 10,000 square-foot increase in minimum lot size is associated with a 4% increase in average home prices. 
  • With the average home price in Maine over $400,000 in 2024, Maine towns could reduce their minimum lot sizes by 10,000 square-feet and save the average homebuyer approximately $16,000. 
  • In 2023, towns with minimum lot sizes had almost 35% higher average home prices than towns without these requirements. 
  • Policies such as inclusionary zoning, rent control, and short-term rental restrictions hinder rather than help the housing market by reducing supply and increasing prices. These policies, primarily enacted in Portland, should not be replicated by other Maine jurisdictions. 

The three-part report provides a literature review on various local regulations on the books in Maine towns, multiple analyses quantifying the costs of local regulations on average home prices, and recommendations on how state- and local-level policymakers can deregulate zoning and building codes to improve Maine’s housing market. It also includes specific analyses on local regulations enacted in Maine’s largest cities of Portland, Lewiston and Bangor.

The report’s specific local-level policy recommendations include:

  • Reducing zoning and land use restrictions, including minimum lot size requirements, parking requirements, setback requirements, and height restrictions.
  • Eliminating or rejecting policies which have proven to reduce the availability and affordability of housing, including rent control, inclusionary zoning, short-term rental restrictions, and energy efficiency mandates. 
  • Improving transparency and simplicity in local regulations by maintaining easy to access and navigate code and zoning maps, of which the city of Auburn serves as the best example in Maine. 

The report’s specific state-level policy recommendations include:

  • Exempting construction materials from the statewide sales tax.
  • Encouraging by-right development.
  • Enacting third-party permitting to increase permitting efficiency.
  • Establishing a statewide housing or land use appeals board.
  • Increasing access to manufactured homes. 

“Maine faces a significant housing crisis, and it’s time for elected officials to get real about solutions,” said Maine Policy CEO Matthew Gagnon. “Instead of following in the footsteps of Portland, which has some of the most harmful local policies in Maine like rent control and inclusionary zoning, towns should chart their own path and begin by reducing rules like minimum lot size requirements, parking requirements, setbacks, height restrictions, and more to open their borders to real development.

“This report makes clear that the combination of unnecessary local regulations in zoned towns versus unzoned towns, as well as towns with large minimum lot requirements, significantly impact home prices and limit new construction. The easiest way to combat these challenges is to deregulate at the local level,” Gagnon said.

Click here to read the full analysis.

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Maine Policy Institute is a nonprofit, nonpartisan organization that works to expand individual liberty and economic freedom in Maine. Learn more about our work at www.mainepolicy.org.