Condominiums - A Great Way to Address Housing Challenges
Our 7 unit condominium development in Thomaston, Maine, featuring three stand alone “housedominiums”. This is Thomaston’s first condominium development.
When most people think of condominiums, they think urban, retirement communities possibly, or maybe ski resorts. They don’t typically think rural Maine, nor do many people see condominiums as a solution to Maine’s housing crisis, or a good option for first-time home buyers. But condominiums, and their first cousin, duplexes, can offer an excellent way to create home ownership opportunities. The difference between a duplex and a condominium is straightforward: a duplex has a property line going right down the middle of it (or between floors) with a shared wall, a condominium, broadly speaking, has shared elements and individually owned elements. Legally, condominiums are more complex, but have more potential benefits in shared costs. Duplexes require very little of their owners, but by their nature require a shared building, where condominiums can have individual stand alone houses (“housedominiums" we like to call them). The pros of condominiums are relatively straightforward:
1. Shared expenses. Anything shared comes with effort vis-a-vis working with others and understanding the condominium by-laws. Still, if you’re a first time home owner, or someone on a fixed budget, sharing costs such as insurance and plowing can be beneficial. And working with others can foster community.
2. Increased density. From a planning perspective, most of us would agree that preserving Maine’s open spaces is a good idea, whether these are farms, conservation areas or privately held land. These open , undeveloped areas define much of Maine’s unique character. Building codes that require an acre or in some cases 2 or 3 acres per dwelling unit lead to sprawl; over time Maine’s farmlands and open spaces will be gone. In many cases, condominiums can be built clustered together, helping avoid sprawl, whether as multi unit structures, or “housedominiums”.
3. Existing residential rentals can me made into condominiums, offering home ownership opportunities, as opposed to rentals. As a general matter, creating home ownership opportunities is beneficial for all communities; it’s the ultimate ‘skin-in’the-game’ as far as community development goes. Our federal policy has, broadly speaking, favored rentals (heavily subsidized benefits for building ‘affordable’ rentals) which garner tax credits for developers. These tax credits are then sold making affordable rental development lucrative for developers, though not without risk. The larger the better as far as tax credits go, a small development will never be worth the adminstrative costs for the Low Income Housing Tax Credit Program (LIHTC) which is why we often see large blocky buildings being built as affordable rentals, with little regard to character or community. This is not a criticism per se, but something community members should be aware of.
On the banking side, and the consumer side, there is work to be done. The banking regulations for would-be condominium buyers are more stringent than purchasing a single family home, and the requirements for developers are challenging as well. There are policy fixes to these challenges, but political will is another matter. These ‘protections’ are not without merit, but they deserve a second look in an era where housing needs are so great. The Urban Institute has written in more detail on this matter, and it’s worth exploring for those who want to understand the challenges.
Speaking from our own narrow experience, in some instances, Mainers as a whole, tend to think of their first home in a traditional fashion: a single family home with a piece of land. The trouble is, most would-be first time home buyers can no longer afford that option. A first, or even a second home purchase does not have to be your forever home, it can be a way to start building equity as you work for your forever home, whatever that may be.
Our first condominium “development” in South Thomaston, Maine, a two-unit development.
Over the past several years we have developed a handful of home ownership opportunities. We have attempted to keep these units “attainable” for buyers. Our two condominiums developments, one in South Thoamston, and our most recent development in Thomaston, on Booker Street, have been the first condominium developments in both of these tows. Both have provided home-ownership opportunities to working community members. Bringing new solutions (condominiums in rural Maine) is not without it’s challenges, but creative thinking and new approaches are what’s needed in this climate if we’re going to make any progress on the housing front.