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Updated: September 26, 2023

On MDI, four towns band together to tackle problems of scarce affordable housing

white house and yellow house and lawn and trees Courtesy / Island Housing Trust Earlier this year, homeowners began moving into the Island Housing Trust’s new Jones Marsh affordable housing development outside of Bar Harbor.

A new group has come together on Mount Desert Island to tackle the problem of scarce affordable housing across the island’s four towns of Bar Harbor, Tremont, Southwest Harbor and Mount Desert.

Over the past year, MDI Housing Solutions has brought together representatives of local employers, nonprofits and the municipalities to create a framework for addressing the island's housing crisis, including the transition of housing stock turned into lucrative short-term rental units.

Various affordable housing projects and municipal planning strategies, along with some partnerships, have been underway within each town and in Acadia National Park in recent years. But MDI Housing Solutions is the first formal collaboration across the towns and the park.

In March, the group held a summit to discuss ideas for improving housing. The event was organized and facilitated by Noel Musson and Susanne Paul of the Musson Group, a land use planning and economic development consulting firm in Southwest Harbor.

The Maine Department of Economic and Community Development recently awarded the Musson Group $75,000 from the department’s Housing Opportunity Program to facilitate the implementation of projects identified at the summit.

The Housing Opportunity Program was established to encourage and support the development of additional housing units in the state, including housing units that are affordable for low-income and moderate-income individuals.

The Musson Group applied for the grant on behalf of the MDI Housing Solutions Steering Committee, and was one of 13 recipients in the state to receive the grant award. 

“The funding from this grant will enable us to make progress towards achieving goals identified at the summit in March,” said Marla O’Byrne, executive director of the Island Housing Trust and a member of the summit’s steering committee. It also includes Musson, Paul, David Edson from Friends of Acadia, Misha Mytar from Maine Coast Heritage Trust, Bar Harbor Planning Director Michele Gagnon and Tricia Blythe with the Knowles Co, a real estate agency in Mount Desert.

The hard facts

According to a report that emerged from the summit:

  • Only three of the 136 homes sold in 2022 were affordable to those earning the median household income.
  • The median home price on MDI in 2022 was $646,125.
  • The median household income on MDI in 2022 was $75,889.
  • The household income needed to afford the median home price on MDI in 2022 was $192,905.

Housing is increasingly scarce on Mount Desert Island due to a variety of factors, including market dynamics, regulatory forces, the high costs of construction, inflation, labor shortages, residual fallout from pandemic supply chain issues and low interest rates during the pandemic that spurred a surge in purchases of primary and second homes. 

“Mount Desert Island faces additional pressures due it its desirable location, limited land availability, limited year-round rental options, limited public infrastructure and a historically hot second-home market and, now, short-term rental market,” the report says.

The result is that the island’s housing stock is often unaffordable to year-round households and unavailable for seasonal workers. There are ramifications on the communities and the island-wide economy. 

“Major employers struggle to attract and retain workers, businesses are unable to stay open on a regular schedule, and service delivery of municipal and healthcare services are strained,” the report says.

Approximately 80 people attended the gathering. 

A crisis of many dimensions

Among the takeaways, the summit determined that the need includes housing for local seasonal and year-round employees, more year-round rental housing and greater variety of housing types.

Barriers to development include the island’s limited developable area, limited public water and sewer infrastructure, and the predominance of the seasonal tourism economy, which limits career opportunities for year-round residents and their ability to keep up with rising home values. 

Additionally, vacation rentals create lucrative investment opportunities that affect the housing supply. 

According to the report, potential solutions include:

  • Identify new funding mechanisms, such as local option sales taxes and transfer taxes, to feed a housing trust fund;
  • Explore incentives for year-round rental housing or home buying, such as a municipal program that provides tax rebates or payments for renting year-round, 
  • Ensure zoning, land use regulations and the local approval process allows for enough flexibility to produce more housing types.

In June, the Island Housing Trust received a $10,000 grant through the Belvedere General Charitable Grantmaking Fund of the Maine Community Foundation, which the trust said it would direct in part toward continuing the work coming out of the summit. (The remainder will go toward completion of Phase 3 of the trust’s first workforce neighborhood, called Ripples Hill, in Somesville, a village in the town of Mount Desert.)

The recent grant of $75,000 will go toward projects that focus on municipal technical assistance; research and analysis of new housing opportunities; planning and facilitating the next MDI Housing Solutions Summit; and community engagement and communication. 

The Musson Group’s grant application received letters of support from all four towns on Mount Desert Island, as well as Friends of Acadia, the Island Housing Trust, and MD 365. 

“As a service provider that works across the island and the state, the Musson Group is in a unique position to bring together a variety of perspectives, facilitate discussion and advance the great ideas that came out of the 2023 MDI Housing Solutions Summit,” said Susanne Paul, senior planner and GIS analyst at the Musson Group.

“We are also residents of MDI and personally impacted by the housing crisis on the island.” 

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