Gov. Paul LePage has lifted a moratorium that prevented the Maine State Housing Authority from issuing federally subsidized tax-exempt bonds that would have supported construction of hundreds of affordable housing units in the last two years.
In the next few weeks, the authority will begin the process of reviewing housing proposals in anticipation of issuing as much as $120 million in tax-exempt bonds over the next three years, said Deborah Turcotte, the authority’s spokeswoman.
The authority has a list of 56 pending housing projects, worth a total of $218 million, that would produce more than 2,000 new or renovated affordable and subsidized apartments across Maine.
Which projects will qualify for funding remains to be determined.
Avesta Housing, a Portland nonprofit housing developer and manager, has more than a dozen projects on the list and is eager to seek funding, said Dana Totman, Avesta’s chief executive officer.
“We have a number of developments that are shovel-ready to be built, we have thousands of people on our waiting lists, and contractors are calling us weekly looking for work,” Totman said.
Avesta has two projects that could move ahead fairly quickly, Totman said. One is the 28-unit Young Street Apartments in South Berwick, which already has Planning Board approval. Another is a proposal for 18 efficiency apartments at 134 Washington Ave. in Portland, where Avesta already owns the land.
In early 2011, the governor stopped authorizing tax-exempt bonds issued by the authority. The moratorium was part of LePage’s effort to control the state’s debt, though tax-exempt bonds are considered a good, low-risk investment and widely viewed as a helpful federal subsidy by most states.
When private investors buy these bonds, they automatically get a 4 percent federal tax credit designed to promote low-income housing development.
The authority typically approves a handful of 4 percent housing projects each year, Turcotte said.
The authority also approves a handful of privately financed projects each year that compete for about $3 million in 9 percent federal tax credits allocated to the state.
Approval of 9 percent projects continued during the governor’s bonding ban.
LePage’s ban on tax-exempt bonds caused developers — private firms, local housing authorities and nonprofits such as Avesta — to cancel or delay many housing projects, according to the Associated General Contractors of Maine.
In particular, the bonding ban hurt efforts to address the need to build 8,000 additional senior housing units in Maine by 2015 — a need identified by the state housing authority on the threshold of a rapidly growing 65-year-old-plus population.
The ban helped to create a backlog of at least 13 pending senior housing projects (558 units) across the state, from South Berwick to South Portland to Old Town, according to the Maine Affordable Housing Coalition.
With LePage’s backing, the state housing authority will finance at least $40 million in new and renovated rental housing for low-income families and seniors in the coming months.
“This type of bond is one more economic stimulus tool the state has in its tool box to create jobs and improve Maine’s economy through private investment,” LePage said in a written statement. “Most importantly, it will fund the creation or renovation of affordable rental housing for income-eligible working individuals and their families.”
The state housing authority has a top bond rating, Turcotte said.
Dozens of people help to build each housing project, including plumbers, electricians, architects and landscapers.
“We’re ready to put them to work,” authority Director John Gallagher said in a written statement. “We’ve notified developers and investors that the process is underway, and they’re just as anxious as we are to get started.”
Kelley Bouchard can be contacted at 791-6328 or