2016-06-17 / Front Page

Cape can’t move ‘affordable’ units

By Wm. Duke Harrington
Staff Writer

CAPE ELIZABETH – The town council wants to reserve condo units for sale to low-income residents; it just doesn’t want to be the party in charge of selling those homes.

On Monday, for the second time in as many years, the town council passed on its right to purchase unsold units in the Eastman Meadows condominium complex – which had been reserved for sale at $395,022 – and will instead let the developer move those units for whatever he can get on the open market.

As part of the agreement, the town will get to pocket the difference between the eventual sale price and the “affordable-housing” tag, and that money will help promote other low-cost housing projects.

To date, the 46-unit Eastman Meadows project has sold two of the six units initially set aside for sale to qualified low- and moderate-income buyers. Town Manager Michael McGovern said it’s likely buyers are unwilling to accept the resale requirements that go with buying a moderately-priced home in Cape Elizabeth, under local ordinances.

“Any gain in the value of the house needs to be split evenly between the town and themselves. People just aren’t willing to spend $400,000 to deal with that provision,” he said.

According to the affordable housing provision of Cape’s zoning ordinance, as 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 earning 80 to 150 percent of that same median income.

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.

Joel FitzPatrick, president of FitzPatrick Associates and owner of the 46-unit Eastman Meadows condominium project, has produced affidavits stating that, after years of trying, he had only sold two of the six condos he was required to offer at affordable rates

Meanwhile, McGovern said in a memo to town councilors that low-income affordable units priced at the $210,678 rate, for families making less than $61,100 annually, do tend to sell quickly. However, he did not know how much the town got from the sale of the two units councilors let FitzPatrick sell last year at market rates, saying he would get back to the council on that question.

In past interviews, Town Planner Maureen O’Meara has said Cape Elizabeth’s affordable housing rules “might need a little tune-up.”

Part of the issue, she said, is the moderate and low-income qualifications, which are set using regional income data provided by the Maine Housing Authority. The near-$400,000 price tag deemed “affordable” by the housing authority has been met with incredulity over the past few years.

“I just can’t believe that,” McGovern said, when the issue last came up, “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 last year.

“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.

A change in the definition of “moderate income” for determining affordable housing eligibility is proposed in a set of technical amendments to town ordinances now winding their way through town hall. The change would limit income to 120 percent of median family income for the Portland area, rather than the current 150-percent cap. Moderate family income as currently defined can go as high as $114,000, McGovern said.

The planning board will hold a public hearing on the proposed changes at its June 21 meeting. Any recommendations in votes in will then move on to the town council.

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