2015-08-21 / Front Page

Cape lifts ‘affordable housing’ limit

By Duke Harrington
Staff Writer

CAPE ELIZABETH — With no one apparently willing to buy a pair of Cape Elizabeth condominiums listed at an “affordable housing” rate, the town council also has passed on the purchase.

According to the affordable housing provision of Cape’s zoning ordinance, adopted in 1992, developers of major subdivisions must make at least 5 percent of their units affordable to buyers earning 50 to 80 percent of the median income for the Portland metro area. Alternately, the developer can market 10 percent of the units to buyers who earn 80 to 150 percent of that same median income.

Currently, the ordinance formula caps low-income homes in Cape Elizabeth at $210,678, with moderate-income homes limited to a selling price of $395,022.

The ordinance also says that if a developer fails to sell homes or units at that price after six months of documented “good-faith” marketing, he or she must offer the unsold units to the town at the affordable price. However, the town can waive its right to purchase the homes, after which it would try to sell them on its own, and instead let the developer pursue market pricing. In that case, any difference between the “affordable” price and the final sale price realized would go to the town, to be placed into a reserve account to fund future affordable housing projects in town.

On July 28, Joel FitzPatrick, president of FitzPatrick Associates and owner of 46-unit Eastman Meadows condominium project, produced an affidavit stating that, after a year of trying, he had only sold two of the six condos he was required to offer at affordable rates.

At its Aug. 10 meeting, the town council waived its right to buy the unsold units, instead allowing FitzPatrick to sell two of the units at market rates.

According to Town Manager Michael McGovern, the vote marks the first implementation of the zoning clause governing unsold units in the affordable housing ordinance.

“Like anything, it’s worked reasonably well, but there have also been some problems,” he said of the 23-year-old regulation.

“The affordable housing provisions Cape Elizabeth has are the envy of many other communities, so you should be proud of your ordinance,” Town Planner Maureen O’Meara told the council, adding, “but it might need a little tune-up.”

Part of the issue, she said, is the moderate and low-income qualifications, set using regional income data provided by the Maine Housing Authority. Many at the Aug. 10 meeting marveled at the near- $400,000 price tag deemed “affordable” by the ordinance for a family having a “moderate income.”

“That seems very high to me,” said Councilor Molly MacAuslan.

“I just can’t believe that,” McGovern said, “and that might be one of the problems. If people are going to spend that kind of money, they don’t want any strings attached.”

Unlike some towns whose affordable housing rules only take into account the median income of its own residents, Cape looked to the greater Portland area due to its reputation for having the highest median household income of any municipality in Maine.

“In 1992, we had just done a study which showed we had an affordable housing problem and to tie income (standards) to Cape Elizabeth didn’t really get at the problem,” O’Meara said.

It may be time, she added, for Cape to reassess the income definitions in the ordinance, possibly reducing the “moderate income” cap from 150 percent of the regional median income, down to 120 percent, or lower.

“Right now the moderate income is really bumping up against the market rate, which isn’t really dealing with the original intent of the ordinance,” she said.

The council voted unanimously to waive its purchase option on the two Eastman Meadows condos, but has no immediate plans about what to do with any income that might be derived from their eventual sale at market rates.

“We don’t have any specific proposed use for those monies,” McGovern said, “but it could be (up to) $50,000 each that would go into that fund, based on the selling price of other units.”

According to McGovern, there are currently nine low-income and nine moderate-income homes in Cape Elizabeth, including the two units that remain at Eastman Meadows. One has resold since its purchase by the original owner and, while FiztPatrick was unable to move his offerings, one of the resales went after a single day on the market, “with multiple buyers,” McGovern said.

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