Bath has pumped the brakes on a proposed tax break for a Rockport-based company to build 30 units of affordable housing.

The city council tabled the request Wednesday  after three residents spoke in opposition.

Realty Resources, a Rockport-based property management company, is asking Bath to designate its proposed subsidized housing project as an Affordable Housing Tax Increment Financing (TIF) District and adopt a credit enhancement for the project. TIFs are a common financing tool municipalities use to pay for public projects. They essentially funnel any increased tax revenue in a defined district toward specific purposes instead of a municipality’s general fund. In an affordable housing TIF district, communities to use the incremental tax revenues from that district to help make the housing affordable and to pay for related costs.

If awarded the TIF district designation and subsequent tax credit, the city would refund 50% of the housing development’s taxes, totaling $40,106 annually to Realty Resources. Over 20 years, the company would receive $1,077,663 in total in refunded taxes.

Resident and former Bath City Councilor John James argued the city should look into ways to offer more housing without burdening taxpayers. James cited data from the Maine State Housing Authority stating that Bath had more subsidized housing units per 1,000 residents than any other Maine municipality with the exception of Portland.

“We have more housing than Augusta, more than Westbrook, Lewiston, Bangor, Auburn or Sanford,” said James. “And we’re just a small town of 8,338 residents. For our population, we have almost eight times more subsidized housing than Brunswick.”

Bath has 630 subsidized housing units, giving the city a ratio of 75.5 units per 1,000 residents, James said, citing Maine State Housing Authority data.

However, only 550 units have been built, giving the city about 66 subsidized housing units per 1,000 residents, still the second highest out of the state’s 40 largest municipalities.

“The Bath community should feel very good that we have more than fulfilled our social responsibility and obligation for subsidized and affordable housing north of Portland,” said James. “However, as the Bath Housing Authority’s recent study of January 2021 recommends, it is time to start a dialogue with outlying communities for them to construct their own subsidized housing and for Bath to adopt an ‘accessory dwelling unit’ ordinance to provide some desperately-needed relief.”

Resident Sean Ireland encouraged councilors to take their time finding and analyzing data on local subsidized housing.

“I think it’s clear that we’re a community that’s in transition and the housing stock is out of balance,” said resident Sean Ireland. “These decisions that we’re faced with now and in the future are really complicated and my fear is we don’t have the data and the information we need to do the analysis and make decisions.”

Some councilors were hesitant about allowing the TIF, noting other affordable housing developments in Bath owned by Realty Resources — such as Maritime Apartments and Oak Grove Common — are in disrepair and are not maintained well.

“Your organization has a reputation in regard to some of its other properties of not being top-notch in terms of maintenance we’ve heard from tenants,” Councilor Phyllis Bailey said. “Why should we expect this property to be well taken care of?”

Realty Resources Chief Financial Officer Bill Pearse said the company is aware of one development, Oak Grove Common, “which has fallen into disrepair.” He said the company has “funding in place and we’re going through the process of getting federal and state approvals” to use the money to spruce up the property.

Housing for those who work in Bath but can’t afford to live there

Realty Resources hopes to build a 30-unit workforce housing development that would be spread across three buildings on 4.22 acres at Oak Grove Avenue. The development would hold 18 two-bedroom units, nine three-bedroom units, and three four-bedroom units, according to Pearse.

Monthly rent would be $830-$1,450, based on whether a tenant earns 50%, 60% or 80% of the area median income, to address the area’s need for more affordable housing.

“We’re looking to market this to workforce individuals who work in your community,” said Pearse. “This would be for people who work at Bath Iron Works … in your hospitals, supermarkets and retail spaces. These are people who are looking to work in the Bath area and raise their families, but can’t find housing.”

With the development, Realty Resources anticipates bringing in just under $30,000 monthly, or about $340,000 income with a 5% vacancy rate.

The company also plans to apply for a 9% tax credit through the Maine Housing Authority, and Pearse said a tax credit from Bath would help the company’s chances of being approved by the state.

The council will revisit whether to grant Realty Resources the tax credit July 21.

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