New Maine housing law shakes up zoning: Here's how towns are adapting

Communities around the state are working to comply with Maine’s landmark housing law after a July 1 deadline to meet the requirements.

The law, which essentially bans single-family zoning statewide and requires communities to allow for greater density in certain areas, was signed by Gov. Janet Mills in 2022 to address an increasingly dire housing crisis.

Implementation was delayed after pushback from opponents worried about its effects on a range of issues, from parking and traffic to water and sanitation. Even those in support often said more time was needed to comply.

Smaller municipalities — those with a town meeting style of government — had until July 1 to bring their ordinances up to date, while larger cities and towns with a council-style government were required to conform by the first of this year.

It’s difficult to track which communities have updated their ordinances because municipalities are not required to report unless they have taken state funding to help with compliance.

Victoria Foley, director of legislative affairs and communications for the Department of Economic Community and Development, which oversees the implementation, said more than 80 towns asked for funding and would be required to report ordinance progress.

Foley said neither DECD nor any other state agency has enforcement capability under the new law, but its provisions do override local ordinances.

“Therefore, any ordinance or regulation that is not consistent with the law may be challenged as invalid,” said Foley.

Coastal towns debate short-term rentals, parking

The new law, often referred to by its legislative bill title, LD 2003, requires municipalities to allow an accessory dwelling on any lot with an existing single-family home, and two to four units on any lot with an existing single-family home in certain areas.

The changes also enable developers to build 2.5 times the number of units previously allowed, provided 51 percent of the units are affordable housing — meaning a developer who could previously build six units under local rules would be eligible to build 15 units on the same site if affordability rules were met.

Towns and cities have some latitude. They can establish minimum lot size requirements for new dwellings. They can decide the maximum size of an accessory dwelling but must allow the state-mandated minimum size of 190 square feet.

Overall, municipal requirements may be more permissive but not more restrictive.

While updating their regulations, many communities banned ADUs from being used as short-term rentals, which exploded in Maine in recent years .

Lee Feldman, deputy director of community development in Kennebunk, said the town already allowed ADUs but increased the maximum square footage from 600 to 1,000 square feet. The town also said the new ADUs could not be used as short-term rentals.

“We do see ADUs coming in now for permitting,” Feldman said, “but nothing out of the ordinary. They’re not lined up out the door wanting their permits. But we have one or two affordable housing projects pending since the changes were made.”

In neighboring Kennebunkport, Galen Weibley, director of planning and development, said proposed changes were approved at a June town meeting of the July 1 deadline.

Kennebunkport addressed ADUs in October with clarifying language and added the required affordable housing density bonus. Additional dwellings on lots in growth areas already were allowed. The town restricted ADUs to a maximum of 800 square feet and stipulated they could not be used as short-term rentals.

“This has been an ongoing issue in Kennebunkport since before the pandemic,” Weibley said. ”As of November 2008, we have had a short-term rental license in place to not create any more vacation rentals.”

Despite the changes, said Weibley, affordable housing is a remote possibility in coastal Kennebunkport, where the median list price of homes is routinely more than $1.5 million . “The cost of land is a huge barrier in coastal Maine.”

A 2023 study estimated that Maine will require 38,500 to 46,000 additional housing units by 2030, depending on population growth.

Another LD 2003 stipulation is municipalities cannot use parking requirements as a way to block new housing. New ADUs do not require additional parking, and for affordable housing, two parking spaces for every three units are considered adequate.

Tim Fleury, the executive assistant in Old Orchard Beach, said the response to the law has been a “mixed bag,” but the town did finish its compliance work by Feb. 6, after the Jan. 1 deadline.

“It was 50-50,” he said. “People could see the need for increased housing, not just in Old Orchard Beach but across the state. But other folks had concerns about ADUs and additional housing units being used for short-term rentals.”

The town ultimately banned ADUs from being used as short-term rentals.

“The only other concern was affordable housing. They wanted to make sure any affordable housing stayed affordable and wouldn’t be flipped after the first owner,” he said.

The law addresses that by requiring the property to be “affordable” for a minimum of 30 years.

An affordable rental is considered one in which a household with an income of no more than 80 percent of the area median income (defined by the federal government) spends less than 30 percent of their income on rent and certain housing expenses.

An affordable home is considered one in which a family making no more than 120 percent of the area median income spends less than 30 percent of their income on a mortgage and certain other housing expenses.

In Old Orchard Beach, that would mean a family of four making less than $97,800 would be eligible to live in an affordable rental unit, with rent no more than $2,445 per month. For the same family to qualify to buy an affordable home in Old Orchard Beach, the income limit would rise to $153,000, with a mortgage of no more than $3,825 per month.

Old Orchard Beach residents, who already contend with the summer parking crunch familiar to tourist towns around the state, were also concerned about the prohibition on requiring another parking space for an ADU.

“Parking is at a premium already,” said Fleury. “This is a tiny, seaside community with narrow, old roads. One thing we did is if you are converting an attached garage into an ADU, you cannot eliminate the off-street parking space that went with it.”

Paul Schumacher, executive director at the Southern Maine Planning and Development Commission, which works with 39 southern Maine municipalities, said most of their cities and towns have done their compliance work or are underway.

“We found most of the towns we have worked with either adopted and made changes over the winter or are in the process. The year-long extension really helped,” said Schumacher, referring to a decision last year to delay implementation of the law.

Schumacher said many towns were satisfied with meeting the minimum standards set by LD 2003. Some are also looking at other avenues to housing affordability. A few took the opportunity to restrict short-term rentals.

“The next phase of the work on housing might be to dive in a little more in-depth to see if there are some other things we can do,” Schumacher said. “Just getting this done was a pretty big lift.”

He said the housing crunch is undeniable, and not just in pricier, coastal areas.

“Our office is in Saco. We have a lot of younger staff here in their late 20s who are all trying to find housing,” he said. “It’s a challenge for them.”

Up the coast in Lincoln County, Emily Rabe, executive director of the Lincoln County Regional Planning Commission, has 19 mostly rural towns under her purview. She said the attitude has been mostly positive and most communities were in line to comply with the law by the July 1 deadline or soon thereafter.

Many of the towns she works with banned ADUs from being used as short-term rentals but allowed longer monthly stays.

“They recognize that there has always been a rental market for monthly rentals so they didn’t want to impact an industry that has always been there,” she said. “It’s complaint-based enforcement. They don’t have the capacity to enforce but it gives the restriction teeth.”

Pushback 'diluted' by statewide mandate

Eric Cousens, director of planning, permitting, and code enforcement in Auburn, said the city already had been making a push to create more housing. Several ADUs are in the planning stages or under construction, along with nearly 400 new market-rate apartments.

“We had already switched to a regulation code that allowed for higher density housing throughout a majority of the area served by public sewer,” said Cousens, but “went a step further than LD 2003 with ADUs, not only allowing ADUs but allowing two units wherever there is already a house.”

Auburn also allowed an additional house on a property to be larger than the existing dwelling, rather than requiring it to be smaller, as in many towns.

“So you could buy a starter home and then build a forever home on the property,” said Cousens. “That allows people to stay in the same neighborhood and town.”

Cousens said the response to changes promoting more housing had been “mixed,” but the statewide nature of the law simplified the process. “Some people didn’t want to see multi-family housing. It’s easier with a state mandate.”

Cousens said 9 percent of Auburn’s housing is affordable in some way, limited to certain incomes or restrictions on rent. The remaining compliance work, Cousens said, is focused on more rural areas of Auburn, where adding up to four units could be possible.

Some homeowners are reluctant to see that change.

“People don’t want to lose that rural character.”

Ethan Croce, community development director in Falmouth, said the city complied in mid-December 2023, making a number of changes to comply.

For example, Falmouth already allowed ADUs, but the law prohibits municipalities from regulating the number under their growth cap. “We allowed no more than 20 a year in growth areas, and eight in non-growth areas,” he said. “As a practical matter, Falmouth only hit the growth cap once.”

Croce said local pushback was diluted by the fact the law was a state mandate. “If these changes were not mandated, there would have been more resistance,” he said.

In the Canadian border town of Houlton, the code enforcement officer, Benjamin Torres, said the primary change was to incorporate a definition of ADUs.

“Of every building permit that has come across my desk, there is exactly one case where they couldn’t have a second home. Under the new law, they  are entitled to a second dwelling on the property.”

In that instance, he said, there was a home in an area later designated industrial, which would not allow construction of a second home. Now the owner can do so.

ADUs, he said, will be limited to 75 percent of the square footage of the existing dwelling on the lot.

Wyatt Philbrook, the Rockland code enforcement officer, said the city, which finished its compliance work last winter, went beyond what was required.

“Rockland in the process did some things to reduce some local barriers that would have made it harder to reap the intended benefits,” said Philbrook, who called LD 2003 “a good document.”

The city is making good strides in terms of density limitations, said Philbrook, allowing more dwellings and reducing setbacks “so not only could you have more dwellings, but we would help you find the space to do it.”

In many areas, the city cut required setbacks in half or more. Depending on the zone, a 24-foot setback may now be 10 feet. In terms of road frontage requirements, the maximum now needed is 50 feet.

“That’s going to allow property owners to possibly create a whole new parcel,” Philbrook said. He said a local resident who can’t afford to build another dwelling could then sell that new lot and enjoy the financial benefit.

ADUs already were allowed with single-family homes and did not require a minimum lot size. The city has since extended the ADU permits to properties with duplexes.

The city already had restrictions on short-term rentals, which are allowed on a tiered basis, depending in part on whether the property is occupied by a homeowner, with caps on the number of permits issued to non-homeowner-occupied short-term rentals.

The need for housing, Philbrook said, is undeniable.

“We have a lack of quantity and we are working all the time to make existing buildings better,” he said. “It’s very hard for anyone coming in from the outside without family or connections to find something they can afford.”

This article originally appeared on Portsmouth Herald: New Maine housing law shakes up zoning: Here's how towns are adapting