AUGUSTA — State Treasurer Bruce Poliquin is taking aim at what he calls wasted spending for public housing projects in Portland and Waterville, saying per-unit development costs exceed costs of single-family homes. But the Maine State Housing Authority said his calculations are off base and taxpayers are getting their money’s worth.
Poliquin plans to air his concerns at Tuesday’s meeting of the Maine State Housing Authority Board, on which he serves. He also outlined his concerns on his most recent treasurer’s blog, in which he cited the Portland and Waterville projects.
In Portland, the planned 38-unit Elm Terrace low-income apartment project has a per-unit cost of $314,000, Poliquin said. He asked whether that cost makes sense when the median single-family home sells for $159,000. The Maine Association of Realtors listed the median sales price in Maine as of February at $159,450.
“Why should our fellow Mainers be asked to subsidize housing which they themselves cannot afford to live in?” asks Poliquin.
Another state housing authority project cited by Poliquin consists of mostly one- and two-bedroom apartments that have been built within the former Waterville Junior High School, at a cost of $292,000 per apartment. Poliquin said a quick scan of Realtor.com turned up a home in neighboring Winslow with three bedrooms, three baths, hardwood floors, custom kitchen, stone fireplace, finished basement, and attached 2-car garage selling for $285,000.
“What’s wrong with this picture?” he asks.
MSHA said a lot is wrong with the treasurer’s facts and figures.
In the Portland example, the $314,000 is overblown, said Peter Merrill, MSHA director of communications and planning. The project’s original estimate was $243,000 per unit, but the developer added expenses related to asbestos and lead paint removal and other issues. The authority refused to pay the $314,000 figure, but is considering paying $266,000, said Merrill.
In both the Portland and Waterville examples, comparing public housing prices to that of private homes is “apples and oranges,” Merrill said. Developing subsidized housing involves any costs that aren’t factored in when buying a house, such as hardwired fire detection and sprinkler systems, compliance with disability standards and costs of other government standards that must be met.
Poliquin is also not considering the added cost of developing historical properties into housing, as state and federal policies favor, said Merrill. But he noted that the housing authority is not paying for that preservation; the federal and state governments are through tax credits they offer.
“The reason we’re doing it is that the law makes that incentive possible, and we’re following the law,” said Merrill.
He added that the authority has in recent years taken several steps to contain costs, such as limiting the amount of subsidies and tax credits allowed per unit as well as developer fees per unit, and applying energy saving standards that produce savings over the long run.
The housing authority issues bonds for projects across the state that provide housing for 90,000 households.