South Portland needs more than 2,200 additional houses and rental units to meet the current demand for low-income housing in the city, according to a new study.

That shortage will impact residents of all income levels in less than a decade, as low-income owners and renters are forced to dip into housing at prices better-suited for those of higher incomes, causing a chain reaction of residents having to bite off more than they can chew.

Crane Associates presented the findings of its South Portland housing needs assessment study to the City Council Tuesday, giving the city a tall order to manage.

“I won’t sugarcoat it, these are big gaps and difficult to overcome,” said Michael Crane, founder and principal of the Vermont-based consulting firm that specializes in urban planning.

Based on the Crane analysis, South Portland needs an additional 1,419 homes on top of the 399 that already exist for those making less than 60% of the city’s 2020 median income of $71,541.

“The difference between supply and demand at different income levels is what the city will need to address,” Crane said.

Renters are in a similar situation, though the gap is 785 units for that income group.

While the current demand for housing for those with higher incomes – between 60% and 120% of the median income – is tame in comparison, including an excess in housing supply for the 100-120% range, the estimated gap in 2030 is troublesome.

Prospective buyers making 60% to 100% of the city’s median income face an estimated shortage of roughly 2,800 units by the end of the decade, and those making 100% to 120% of the median income will be in need of roughly 2,900, the study said.

That is due, in part, because the shortage of low-income housing is forcing those homebuyers into housing intended for those above their income levels. In turn, other income levels are required to do the same, creating a shortage of housing that would be deemed affordable for all income levels. The Maine State Housing Authority defines affordable housing as the owner or renter paying 30% or less of their annual income on housing needs like mortgages, rent, insurance and utilities.

South Portland, with a population of about 25,500, is also seeing an increase in residents ages 65 and over, and that demographic is expected to grow by 2.3% by 2030.

“The age of the householder rises and that has implications of whether or not he or she wants a renter or an owner unit,” said Jeffrey Carr, a consulting associate for Crane Associates. “Age is also correlated with income. That obviously changes the level of rent (or ownership) this household can pay.”

That will slightly increase the need for affordable rentals.

City Planner Milan Nevajda cautioned that the coronavirus pandemic complicated the study.

“It’s a highly complex subject with multiple moving parts, and that’s under normal conditions,” he said at Tuesday’s meeting. “We are absolutely not under normal conditions with COVID.”

Crane agreed. The study would have yielded different results if it had taken place pre-pandemic and would have allowed the firm to more accurately compare the housing needs of South Portland to surrounding municipalities, he said.

“The time that we’re doing this study, in the midst of COVID, is complicating matters dramatically,” Crane said. “If, in fact, COVID wasn’t happening and you had this same gap analysis … I would have to say that it is fairly large. Larger than we’ve seen in many of our other studies.”

Mayor Deqa Dhalac said the report gives her and her fellow councilors “a lot to digest.”

“This report is big, and it’s going to take us a while to really look at and really understand every little thing about it, ” Dhalac said.

Crane also stressed that the assessment is intended to update the council and get a feel for what questions councilors want answered ahead of a full report that the group will be working on in the new year. That report will also provide the council with suggestions and layout potential strategies in order fill the city’s current gap in housing.

Crane Associates will present their findings for community input in a virtual public forum from 6 to 8 p.m. Wednesday, Dec. 15. The Zoom link for the forum can be found at southportland.org.

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