Priority Real Estate Group has proposed a 140-unit apartment building project near the Bath Road entrance to Brunswick Landing along Admiral Fitch Avenue. Courtesy of Priority Real Estate Group

BRUNSWICK — Topsham developer Jim Howard has been planning a new 140-unit housing development in Brunswick Landing that could help put a dent in the area’s housing shortage. However, the increasing costs of moving the project forward could jeopardize its chances of getting built.

Howard, president and CEO of Priority Real Estate Group, has been working for 18 months on the proposed $26 million project, which would be located off Admiral Fitch Avenue near the Bath Road entrance of the former Navy base.

“The Bath-Brunswick Midcoast area needs some housing and with the growth we’ve seen at Brunswick Landing and even the growth at (Bath Iron Works), there’s been no new rental housing built of any substance for a decade or longer,” Howard said, “so we need some housing. Nobody else was doing housing.”

Priority Real Estate Group normally does commercial development but designed a rental residential project in response to the housing shortage. While there are about 500 former Navy housing units in Cook’s Corner and 700 in total in Brunswick, they filled up quickly after the base closed in 2011. The majority are not rental units.

The former base is home to several large and growing companies, including Wayfair and SaviLinx, whose employees will need a convenient place to live, Howard said. There are 135 businesses at Brunswick Landing employing more than 2,000 people, and that number is expected to double within the next five years.

Howard is proposing nine four-story apartment buildings with one- and two-bedroom units.

Building building costs

Howard isn’t certain he’ll be able to see the project through, given the rising price tag.

The costs for materials like steel rose almost 19% and aluminum rose 6 % in 2018 amid U.S. tariffs on imported metals, the Portland Press Herald reported. A national shortage of labor is the major driver of construction prices. The price of construction grew 5% in 2018 to the highest level since 2006, according to federal Bureau of Labor Statistics data.

Howard said the Maine Department of Environmental Protection has new stormwater standards and requires stormwater to be treated on-site rather than collected through stormwater drains. That is expected to cost $890,000, he said. He’s facing another $650,000 in local impact fees, levied to help cover the costs development adds to local infrastructure, such as wear and tear on roads, and services, such as policing, that the town would be on the hook for otherwise.

All these costs could drive up the price of rent.

“I don’t know if we can make enough rent in order to make the apartments work,” he said. “The town wants a $400,000 for the sewer, $150,000 fee for the recreation department, $50,000 fee for solid waste. By the time we’re done with DEP, I think the rents are going to be too high.”

Howard stressed that he isn’t complaining that the town is charging too much in impact fees, which are necessary. He said he is trying to bring to light why housing costs so much.

“When someone says why can’t we build affordable housing, that’s why,” he said.

He’s looking at market studies to determine if he can justify charging $1,275 a month for one-bedroom apartments and $1,650 a month for two-bedroom apartments.

How to meet the need

Since 2009, 363 new housing units have been built in Brunswick, according to Matt Panfill, Brunswick’s director of planning and development. There were 51 new dwelling units built in 2017, 74 dwelling units in 2018 (largely thanks to the multi-family Station Avenue apartments), and only 43 new dwelling units constructed in 2019.

“I think there’s a concern that impact fees may slow development of any kind, especially affordable housing,” said Panfill. “It’s one more obstacle or financing you have to account for. That said, there are ways to address that.”

Some municipalities have introduced an impact fee waiver that can be applied to affordable housing projects, for example, Panfill said.

The rental shortage is also driving up home prices in the area, as there’s more competition for homes that go up for sale.

Of the new housing constructed since 2009, there were 250 single-family homes, eight two-family units, 54 condominium units and 27 new mobile homes. It’s difficult to determine if there is a longterm trend of slowing construction due to rising construction costs, “but I would say we’re maybe plateauing,” Panfill said.

“We just need more housing variety,” he said. “To a certain extent yes, the affordability numbers don’t necessarily look good but I think part of addressing that is providing options that meet what the current market wants, so that may be part of a housing study.”

This is a rendering of what the 140-unit apartment buildings proposed by Priority Real Estate Group would look like. Courtesy of Priority Real Estate Group

 

 

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