AUGUSTA — In a move intended to help with Augusta’s worsening housing crisis, city councilors have agreed to offer a vacant parcel of land, at no cost, to the Augusta Housing Authority as the possible location for at least 24 affordable housing units.

The move has Augusta backing away from a previous proposal to put out to bid for a 1.85-acre parcel off Bangor Street, which the city has had since acquiring it for nonpayment of taxes as part of the former Statler Tissue site.

As part of the new plan, the city would enter into a three-year option agreement with the housing authority in the hope affordable apartments would be built.

The move came as a big — and pleasant — surprise to Amanda Olson, executive director of the housing authority.

“It was completely unexpected,” Olson said after councilors voted unanimously last week to offer the housing authority the property for $1, coming on the heels of a housing workshop last month at which councilors discussed the city’s and state’s lack of affordable housing. “Everyone in the community, the council included, is realizing that affordable housing is reaching a crisis point.

“We’ve seen a huge shift, with exponential increases in market rents, increasing to levels that are unattainable, especially to people who need a rent affordable to a lower income. There aren’t any vacant units. It’s a supply-and-demand thing.”

Matt Nazar, city development director, said the property on Park Street could accommodate about 24 apartments. Park Street is a short street off Bangor Street, next to the Queen’s Court mini-mall, where the old smokestack for Statler Tissue stood before being torn down.

Councilors said the property, which is assessed by the city for tax purposes at $32,400, presents an opportunity for the city to take direct action to help address the lack of affordable housing, a growing problem locally and across the state and nation.

“Obviously, there is a dire need,” said Ward 2 Councilor Kevin Judkins. “When we own the land, we can drive how we want that to happen. It sounds like we need to create as many of those units as possible.”

Olson said affordable apartments are so hard to find in Augusta that some Augusta Housing Authority clients with what are commonly known as Section 8 vouchers in hand are returning them to the authority because they cannot find places to rent.

She said some landlords, recognizing the increasing demand for housing at all price levels, are buying properties in Augusta, evicting the existing tenants via “no-fault” evictions, doing renovations and then increasing rents significantly.

“We’re seeing rents of $1,400 to $1,600 for a two-bedroom apartment,” Olson said. “It’s insane.”

Mark Wiesendanger, director of development for the Maine State Housing Authority, said Maine needs about 20,000 more affordable housing units throughout the state.

He said Augusta has a high percentage of renters — 47%, compared to 28% statewide — and more than 30% of the city’s housing stock was built before 1940. Thus, some of it is in rough shape and needs to be replaced, according to Wiesendanger. He said senior citizens are being hit hardest by the lack of affordable housing.

“There has been a dramatic increase in the number of people in poverty over the last five years,” Wiesendanger told councilors at the housing workshop. “Rental vacancy rates have dropped over the last five years.

“In looking at the people really struggling to pay for housing here, it seems that seniors are disproportionately affected. They’re being hurt more than the rest of the population.”

Olson said the housing authority, which has developed senior housing in recent years at the former Hodgkins Middle School and workforce housing on Maple Street, would consider what population to target for Park Street, such as seniors or families, before developing it.

She said the developments at Hodgkins and Maple Street are fully occupied and have waiting lists, and additional development of stand-alone housing is under consideration for property adjacent to the Hodgkins site.

Like similar housing developments in Augusta, including Hodgkins School Apartments, the Cony flatiron building, the Inn at City Hall and Maple Street Apartments, the project could be funded with low-income housing tax credits, if it wins a competitive process to access those funds.

Olson said she believed the Park Street property, which is within walking distance of services and meets other requirements of the low-income housing tax credit program, would have a good chance of winning funding.

The housing authority is also considering building housing at the current site of the Augusta Police Department after the department moves to a new station, proposed for Willow Street.

She said if all the proposed projects move forward, the housing authority would look to stagger them so they would not be on the same development timeline.

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