Some say the volatile politics of real estate in Portland and repeated clashes over development are slowing efforts to provide more housing.

Some say the volatile politics of real estate in Portland and repeated clashes over development are slowing efforts to provide more housing. ​

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hen Portlanders elected a mayor in 2011, the candidates argued over who could bring the most economic development to the city.

This year, on the other hand, the new reality of Portland politics was written in large black letters on a white sign anonymously posted next to City Hall the day before the Nov. 3 election.

“City has sold out to developers,” it read, in all capital letters. “Vote out mayor and City Council who have sold out. Fire the city planner and Planning Board.”

The pace of rising rents, changing neighborhoods and development pressures is striking fear into longtime residents who don’t want to lose their city-with-a-small-town feel.

The result has been a series of political clashes – from the emotional fight over Congress Square Park to the failed referendum efforts to raise the minimum wage and save scenic views – all fueled in some way by the red-hot rental market and lack of vacancies, and a distrust of developers and City Hall.

Depending on whom you talk to, Portland is either falling victim to greedy out-of-control developers who are building luxury housing for out-of-state rich people, or it is finally seeing a healthy, sustainable growth of much-needed market-rate housing.

The volatile politics of real estate in Portland is, in some cases, slowing efforts to provide what some say is the most direct solution to the housing crunch: more housing.

“We are just letting the free market do its thing and that is squeezing local folks out and there is a lot of anger because of it,” said Richard Barringer, a research professor at the University of Southern Maine’s Muskie School of Public Service and a panelist at an October community forum called “The Challenge of Change: Are We Loving Portland to Death?”

“I think there is a general sense of alienation from the political system here in the city and that’s being expressed,” he said. “It’s easy to demonize developers. But things don’t get built without developers.”

Market-rate rents in Portland have jumped 40 percent in five years as apartment vacancy rates hover near zero and workers and artists struggle to compete with young professionals and empty-nesters for housing, according to this newspaper’s analysis of the city’s market and demographic changes. At the same time, median incomes have fallen for Portland’s renter households.

And as the market has heated up and become less affordable, so has the political tension.

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ity officials have begun to take action in response to the rental shortage.

The city is taking inventory of city-owned lands and identifying parcels, including parking lots, that could be sold for affordable-housing development.

Councilors passed an ordinance in October requiring that larger new housing developments include a percentage of units affordable to renters with incomes at or slightly above the local median.

And the city has removed barriers to housing construction on the well-developed peninsula by reducing parking requirements and other rules. It routinely grants zoning changes to allow developers to build taller buildings, and by extension, more housing units.

The City Council is also moving to regulate short-term rentals, such as the 250 city properties listed on Airbnb, in order to keep apartments from being siphoned off the housing market to become lodging for tourists.

Activists, meanwhile, have revitalized the Portland Tenants Union and are calling for renters to be represented at City Hall. Some want the city to prohibit landlords from raising rents on existing tenants and to require landlords to give 90 days advance notice of evictions, instead of the current 30-day requirement.

The city’s policy responses have generated debate, but it’s the market response – development proposals – that have increasingly roiled Portland politics.

In May 2014, developers broke ground on West End Place, a 39-unit building that was the city’s first market-rate apartment project in more than 20 years.

Since then, many other market-rate projects have been built or soon will be, including 86 condominiums in the India Street neighborhood, 29 luxury town homes on Munjoy Hill and 56 market-rate apartments in East Bayside. Other housing projects are also underway, from the downtown district to Deering Center.

Meanwhile, city officials recently announced that the so-called “midtown” project is expected to break ground later this year after several years of delays. It would be the largest housing development in Portland history, according to city officials, promising more than 400 units on Somerset Street in West Bayside.

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esidents, meanwhile, have begun rebelling against this rapid change, arguing that the city is not doing enough to protect what makes Portland attractive and unique, such as its history and working waterfront, and at the same time not doing enough to keep the city affordable to workers and artists.

The arguments pitting low-income and working-class residents against wealthy developers and out-of-staters who want to move to the city is what bothers developers, like Berman, the most. He said it’s the profit from market-rate projects that allowed him to build housing for the less affluent.

Silent protestors kneel in front of the Portland City Council as they vote to approve the sale of Congress Square Plaza to an Ohio investment firm

A man walks down Congress Street past a political sign calling for the removal of the mayor and city councilors. ​

“There’s too much pitting one against another when you need both,” Berman said.

While known for his diverse projects in and around downtown, Berman said the new political atmosphere now has made doing business in the city highly unpredictable for housing developers. “As far as the neighborhoods go, I would never do a big project in Portland myself.”

Mayor Michael Brennan said people are feeling anxious because the city is seeing unprecedented growth, but housing continues to be scarce and rents are increasing.

“I don’t think petition drives are necessarily a good thing for the city, but that type of activism is a hallmark for the city of Portland,” Brennan said. “We have people who care about the city, they’re passionate about the city and they want to participate in what the future of the city is going to look like.”

Portland does have a long history of such debate.

Today’s anti-development activism has its roots in the 1980s, when an unprecedented 90-unit waterfront condominium project, Chandler’s Wharf, led to a citywide referendum that continues to restrict development on the working waterfront.

The recent wave of development battles includes active social media campaigns and, in some cases, paid lawyers and political consultants. Development opponents testify before the Planning Board and City Council wearing stickers, carrying homemade signs and sometimes reciting poetry and history. They stage public demonstrations and, in a few high-profile examples, file lawsuits or collect signatures to take their argument directly to the voters through a citywide referendum.

The activism goes beyond housing projects and includes commercial development that residents have argued threatens the character of their neighborhoods.

In 2012, residents sued over a plan to convert part of the historic Williston-West Church in the West End into offices, winning an initial court ruling before ultimately losing before the Maine Supreme Judicial Court two years later.

And in 2014, a group of residents forced a successful referendum vote to block the city’s sale of Congress Square Park, a small, half-acre park at Congress and High streets, to a private developer that wanted to build an event center. Protests in that case included a sit-in at the park, people duct-taping their mouths at a City Council hearing and the arrest of one opponent for disrupting a council meeting.

About 200 people attended an October conference held at USM's Hannaford Hall examining the shifting landscape of neighborhoods in Portland

About 200 people attended an October conference held at USM’s Hannaford Hall examining the shifting landscape of neighborhoods in Portland as well as rising cost of living.

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ome of the biggest recent battles over development include projects that could bring additional housing into the market.

The Nov. 3 scenic views referendum grew out of opposition to redevelopment plans for the Portland Co. complex, a project that developers say will include housing and commercial uses but that also would also restrict the now-open harbor view from some Munjoy Hill homes. The referendum proposal sought to overturn a City Council vote to rezone 10 acres of land along Fore Street to allow taller buildings and more uses, including residential, on the waterfront.

“We found the process wasn’t working,” said Anne Rand, spokeswoman for Save the Soul of Portland, which initiated the scenic view referendum. “There’s a definite lack of trust about whether the city is listening to the complaints of the average citizen. And they are not.”

Some posts on social media leading up the referendum claimed greedy developers were destroying the city, piece by piece.

But developers contend the city does listen to residents, and that people are simply unhappy with the end results.
“Oftentimes the voice of a minority that is not happy with the decision being made by elected officials or planning staff or boards are trying to influence the direction things are going,” said Jim Brady, one of the developers behind the Portland Co project. “It seems like if there are a few who don’t like the decision they want to challenge it.”

Not all housing projects have triggered opposition campaigns. There have been more than a dozen smaller housing projects proposed or built in the past few years without much resistance, from the East End to the West End. Some developers appear to have successfully adapted to Portland’s politically charged atmosphere, whether by earning the trust of neighbors or carefully tailoring a project to minimize objections.

Redfern Properties has developed significant market-rate projects on the West End and Munjoy Hill without getting sued or being subjected to a city referendum. In October, the company received approvals for an eight-story, 139-unit apartment building on Congress Street where Joe’s Super Variety is located.

“Selling density to neighborhoods often is quite challenging,” said Jonathan Culley, Redfern’s owner. “Perhaps we’ve been more sensitive to neighbors and politics, and that has paid off.”

Other developers say sticking with smaller projects is the answer.

“The key to development in Portland is incremental change for the better rather than a sweeping project that massively changes the built environment,” said Nathan Szanton, who has developed three projects in Portland, two of which faced opposition over density and low-income units.

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o recent project has carried more hope for the housing market or run into more prolonged resistance than midtown.
The city initially welcomed the proposal to transform a vacant, weed-strewn patch of city-owned land in West Bayside into a high-rise housing complex. And, along with agreeing to sell the land, it gave approvals to Florida-based developer The Federated Cos. for four 14-story towers on Somerset Street that would bring 650 to 800 apartments into the city’s tight housing market.

A group calling itself Keep Portland Livable, led by two people who don’t live in the neighborhood and did not have to disclose funding sources, sued to overturn the approvals.

The critics said the project would only attract wealthy out-of-state professionals and retirees, rather than being affordable to working-class Mainers. And they argued that the tall buildings were out-of-scale with Portland’s character and history.

The group eventually dropped the lawsuit after the developer agreed to scale down the design to include 75-foot-tall buildings rather than 165-foot-tall towers. The revised project includes 440 apartments.

Even after the lawsuit was settled, however, the $150 million project stalled this summer as the city and developer clashed over the final plans and the terms of the original deal.

Now the city and developer say construction will start before the end of 2015, nearly five years after Federated began discussing redevelopment of the site.

Federated Chairman and CEO Jonathan Cox said the company was initially told it would take about four months to receive approvals for such a high-priority housing project.

“Time and money make this a very expensive place to do business,” he said.