South Portland council advances rent control and shelter ordinances

SOUTH PORTLAND — The City Council moved ahead Tuesday night with its review of a rent control proposal and gave unanimous preliminary approval for ordinance changes that would allow homeless shelters in the city.

As initially proposed, the rent control measure would cap annual rent increases at 10% for landlords or companies that own more than 15 rental units in the city. It also would allow landlords to reset rents to market rates when units are vacated, but only once in 12 months.

Mayor Kate Lewis called the proposal “a modest stabilization ordinance” that would help hundreds of families who have faced “sticker shock” with rent increases in recent months. A majority of the council has indicated support.

Councilor Dick Matthews, who has said in the past that he opposed rent control, said Tuesday that he has spoken recently with many tenants on the west side of the city and he called their experiences with rent increases a “nightmare.”

The council decided to postpone a scheduled first vote on rent control to March 7 after making several small amendments that must be incorporated into the measure. One addition would prevent landlords from cutting services to tenants if they were blocked from raising rents.

Under the initial proposal, units built after rent control is enacted would be exempt for 15 years to avoid impacting new housing development. Units with rents regulated or set by government agencies also would be exempt, as would units charging below federal fair market rent.

Landlords would not be able to “bank” any of the annual rent adjustment to future years, which if allowed could lead to compounding rent increases in the following years. Landlords must give tenants written notice of the ordinance, especially when claiming units are exempt.

Supporters of the rent control measure said it’s intended to prevent price gouging without stifling apartment construction, promoting condominium conversions and encouraging landlords to raise rents regardless of their costs.

Opponents noted that a housing needs assessment done for the city last year didn’t recommend rent control, rents have fallen nationally in recent months and the overall economic climate has shifted since the Federal Reserve began raising interest rates to tame inflation.

Lewis has credited any cooling in the local rental market to the council’s action last spring to enact a six-month eviction moratorium and a 10% annual cap on rent increases, which have been extended through May.

Before the council took up the shelter zoning and licensing proposals, City Manager Scott Morelli noted that South Portland became a focus of Maine’s homelessness crisis during the COVID-19 pandemic, when several hotels became overflow emergency shelters for Portland’s Oxford Street Shelter.

Now that the city is requiring the hotels to resume regular operations by the end of April, Morelli said, the proposed shelter ordinances would prevent “improper use” of lodging establishments in the future and “expressly permit” homeless shelters in certain zones under defined performance standards and operating regulations.

Morelli also pointed out that MaineHousing has allocated a portion of $21 million in state funding for long-term homeless shelter proposals across the state. Grant applications are due Friday.

“With an ordinance in place, a nonprofit could utilize a South Portland location for such a purpose,” he said.

As approved by the council, the shelter zoning ordinance would add “shelter” as an allowed use, differentiated from other lodging establishments, that provides temporary or transitional housing for people experiencing homelessness.

The council will take a final vote on the shelter zoning and licensing ordinances at an upcoming meeting.

As proposed, the ordinances would divide shelters into three sizes:

• Large-scale shelter could accommodate 40-100 people and would require special exception approval from the planning board.

• Medium-scale shelter could accommodate nine-39 people and would require special exception approval from the planning board.

• Small-scale shelter could accommodate up to eight people and would be added to the city’s current definition of “community home,” which is a licensed single-family property housing individuals with disabilities.

Like community homes, also known as group homes, small-scale shelters would be allowed wherever residential development is allowed.

Large- and medium-scale shelters would be allowed in the Commercial General, Commercial Suburban, Professional Office and Light Industrial zoning districts. Medium-scale shelters also would be allowed in the Limited Business, Main Street, Village Extension, Broadway Corridor, Mill Creek Core and Meetinghouse Hill commercial districts.

Shelter licensing would allow a total capacity of 200 individuals among all large- or medium-scale shelters in the city, such as four 50-person shelters or two 100-person shelters. There would be no limit on the number of small-scale shelters.

Performance standards for large- and medium-scale shelters would include a variety of design and operational considerations, such as personal storage, food, laundry facilities, designated smoking areas, outdoor areas, security, on-site support services, lighting, fencing, parking, waste management and access to public transit.