Rents in Bangor are rising faster than anywhere else in the state

Rental housing costs in Bangor are rising faster than they are in Portland.

HR&A Advisors, a national real estate advisory firm, discovered this and more when evaluating the city’s housing market. Those preliminary findings were presented to the Bangor planning board in July.

To help solve Bangor’s housing issues, including a lack of availability and skyrocketing rent and purchase costs , city leaders are paying HR&A $75,000 to conduct the study. The firm will eventually recommend ways the city can help more people access safe and affordable housing, hopefully soothing an issue both the city and state have grappled with for years.

Phillip Kash, a partner of HR&A, presented some of the firm’s early findings to the Bangor planning board in July. The data show a lack of available homes, high rent and purchase costs and older housing stock are the major barriers people face to getting a roof over their heads.

This is what it found.

Bangor is ‘housing cost burdened’

Bangor needs 1,900 more rental homes for people who make below $35,000 annually, according to Kash.

While Bangor saw a net population loss of about 1,300 people between 2012 and 2022, most of whom were younger than 24, Kash said the city is still seeing a shortage of housing because what is available is unaffordable.

Furthermore, more than half of Bangor’s renters make below 80 percent of Area Median Income, and most of them are considered “housing cost burdened,” meaning their rent takes up more than 30 percent of their income.

Area Median Income is determined by the Department of Housing and Urban Development each year. In 2023, 80 percent of Area Median Income in Bangor was $48,250.

Rent costs are rising

While Bangor doesn’t have the highest rental costs in the state, Kash said the city’s rent prices have been accelerating faster than those in Portland, Lewiston, Augusta and Brewer since the pandemic.

“Renters in your community are facing a tough market and it’s not getting easier for them any time soon,” Kash said.

Buying is just as hard

For those looking to buy their own home rather than rent, Kash said they face median housing values that have skyrocketed from $155,000 in 2020 to $190,000 in 2022.

Bangor also has very few young homeowners, as 77 percent of the people who own a home in Bangor are older than 45, HR&A found.

“Looking at this, it’s pretty clear that accessing homeownership in your market is difficult and younger households are really struggling to access homeownership,” Kash said.

Bangor’s houses are aging

Lastly, Kash said most of Bangor’s housing stock is more than 50 years old and may require upgrades or repairs, which puts an additional cost burden on residents.

The largest demographic of homes in Bangor, from apartments to single-family houses, was those built before the 1940s.

It’s tough to build here

On the city’s side, Anne Krieg, Bangor’s community and economic development director, said enticing developers to build more housing in the city seems like an easy fix. However, she has found that interested developers back out of their plans when they determine the cost of labor and materials will be too high.

When a developer’s plans make it to the city’s planning board to get approved, planning board member Edwin Brush said the board often gets pushback from residents who fear additional housing would increase traffic or change the style of housing in a neighborhood.

Reese Perkins, Bangor’s planning board chair, said the information he hopes HR&A will provide the city will help them make decisions that will noticeably and quickly improve the local housing market.

“We understand that lack of housing plays a part in that as well as high real estate and rental values but there also seems to be a lack of quick fixes,” Perkins said. “And I think most folks love Bangor as it is but worry that in fixing the housing problems we may destroy the city we love.”