“Firestorms” are a terrifying phenomenon of the massive wildfires that have swept through western forests in recent years.
When a fire gets hot enough, an updraft of superheated air and ash rises high in the sky and cools to form clouds that behave like thunderclouds, triggering lightning that start more fires.
We recently got a glimpse of a similar phenomenon threatening to burn Maine’s already overheated affordable housing market. High rents lead to speculative investments, leading to even higher rents. Like wildfire, this broken market lives on. And in doing so, families lose their homes.
That’s what’s happening at Redbank Village, a 500-unit apartment complex in South Portland that has been providing affordable housing to the workforce in the area for 80 years. Six months ago JRK Property Holdings, a California-based investment firm, was attracted by the area’s high rents and bought the development. Redbank Village tenants recently received notices of rent increases ranging from $300 to $600 per month, increases of more than 20%.
Some people will say, “Bad luck, that’s how markets work. If rents are too high, people will move out, management will lose business and have to lower them. But the market can’t work if tenants don’t really have a choice.
Their only options are to pay or compete for a place in Portland, South Portland or Westbrook, where too many people are already looking for a small number of vacancies. Meanwhile, surrounding towns have few rentals available but cling to zoning regulations that make building multi-apartment complexes nearly impossible.
Despite a slowly growing population, Maine is experiencing a shortage of the right kind of housing in the right places. While we welcome property investors who want to build new housing to meet demand, what is happening at Redbank is different.
JRK bought the property for $143 million in November, paying more than double the selling price in 2016, the last time it changed hands. The company says the new rents are based on a study of prevailing rates in Portland, which has been battling a decade-long housing shortage.
Without building a single apartment, JRK plans to extract millions of dollars from working families in Maine. It might be profitable, but it’s not fair. And if that’s not enough, the complex was originally built with public funds to deal with an earlier housing crisis.
In 1942, the U.S. government built 250 duplexes near Long Creek in South Portland to house the families of men and women working at the South Portland Naval Shipyard.
Redbank Villiage was more than transient accommodation. The duplexes were designed as a neighborhood organized around an elementary school and community center, providing stable and affordable housing for people doing essential work. The complex passed from the federal government to the city and was sold to a private owner in 1954.
With the creation of the Maine Mall and other developments, Redbank has remained an affordable option, close to schools and jobs, and serviced by public transportation. Charging the inflated rents found in former working-class neighborhoods like Munjoy Hill in Portland will deprive this resource of people who desperately need it.
It is frustrating to see this happen, especially when no clear political solution is in sight.
South Portland has no rent control. The federal government stopped building housing in the 1980s and now acts indirectly, through the tax code.
Nonprofits are leveraging state and federal assistance to build affordable housing as quickly as possible. MaineHousing, the public housing authority, has 24 projects under development, but as they have put 572 affordable apartments on the market, landlords like JRK can raise rents in Redbank and put almost as many out of reach.
It should at least be clear by now that the market will not solve this problem on its own; Without intervention, it can only make things worse.
Our negligence has allowed this fire to become so hot that it creates its own climate. If we don’t do more, people will get burned.
Another view: Can a cartoon character turn viewers into LGBTQ? A Kansas senator seems to think so.