Maine tried zoning reform to fix its housing crisis. It’s unclear if it’s working.

In 2022, the Maine Legislature took a rare step and required municipalities to adjust local zoning rules in an effort to spur housing construction, a move that generated a fierce debate over state growth targets versus local control. Four years later, the State House may have finally worked out the kinks from that experiment.

Municipal legal experts and town managers are hoping a new bill, L.D. 2173, signed by Gov. Janet Mills a week ago, is the last word on land use restrictions, a technical but critical piece of the housing puzzle, for a while. The bill marks the second big adjustment lawmakers have made to zoning laws since L.D. 2003, the landmark 2022 legislation that required towns to remove some regulatory barriers in order to encourage housing production.

L.D. 2003 aimed to do this by eliminating single-family zoning restrictions and making it easier to build accessory dwelling units while creating support for communities to develop affordable housing. But many towns worried about how the law would work in practice and criticized its universal approach to zoning requirements, which they saw as infringing on community planning choices.

Lawmakers have tried to find the right balance ever since. The back and forth has caused frustration and uncertainty at a time when Maine needs roughly 80,000 homes to meet demand by 2030, according to a 2024 state study.

The four-year debate illustrated the power of Maine’s local control ethos and how it has shaped housing policy at the State House. Lawmakers trying to remove barriers to housing production ran into complex issues around infrastructure and community resources. Some said the efforts have done little to encourage affordable housing production so far, with communities needing time to adjust to the changes before the effects can be seen.

“The regulatory framework needs time to stabilize, and the revised provisions must be consistently applied before their effectiveness can be determined,” said Kate Dufour, the communications director for the Maine Municipal Association.

The idea behind L.D. 2003 was to change local housing density rules to encourage more development. The law allowed for more housing units per lot and greater density for affordable housing projects in designated growth areas, which are areas where municipalities plan to target most residential, commercial or industrial development in the next 10 years.

Municipalities were also required to allow accessory dwelling units on the same lot as single-family homes. Communities could no longer adopt local ordinances limiting housing to one unit per lot, essentially banning single-family zoning. And they were required to permit affordable housing developers to create more units than typically allowed.

Maine House Speaker Ryan Fecteau, D-Biddeford, who sponsored L.D. 2003, said in a recent interview that, while the bill was ambitious, it did not add rules to reduce allowable minimum lot sizes, which he thought would make starter homes more affordable.

This issue was tackled last year with L.D. 1829 by requiring minimum lot sizes to be no greater than 5,000 square feet. The bill also made some significant tweaks to accessory dwelling unit (ADU) rules by changing sprinkler requirements, prohibiting towns from requiring that owners had to live on site to construct an ADU and expanding where those units could be built. It allowed more affordable housing units per lot and reduced parking space requirements for those units.

It also allowed affordable housing projects to be built one story higher than a town’s zoning would typically allow and changed the minimum lot size limits for tracts both in and outside of designated growth areas served by public or special water and sewer systems. These last two provisions quickly generated pushback from municipalities, said Rep. Amanda Collamore, R-Pittsfield, the ranking Republican on the Maine Legislature’s housing and economic development committee.

The height exemption became an issue because some towns do not have access to firetrucks with ladders, making it dangerous to build a multi-story development without height caps, Collamore said. Limiting lot sizes for areas outside of serviced water and sewers created concerns that growth would be forced where towns did not want it.

“Towns started reaching out and saying we took their local control,” Collamore said.

L.D. 2173, which was signed by Mills last week, was conceived as a fixer bill to address these concerns: It clarified what counts as a public water and sewer system, and limited its density requirements to areas served by those systems. It also exempted environmentally sensitive regions from density rules. It allowed communities greater flexibility in setting lot sizes and density ceilings outside growth areas. Affordable housing development height bonuses are now subject to additional review.

Fecteau said the overall aim of L.D. 2003 and its legislative descendants was to take ambitious steps to remove barriers to housing. But he also acknowledged towns’ frustrations and said the process needs to have some “give and take” to ensure communities buy into that goal.

“I realize this is a balancing act between a state interest — to have homes people can afford – and local control, which the state has always taken great stock in,” Fecteau said.

With the dust possibly settling on zoning law changes, municipalities that have not adopted the housing density and zoning changes in L.D. 1829 now have more time to do so under L.D. 2173. The new law pushed back the deadline from July of this year to July 2027.

Gray Louis, a municipal attorney with Preti Flaherty, said many of his clients will be relieved to have that extra wiggle room, and hope it will be the last time they have to adjust their zoning rules. He said the four years of changes exposed how difficult it can be for some smaller communities to update their ordinances, which usually requires hiring legal counsel.

The “whiplash” from Augusta has not helped, he said.

“It’s a one-size-fits-all approach, but in reality each community is different,” Louis said.

The successive changes in law and deadline extensions mean it has been difficult to measure the effects of L.D. 2003, said Jamie Garvin, director of community affairs for the Greater Portland Council of Governments.

This is in part because up until recently there was no standardized way to measure housing development across the state. That changed this year, with a new law that requires municipalities with populations over 4,000 to report the number of building permits they issue each year. Data is expected to be made public later this spring.

The push for zoning adjustments at the State House also ignored a reality for many of the greater Portland metropolitan area communities, which have been growing quickly in recent years and were home to about a third of the state’s population in 2020, Garvin said: That growth comes with expensive costs.

“Our communities all share a strong desire to be contributors to solving Maine’s housing shortage,” Garvin said.

But desire at the state level to support housing also needs “concurrent support for development of the infrastructure to enable that kind of growth in the first place,” he went on to say.

Scarborough, for example, has seen consistent growth for decades in part because of its proximity to Portland, access to the ocean and the creation of the spur connecting Route 1 to Interstate 295. Director of Planning and Codes Autumn Speer said her department consistently gets 200 to 250 building permits per year.

The redevelopment of the former Scarborough Downs racetrack has added hundreds of apartments to the town. And the town has changed some of its multi-family density zoning rules in the last seven years, said Town Manager Thomas Hall.

The town does not need help encouraging housing, Hall said, and actively pushed for changes in L.D. 2173 because officials feared the town would be required to grow more, even as it struggles to keep up with its current development rate. What it does need, Hall said, are better local transportation options, calling traffic the “number-one issue” that stifles the region’s viability.

“We’re at capacity, and the cost and complication of the fixes is beyond any one community’s abilities,” he said.

Elizabeth Frazier, a partner at Pierce Atwood who represents the Maine Real Estate & Development Association, said she understands the arguments around supporting infrastructure for housing. But the idea that towns were being forced to grow beyond their desires through L.D. 1829, she said, is “pearl-clutching.”

“If a town doesn’t want growth, they have all the abilities to avoid having growth,” she said.

Frazier said the impact of L.D. 2003 and the subsequent bills is limited because it largely empowers communities to add housing in areas through growth zones, which they ultimately have say over. Adding ADUs has a limited effect on long-term housing, she argued. If the state really wants to encourage housing, it should tackle its limits on subdividing parcels of property into multiple new lots, which statute currently restricts to once every five years.

While zoning adjustments can encourage growth, they are far from the only factor developers face when trying to get a project off the ground.

In Ellsworth, there has been active support for a workforce housing project on Beals Avenue. The city has sought grants. The project is in the city’s urban core, where residential housing is being encouraged.

But developer LB Ellsworth LLC cannot quite get the project over the line yet, said partner Dan Black. The cost of developing the 36-condominium project is currently estimated at $425,000 per unit, he said, but each unit will sell for around $279,000. Development was delayed initially because of the need for a vernal pool study and to sort out a neighbor’s zoning waiver appeal.

Black said he is committed to seeing the project through, but those challenges make it difficult to guess when it will get off the ground. He never would have approached the project, though, if it was not for how the parcel was zoned. Under Ellsworth’s neighborhood zoning ordinance, 10 units can be put on a single acre.

“That’s incredible,” he said. “You only see that in some areas of Portland.”

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This story was originally published by The Maine Monitor and distributed through a partnership with The Associated Press.