Under Construction: Fixing Maine’s Self-Imposed Housing Crisis

Section 3: Policy Recommendations

Introduction

While most of this report focuses on what Maine cities should not do, the following section concentrates primarily on favorable, pro-market policies that municipalities can implement. It also highlights which American cities best implement pro-market and pro-housing policies. Both local and state-level policies in Maine can be improved to better incentivize housing development, and the good news is that there are multiple examples of jurisdictions throughout the country that encourage housing development through sound public policy. 

For several reasons, the primary leadership on housing policy should be at the local government level rather than at the state level. One is that local governments will be more responsive to local problems than cookie-cutter statewide policy mandates. Another problem with Maine state government taking the leadership role in housing was illustrated during the rollout of LD 2003, where localities that weren’t on board found myriad ways to circumvent the law’s requirements. Without local government buy-in, state government action will be largely ineffective.

Lastly, local leadership allows for more diversity and experimentation with policies to see which are most effective. Because pro-market housing policies are so underappreciated by many regulators, it will likely take experimentation to find the most effective combination. Statewide mandates don’t allow for experimentation like this, making it more difficult to analyze the potential positive or negative effects of policies proposed and adopted at the local level. 

That is not to say that Maine state government has no role to play in housing policy creation, as there are several things state governments can and should do to encourage development. However, many of these policies are far less impactful on housing markets than local government action and largely consist of reducing the regulatory burden on developers and streamlining the permitting process.

Cities With Pro-Housing Policies

Auburn, ME

The city of Auburn is the best example municipality in Maine, which has been discussed before for its highly transparent housing map and policy. Auburn has a variety of pro-market policies, mainly from the term of Mayor Jason Levesque, who set the goal of making Auburn the “YIMBYest city in America.” For context, YIMBY is short for “yes in my backyard,” which is the opposite of NIMBY or “not in my backyard.”

Levesque did this in several ways, one of which was making significant modifications to how much land in the city of Auburn was in certain low-density zones and loosening those restrictions. He also prioritized transitioning older nonresidential buildings into multiple residential units and improved ADU and multifamily allowances before LD 2003 went into effect. Lastly, Levesque transitioned part of the city to a more form-based code, which allows for more mixed uses in an area by only prioritizing the physical appearance of buildings instead of focusing on their use.

These policies have been largely successful, and Auburn saw new highs in construction permits since these changes were enacted. This has encouraged both population and business growth in the city, with manufacturing in Maine having grown by over 10% since 2019, many of those jobs focused in Auburn. While there are few examples of recent pro-market housing policies being instituted in Maine, Auburn has done well in encouraging the development of new housing and businesses in the city.

Houston & Austin, TX

Outside of Maine, there are even better examples of pro-market cities. Houston and Austin, Texas, have effectively employed pro-market policies to encourage local housing development in ways that have not been attempted yet in Maine. Many advocates for statewide housing policy mandates argue that Maine’s home rule policy gives local towns too much control, which naturally leads to NIMBYism. However, Texas is also a home rule state. Although their cities and towns have similar levels of local control as Maine, their cities have still adopted much more pro-market policies, showing that the issue is local and cultural rather than one that inherently requires state-level intervention.

One might argue that Texas’ home rule provisions are more restrictive than Maine’s, as Texan cities need a certain population to qualify. However, both Austin and Houston are qualifying Texan home rule cities, which means that this distinction is somewhat irrelevant when considering how these two cities compare to Maine localities.

Houston’s population has seen a massive boom since COVID, in part due to the South’s, and especially Texas’s, refusal to engage in more restrictive pandemic shutdown policies. Houston’s population, in particular, has grown faster than most of Texas and is currently the second fastest-growing metro area in the United States. This growth combines a robust local job market and economy and a comparatively low cost of living compared to other metropolitan areas. While many regions throughout the country have strong economies, fewer and fewer have a low cost of living; studying how Houston’s city policies impact the housing market should help emulate their success in combining the two.

One policy that Houston lacks, but most large cities have, is land use zoning. This means no zones exist in Houston, so industrial, residential, and commercial patterns can emerge naturally, as can mixed-use regions of the city. Houston still has parking minimums, land use regulations, and setbacks that apply citywide, but otherwise, the city relies on private agreements and other systems to regulate property use. Some complain poor planning due to market-led development has led to more cars and too much parking in downtown Houston. However, this could be blamed on the city’s overly strict parking requirements rather than its lack of zoning. Additionally, providing more public transportation options or further allowing parking garages and other denser parking options would help solve this problem.

Austin is also a very pro-market and pro-development city, and it has used this to combat rapid population growth. Austin is currently the fastest-growing city in the United States, but in the early 2020s, their rent prices ballooned rapidly. Austin, instead of mandating rent control or inclusionary zoning, responded by encouraging the building of the most apartments of any city in the country, nearly twice as fast as the national average. This change has been largely successful, as Austin’s rents have declined by 7% in the past year against a widespread national average of rapid rent increases. That said, Austin is still near the top of an over decade-long housing price increase and is still pursuing even stronger pro-market policies to help further combat this.

Minneapolis, MN

Minneapolis has more mixed results and policies than the above examples, but it still engages in more widespread local regulatory reform than many Maine cities. Minneapolis has not seen widespread rent decline recently, but their rent has primarily remained stable while other comparable midwestern cities have seen significant increases. Between 2017 and 2022, Minneapolis’s housing stock went up by 12%, and its rent grew by only 1%, while the rest of Minnesota experienced an average of 4% housing stock growth and 14% rent increase. As established throughout this report, the best way to combat rising prices and inaccessible housing is to increase housing supply, and these results clearly show that Minneapolis’ tripling the state’s housing growth rate is directly correlated with avoiding the state’s rising cost of housing.

Minneapolis encouraged this increase in housing production by reforming preexisting strict land use regulations. The best examples are removing minimum parking requirements, allowing accessory dwelling units, and lowering minimum lot sizes throughout residential zones. Additionally, the city weakened height restrictions along transit corridors. It also permitted duplexes and triplexes on any residential lot in the town, thus allowing a more significant number of multi-unit properties to be developed in historically low-density neighborhoods.

By reducing the regulatory burden on its housing market, Minneapolis was able to largely avoid the significant wave of increased housing costs that hit the rest of Minnesota and much of the United States. This is a classic example of supply increasing to meet demand and deregulation being an avenue to encourage this economic shift. While Minneapolis served as a great example of housing deregulation for a temporary period, it sadly also serves as an example of the effects that reinstituting stricter land use regulations can have.

Over 2023, a significant chill in development occurred in Minneapolis, partially due to the passage of a rent stabilization ordinance that spooked apartment building developers. Additionally, environmental groups have now issued a successful state lawsuit against Minneapolis’s ambitious 2040 plan, meaning that a large amount of the regulatory reforms in the plan are now canceled, and developers are thus abandoning plans to invest in the city’s housing market.

Because so many housing developers treat their developments as long-term investments, creating beneficial policies and a stable, soft-regulation environment would encourage housing growth far more effectively than a volatile housing policy. Rent stabilization is undoubtedly a policy that reduces the long-term profitability of any housing development. Still, the injunction against the 2040 plan also caused developers’ prospects in the Minneapolis market to disappear. This helps illustrate why long-term deregulatory policy is a better avenue for housing growth than back-and-forth, strict housing regulation.

Salt Lake City, UT

Between 1985 and 2021, home prices in Utah surged by 90% while average income increased by only 20%. A recent legislative audit shows that Utah will need to construct 28,000 homes a year to keep up with population growth, let alone improve housing affordability. No place in Utah has this shortage been more acute than Salt Lake City.

In response to this growing problem, Salt Lake City recently adopted an incentive approach to encourage developers to build more affordable housing. The city has varying definitions of affordable housing ranging from 30-100% of the area median income and household sizes of 1-8 people.

Under the new law, zoning regulations have been relaxed, specifically in the case of affordable housing. On a macro level, developers can be qualified to receive incentives such as reduced parking requirements, streamlined planning and approval process, and extra permissible stories, which serve as exceptions to height restrictions.

Additional benefits exist within specific zoning areas. Under single-family and two-family zoning districts, developers building affordable housing can build multi-family homes, triplexes and fourplexes, sideways and rowhomes, and cottage developments. In single-family districts, developments can be allowed to construct two-family homes in areas where they are not currently permitted. 

In multi-family districts, builders can construct additional stories (~12 ft per story), and density requirements will be removed. The approved rule changes will also permit more types of housing in commercial areas. 

Ultimately, these regulatory reforms represent a step in the right direction. However, there is little reason to limit this deregulation to affordable housing. Salt Lake City correctly assumes that deregulation will build more housing. Maine cities should adopt this approach and extend it to its logical conclusion. By implementing zoning reform that affects all developers, Maine can increase its supply of housing to combat its critical shortage. 

Local Pro-Housing Policies

As we have seen, many cities nationwide are experimenting with reforming their housing regulations. While some cities are helpful examples, every case is context-dependent. Therefore, it is necessary to examine the local land use policies that would positively impact the housing market and how Maine cities can implement them effectively.

Reduce Zoning Regulations

In Houston and several other cities, removing or weakening zoning regulations was shown to encourage an expansion of housing stock and a reduction in housing prices. Not only do strict government-mandated zoning regulations decrease the efficiency of town layouts, but they also stop mixed-use development, which allows for more walkable and easily navigable cities. While reducing the burden on the housing market should be local regulators’ top priority, it should be noted for those with environmental concerns that more walkable cities resulting from flexible mixed-use zoning will likely reduce commute-related emissions in the long term, as will increase the number of people able to live near their place of work.

Empowering local landowners to restrict uses through private agreements is a far more efficient way to prevent noise pollution or other incompatible uses than cumbersome government mandates. This is especially true when variances in government-mandated land use restrictions require permission from local appeal boards. This makes regulatory outcomes unreliable and requires extra action by developers, further chilling local investment. No investor in housing prefers a risky investment to an otherwise identical, reliable one.

More flexible multi-use-based zoning makes cities more walkable, affordable, and accessible. This is why so many student housing designers, in particular, often use a building model with first-level stores and offices and then around three levels of apartments above. Because college students are less likely to express NIMBY-style opposition to local housing growth and improvement, these far more efficient forms of housing are evidence of what should be pursued in a more widespread capacity in Maine. 

Eliminate Rent Control, Short-term Rental Restrictions, and Inclusionary Zoning

While most of these categories involve specific policies, this recommendation instead calls for the elimination of certain regulations. One commonality that rent control, short-term rent restrictions, and inclusionary zoning all share is that they inherently assume that the market is at fault for rising rents throughout the country. This assumption is incorrect, as it is truly regulation that is burdening the housing market.

Each of these policies further limits the rental market, restricting supply by mandating lower rents. Still, all these policies do is increase the cost of creating new housing, which discourages potential developers from investing in new development. If housing availability and affordability are problematic, the government should encourage housing creation rather than discourage it via rent restrictions.

Rent control, in particular, has been shown to cause renters to behave like homeowners, causing them to develop similar NIMBY-style opposition to local development. This is mainly due to the vesting of continuous profit the renters of rent-control apartments receive compared to an identical apartment rented at market rate. A typical renter’s rent goes down when competition enters the market. A rent-controlled apartment does not. Because quantity inversely affects price, most renters should be encouraged to support new local housing development. 

Absent rent control, renters have a significant incentive to encourage local housing growth, which is likely to reduce or stabilize the rent cost. However, rent control avoids this, so it removes substantial YIMBY incentives among renters.

Inclusive zoning will logically create the same effects, potentially leading to a vicious anti-development cycle where even renters support NIMBYism. Inclusive zoning is comparable to rent control in its impact on the behavior of renters and landlords. While most renters still living in market-rate apartments will want to reduce the cost of rent, affordable housing renters supported by an inclusive zoning program will have the opposite incentive. The best way to avoid this is to keep the market incentives applying to renters by avoiding rent control and inclusive zoning policies. Otherwise, the political and economic damage might become irreversible due to the feedback loop this may cause on local politics and, thus, policy. 

Improve Transparency and Simplicity of Local Regulations

One of the simplest things pro-growth cities can do to attract developers is to make it easy for them to navigate and understand the local regulatory scheme. This applies to Maine-located YIMBY cities like Auburn and cities outside Maine, such as Houston. Houston’s local code is likely attractive to developers because it lacks the complex additional dimension of zoning policies, which means that developing in one part of the city is essentially the same as developing anywhere else within city limits. 

However, municipalities don’t have to remove all zones in their city to increase their regulatory transparency. A way to increase accessibility is simply reforming land use codes and improving online databases. Portland’s shortening of its code will undoubtedly reduce the difficulty of its navigation, though its various concurrent anti-market policies will likely undermine its benefits. Auburn’s easy-to-navigate code and zoning map similarly avoid massive policy revamps while increasing the general public’s ease of navigating their local land use rules.

Repeal Green New Deal and Other Energy Efficiency Construction Requirements

Green energy mandates for building methods and materials may sound like they reduce homeowners’ costs, but instead, they make costs more frontloaded. By frontloading expenses, these policies make housing less affordable and thus further discourage the building of housing that middle and lower-income earners can afford. Since Portland passed its Green New Deal, residential construction permits went down 82%. While some of this may have been from the jump of construction applications immediately before the deadline to be grandfathered for exception to the new policy, 82% is a massive collapse, and it seems that many NIMBY groups are aware of these effects.

Portland’s Green New Deal included energy efficiency mandates and inclusionary zoning expansion, likely because its supporters were aware of the chilling effect both policies would have on housing development. The fact that these two policies were married together in one proposal should not be ignored because they were likely both proposed with the same intention: reducing housing growth. 

Suppose one aims to promote a local housing policy that reduces emissions. In that case, one should instead support weakening density regulations and height restrictions, both local policies that force greater travel emissions and less efficient city layouts. This will do far more to reduce emissions than policies like the Green New Deal, which will instead force outward sprawl and reduce housing availability. 

Instead, Portland instituted a policy that would reduce density and thus walkability and frontloaded more costs for developers and buyers of homes. It may not be immediately apparent why frontloading costs are worse for lower-income buyers, but comparing this to other purchases highlights the actual effect. While paying for a car upfront is technically cheaper than a payment plan, only higher-income buyers can afford that option. A 15-year mortgage saves thousands of dollars versus a 30-year mortgage, but working-class homeowners often can’t afford the increased payments. 

While increased energy utility costs over time increase the total cost of owning a home, the cost is like a payment plan or a mortgage: it is paid over an extended period. Meanwhile, the upfront cost of more expensive building materials and processes is borne immediately by the developer and buyer in the form of inflated home prices. Mortgages increase these costs over an extended period, impacting a home’s price in the long run. The higher a home’s price is, the less likely someone will be able to afford the monthly mortgage payments. Again and again, the frontloaded cost of energy-saving housing mandates makes it harder for lower-income earners to afford a home.

State Pro-Housing Policies

Many state-level policies encourage housing affordability and availability. The general theme of pro-housing policies is that they create incentives for the market to invest in housing rather than reducing those incentives, like inclusive zoning and rent control do. One way to create these incentives is to reduce the frontloaded cost of building housing, and another way to do this is to increase the reliability or amount of return on investment.

It should be noted that Maine Policy’s stance is that housing policy is best handled locally due to the fluctuations and differences between different housing markets and the ability of local governments to better respond to local problems. State and especially national housing policy can frequently result in a widespread cookie-cutter result. Failing to adapt to local markets and issues can fail to assist localities with the greatest needs for housing reform. 

That being said, local governments legally exist as extensions of the states, which means they must operate in the markets and systems the states establish. Thus, states can still design regulatory systems to encourage better development of the healthy housing market and support local governments attempting to do the same. LD 2003, a bill passed in 2022, clearly had this goal in mind. Whether or not it adequately does so, it is encouraging that Maine is already attempting to lift regulatory barriers from the housing market.

When a state-level mandate like this attempts to force municipalities to participate rather than incentivize participation, local governments will inevitably try to circumvent state law. Revenue sharing, for instance, is a policy tool that Maine has used in the past but has not employed in housing policy reform.

Exempting Construction Materials from the Sales Tax

Removing frontloaded costs is the easiest way to react at the state level. While Maine does not tax labor related to construction, about half of the cost of housing construction is typically materials, which are covered by state sales tax. Maine’s sales tax is above 5%, and this includes construction materials. Therefore, whenever new housing construction is built, a 5.5% tax is levied on half of the overall costs, making the effective tax on housing construction over 2.5%. This may seem like a small number, but not so when one is talking about housing that costs hundreds of thousands of dollars to build. 

Stricter building standards also add to these upfront costs, but the easiest way to reduce this barrier is to exempt construction materials from the state sales tax. While opponents of this proposal might argue that the state would lose revenue, a better way to think of this policy is as an investment of that revenue back into the housing market. 

Maine is clearly willing to spend money to support affordable housing solutions, so simply not taking that money in the first place would not only be more effective but also allow the market to invest in providing housing throughout the state. Maine already exempts limited kinds of low-income housing from the state sales tax, along with a long list of other categories. It seems logical that if exempting groceries will increase their accessibility to Mainers of all income levels, the same will apply to housing.

By-Right Development

It can be challenging for states to directly create more substantial long-term incentives for housing investment, as those incentives are often tied to multiple changing variables and even the long-term attractiveness of living in the state. However, it is likely that disincentivizing anti-market local policies in some way, such as revenue sharing, would discourage municipalities from employing these types of policies in the future. It is clear that in recent years, people have wanted to move to Maine, and many have, but enormous upfront costs and local policies have likely been the most significant barriers to market supply shifts.

Maine should embrace a by-right development approach to incentivize and expedite housing construction. Most states exist on a spectrum between by-right development and discretionary development. Maine heavily leans towards the latter category. In practice, this means that housing projects are not only subject to existing regulations, but their approval is subject to local discretion. Thus, localities can add additional burdens onto developers specific to individual projects. 

Not only does this delay the construction of new housing, but it also disincentivizes developers from building in areas that engage in these restrictions. At best, this creates delays, and at worst, discretionary approval creates fundamental uncertainty over whether a project will receive approval even if it meets all standard regulatory requirements. 

By contrast, by-right development allows for more stability in the construction process. The approval of new housing projects becomes a simple administrative procedure rather than a bureaucratic normative debate. In 2019, Oregon, facing a housing shortage, passed legislation allowing for developers to build fourplexes via by-right development. Beyond implementing by-right development across the board, there is also a case to be made that discretionary development could still be necessary on large-scale projects, but at the very least, reducing the practice should be a priority for Maine and other states. Ultimately, by eliminating or reducing discretionary approval, Maine can expedite, expand, and stabilize the process of constructing new housing.  

Third-Party Permitting

Some states are experimenting with a “third-party permitting” policy to encourage new housing development. This process operates quite differently from traditional land development and aims to increase permitting efficiency. Many supporting this reform make an incentive-based argument similar to those supporting school choice. When you create a competitive system with customers, you encourage the process to increase in efficiency over time, as opposed to government bureaucracy, which has no such incentive.

Third-party permitting as a policy is specifically referring to building permits. Typically, the local building authority, a subsidiary of the town or city, reviews and approves permit applications to develop housing or other buildings. This creates a government bureaucracy at the local level, which, as discussed above, has little incentive to optimize their permitting process. Third-party permitting, however, has the local government stepping back and allowing private parties to license developers.

However, this would not mean a laissez-faire, unregulated mess of unchecked third-party permitters. Instead, this process would involve the local government licensing and approving third-party permitters to do business, allowing them to operate in the town somewhat independently but still with government oversight. Since multiple third-party permitters will be in the same place, the ones that are more efficient and faster in their permitting process will have more business. Meanwhile, local governments will still regulate them to ensure permitters don’t drop below safe and reasonable standards.

Other benefits include specialization, flexibility, reduced government burden, transparency, and innovation. Different permitters could specialize in specific project types and even advise developers. Privatizing most permitting would reduce local spending, allowing local resources to flow toward other priorities or decrease local tax burdens. This would also enable double transparency to the government and private stakeholders, ensuring unfair permitting behavior has more vigorous checks.

While third-party permitting might seem like a niche issue, it is essential to remember that housing developers must approve their permits before building. Thus, permitting policy reform is one of the most effective ways to improve the housing market in Maine. This could be done at the state or local level, either through local authorities stepping back and providing support and structure for local private permitters or the state government providing a loose framework for local governments to implement themselves by opting into it.

In 2023, Texas and New Jersey passed legislation ensuring that builders facing slow review processes can go to third-party reviewers to expedite the process. Other cities have allowed developers to hire third parties (private companies or other cities) to ease their workload. Allowing private companies to reduce the permitting workload at the builders’ expense is a common-sense measure that would expedite housing construction. Some of these bills are more limited than blanket allowances of third-party permitting, specifically allowing the process as an alternative in emergencies or at other times when housing demand is high. 

Housing or Land Use Appeals Board

In addition to burdensome delays, the appeals process can significantly disrupt construction. Creating a statewide board specifically to address housing concerns would ensure that appealed cases can be swiftly resolved and either approved or rejected. This policy was adopted by New Hampshire in 2023, and all pending cases filed after January 1st, 2024, were referred to a three-person board. 

If adopted in Maine, a land use appeals board would allow appeals to be expedited, creating more certainty and efficiency for developers and improving the rate of housing construction. While this might at first be seen as taking power from local governments, this would simply create a more streamlined and efficient appeals process compared to the current one. Currently, when a planning board denies subdivisions or site plans, employs divisive land use controls, or denies variances, the only effective avenues in Maine are to appeal to a local appeals board or a Maine state court.

The first of these options is flawed because the appeals board is established by the same locality as the planning board, and for smaller towns, this option may not even exist. The second option is not great either, as courts are often ill-equipped to delve into the complex world of land use regulation. Even if they are, court costs to appeal a land use decision become a significant barrier to changing local land use policy, a fact of which local planning boards are no doubt aware. Court cases are well known for taking long periods of time as well, and providing a way to avoid this excessive time and money-consuming avenue would certainly improve Maine’s land use regulations.

This policy proposal creates a state-level planning board specializing in zoning, land use, and housing appeals. This will increase the accountability of local regulators, reduce the individual and state cost of land use trials, and make the process faster and more efficient. Thus, the only power this would extend to the state government would be the power to review local actions more efficiently, making this both a pro-market and pro-efficiency policy.

Specific and Objective Zoning Criteria 

Across the United States, many housing regulatory criteria are subject to discretionary approval from councils or administrative staff. As a result, there is ambiguity regarding what exact projects can qualify, and this uncertainty intuitively hurts housing construction. Furthermore, local discretionary approval beyond legally outlined criteria has allowed NIMBY movements to derail local housing construction, contributing to the nationwide housing shortage. One of the possible solutions to this problem is requiring “specific and objective” zoning criteria to obtain permits. If enacted, “specific and objective” criteria will involve less administrative discretion and expedite approval. The presence of “specific and objective” criteria would also make the appeals process smoother, as interpretative differences will matter less.

In 2023, Rhode Island passed several laws requiring “specific and objective” criteria for a variety of zoning permits. Additionally, the laws streamlined the approval process, turning it into a two-step rather than a three-step process. Furthermore, the reforms clarified and provided more detail on the criteria for approving and rejecting local projects. Similarly, Washington state cracked down on aesthetic standards and mandated “clear and objective” standards for exterior design, among other reforms designed to boost the rate of housing construction.

If Maine municipalities embrace this approach, obtaining approval for construction will be expedited and less costly. The process would become more transparent, approval would become more predictable, and developers would be more incentivized to engage in housing projects. Establishing this “clear and objective” standard is not necessarily a call for deregulation or otherwise disregarding restrictions municipalities believe are essential. However, it is a call for transparency. As much as possible, regulations should be drafted to make it apparent to those who need to follow the rules and what can be approved. Ultimately, by embracing this regulatory approach, Maine would promote transparency, expedite the zoning approval process, reduce costs, and increase housing construction. 

Expanding Access to Accessory Dwelling Units

Accessory dwelling units (ADUs) are secondary houses or apartment buildings that share the same lot as a larger primary home. As the housing crisis continues to worsen, increasing the construction of ADUs represents a low-cost, mutually beneficial opportunity for both homeowners and renters. 

In 2016, California passed legislation to “give property owners the ability to add ADUs to their property as a matter of right, removing all zoning barriers for conversions of existing spaces (obstacles included requirements on parking, lot size, open space, and density) and moving these units straight to building permit with a short local approval deadline.” The law went into effect in 2017.

As seen in the graph above, implementing these deregulatory measures coincided with a dramatic increase in the number of permits for ADUs. Notably, the number of ADU permits in 2022 exceeded the combined annual total of single-family attached homes, two-to-four-unit multifamily buildings, and manufactured housing permits. For further context, ADUs are usually constructed by single owners with minimum home-building experience instead of the professional owners and developers traditionally associated with other housing categories. 

ADUs have been particularly impactful for low-income residents. In 2018, ADUs comprised 14% of all low-income housing in California. By 2022, this number rose to 28%. This speaks to the utility of ADUs and the broader housing crisis facing California and other states. 

As of the enactment of LD 2003, Maine has given its residents significant liberty to construct ADUs on the lots of many single-family homes. However, localities can go further. LD 2003 does not require localities to protect the rights of multi-family residents to build ADUs (neither does it restrict it). Localities should take measures to expedite ADU permitting approval and allow homeowners of all stripes to partake in ADU construction on their own property. 

Increasing Access to Manufactured Homes 

In recent years, the number of Americans purchasing manufactured homes has increased. Manufactured homes are defined by Maine statute as “a structural unit or units designed for occupancy and constructed in a manufacturing facility and transported, by the use of its chassis or an independent chassis, to a building site.” This growing popularity can be attributed to their far cheaper price when compared to standard homes. In 2021, the average per square foot of a manufactured home was $72 compared to $144 for on-site homes. 

Although there are some downsides to manufactured homes, such as asset depreciation, shorter lifespan, and a more complicated financial process, Maine would substantially benefit from ensuring its residents can purchase manufactured homes if they choose. From a regulatory perspective, statewide legislation was passed in March of 2024 stating that manufactured homes would be treated the same as single-family homes. This is a vital step in the right direction, but municipalities could go further by creating environments allowing this cheaper option to be fostered. 

Municipalities can either permit or disallow manufactured home parks through their zoning laws. These parks consist of moderately dense communities of manufactured homes that provide cheap housing in a small space. Ultimately, municipalities, particularly those facing acute shortages, can incorporate this type of housing to provide affordable, quality housing to their residents.