City’s rental market booms

ELLSWORTH — Ellsworth real estate developers are betting that the city’s rental market will continue to boom, despite projections that population growth will be nearly flat.

Over the past two years, the Planning Board has issued permits for 145 units in the city — 43 more than were issued between 2008 and 2016. But with a projected population growth rate of 1.4 percent over the next two decades, will there be enough renters to fill all of these units?

Ellsworth had the highest rate of growth — nearly 20 percent — of all cities in Maine between 2000 and 2010, according to the U.S. Census. (Twenty-one municipalities in Maine are classified as cities. The rest are categorized as towns, plantations or unorganized territories.) But growth leveled off after the recession. According to the State of Maine Office of Policy and Management the city will add only a few hundred new residents before 2034.

This doesn’t worry builders or staff at City Hall, who say that much of the construction is a response to pent-up demand, They say units are filling before developers have even finished building.

Mike Wight, president of Broughman Builders in Ellsworth, said the company had its best year ever in 2017 and has fully recovered from a “substantial drop off” after the recession.

“Even in the worst economy, Ellsworth never stopped growing,” said Wight, who last year completed a six-unit project on Franklin Street. Wight added that his home construction business has also picked up, and that clients are asking for more amenities and larger footprints.

“Unemployment is down, stock markets are up, people are getting paid more — either because you want to retain good help or you can’t find good help so you’re trying to dangle a carrot out there,” said Wight. He said he’s had no trouble finding renters and sees Ellsworth as a central point in the region.

“The city is well-rounded to suit most people’s needs,” Wight said.

Stephen Salsbury, owner of Herrick & Salsbury, agreed. He said he doesn’t see the demand for rental units diminishing anytime soon.

“It’s been going on for 20 years and we still haven’t caught up to the market,” Salsbury said. “There’s still more demand than there are units available.”

Salsbury said he believes people are attracted to the flexibility offered by renting.

“A lot of people now don’t want to own a home, they prefer to rent,” he said. “They go in, shut the door, and no worries.”

“None of my clients have any vacancies right now as far as I know,” Salsbury said. “Everything that’s been built in the last 10 years is all full.”

Ellsworth currently has a rental unit vacancy rate of 23 percent, according to State of Maine Office of Policy and Management. Seventy percent of those units are seasonal, with just under 17 percent listed as for sale or rent. These numbers are on par with vacancy and seasonal rates in Maine overall.

But City Manager David Cole says that although there are units available, the rental options do not address all the needs of the community, saying some are “aged-out,” in poor shape or unaffordable.

“We have needs across the board,” said Cole, referring to both low-income and market-rate housing projects.

City Planner Michele Gagnon agreed.

“There’s a cycle that needs to happen,” she said. “Housing needs to be healthy at all levels.”

The Maine State Housing Authority has classified rentals in Ellsworth as “generally unaffordable.” This means that a majority of renters are spending over 30 percent of their income on rent.

In order to afford the average $850 in rent and utilities for a two-bedroom apartment in the city, a resident would need to make at least $34,007. Sixty-two percent of renters in Ellsworth do not meet this threshold, according to the authority, whose data show that the median income for renters in the city was $28,211 in 2017.

The Maine State Housing Authority also notes that renting has become less affordable than home ownership and that unless more rental units are built, it will be even more difficult for renters to find affordable places.

“If the supply of existing rental units remains at current levels the cost of renting should continue to increase and add to the affordability problem we’re seeing,” wrote Richard Taylor, communications and research manager for the organization, in a 2014 report titled “The Shift to Renting.”

The report also notes that more stringent lending regulations, wages that have not kept pace with rising home prices and a cultural shift toward renting are all factors that have contributed to a statewide market favoring rentals.

Kate Cough

Kate Cough

Digital Media Strategist
Kate is the paper's Digital Media Strategist, responsible for all things social, and the occasional story too! She's a former reporter for the paper and can be reached at: [email protected]
Kate Cough

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