Bath’s housing crunch may get a little relief after the city council gave preliminary approval to a new rule allowing residents to create an additional living unit on their property.

According to Bath Housing Director Debora Keller, Bath has 2,640 single-family or two-family residences that would qualify to add a living unit under the new rule. If just 5% of those eligible homes took advantage of the allowance, it would add 132 new housing units in the city.

“Bath Housing has a vision that this region is vibrant, resilient and inclusive, and that everyone who works here, grew up here, wants to stay here or wants to come here has a reasonable opportunity to live here,” said Keller. “This new ordinance is an example of a local policy that supports this vision.”

Aside from providing more housing for those looking to move to Bath, Keller said the increase in housing could have ripple effects that benefit the region’s workforce shortage.

“We have seen an increase in rental prices over the past five years in the 70% range — and it’s clear that wages haven’t kept pace with housing costs,” said Keller. “The shortage of housing in the entire region — spanning Bath, Brunswick, Topsham, Freeport and surrounding towns — has impacted our ability to build and sustain a strong workforce. There isn’t a quick fix, but we need more housing, and we need to be working at this problem from a variety of angles.”

According to the Maine State Housing Authority, the price of a median home in Bath jumped from $190,000 in 2018 to $290,000 last year. As of last year, a Bath resident needed a median annual income of nearly $82,000 — a $39.35 hourly pay rate — to afford a median home. In reality, the median income of a Bath resident was about $55,500 last year, and about 67% of Bath residents were unable to afford a median home, according to the state housing authority.

Councilor Phyllis Bailey said the new allowance could help boost the area’s workforce at a time when Bath Iron Works is hiring in droves, as well as give financially stability to homeowners of all ages.

“It gives a lot of options to older homeowners who need to generate revenue to stay in their homes, keep repairs up and do their taxes,” said Bailey. “It also helps younger homeowners create income to pay their mortgage, provide housing to an aging family member or to a childcare worker or nanny.”

Four residents spoke in favor of the new rule during the city councilor meeting Wednesday.

The new rule will let residents create and rent out a living unit on the same property as their single-family or two-family home. The living unit can either be attached to the original home, exist within the footprint of the original home or be independent from the home on the same lot.

For example, a resident could rent out an unoccupied apartment over a garage. Or, if a family is occupying the entirety of a two-family home, that property could become a two-family. In any case, City Planner Ben Averill said the living unit must have its own kitchen, bathroom and living space and cannot be larger than two bedrooms.

The additional living unit must also be rented for at least 90 days and include at least one parking space.

A smattering of communities across Maine from Scarborough to Rockland have already taken the leap to allow residents to create and rent out smaller living units. The number of homeowners, however, that take advantage of the allowance varies.

Bangor passed a rule similar to Bath’s in 2019 and since then, only about three or four residents have created and rented out smaller living units, according to Planning Officer Anne Krieg.

Though residents have been slow to take the city up on the offer, Krieg said she believes the rule is “part of the solution” of how to increase housing in the area.

Next, Krieg said the city is considering altering its rules that currently only allow single-family homes in certain neighborhoods. She said the city is interested in “allowing for more density where you have walkable neighborhoods.”

In South Portland, Planning Director Milan Nevajda said the city now has about 106 living units that have either been approved and built, approved but are under construction, or that are pending approvals since the city first allowed them in 2004.

“Given the extreme housing shortage that South Portland faces, any regulation that helps add housing is valuable,” said Nevajda. “But beyond that, (secondary housing units) also provide a certain type of housing that should be thought about in a menu of diversified housing options.”

Nevajda said the kind of people who usually live in these secondary housing units is also important. He said studies have shown people usually rent them to family or people close to the owner of the primary home.

“In that sense, we need to understand that housing is not just a matter of counting units. It is where people live and their “home,” said Nevajda. “Certainly, there are other housing interventions that have produced more units, but (policies like Bath’s and South Portland’s) enabled the production of a (secondary) housing type, which is unique and extremely valuable.”

Councilors will vote whether to give final approval to the rule March 2.

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