A major affordable housing bond that will have a huge impact on housing in the state also has the flexibility to help island and coastal residents.

The bond was part of a larger energy bill designed to reduce statewide heating oil consumption by 20 percent by 2020. The bill was passed as emergency legislation, so it took effect immediately after Gov. John Baldacci signed it on June 12.

The bill authorized $30 million in bonds over the next two years, but these bonds will be issued no earlier than July 1, 2010, according to a press release from the Maine Affordable Housing Coalition, which worked to help pass this bill. The program will be run by the Maine State Housing Authority (known as MaineHousing) and is designed to support the building or rehabilitation of multifamily affordable rental housing and the replacement of manufactured homes built before 1975.

“It is an enormous opportunity for everyone who cares about affordable housing for Maine people,” said Greg Payne, coordinator of the Maine Affordable Housing Commission. “It is the single largest state investment in affordable housing in state history. And the legislation calls for flexibility in the solutions so that the housing created responds to the local needs of the local community.”

“It gives all of us and Maine Housing a unique opportunity to help meet a whole host of needs,” said Payne. “It could provide 30 units in Kennebunk or it could help produce a three-to-five unit project on Peaks Island.” The bill will provide largely for rental housing, according to Payne.

A key provision of the bill for coastal and island residents calls for flexible standards for development size and income eligibility. Up to 30 percent of the bond can be issued using these flexible guidelines. The bill also calls for increasing the supply of housing near jobs and services.

“The rural workforce component of [the bill] can be helpful with the islands, especially with the proactive island affordable housing groups,” said Speaker of the House Hannah Pingree (D-North Haven).

Typically affordable housing goes to those making 60 percent or less of the area median income, as defined by the federal Department of Housing and Urban Development. But island and coastal residents who make more than these guidelines still don’t earn enough to be able to afford to live on island or in a waterfront community.

 “This legislation is critical to sustaining an affordable coast because the average working household can only afford one-half the cost of a house on most of the island and working waterfront communities along the coast of Maine,” said Rob Snyder, vice president of the Island Institute, which publishes Working Waterfront.

Higher property values and the higher income needed to live on islands has made providing affordable housing challenging on islands.

Beth Howe, chair of the Chebeague Island Community Association’s Affordable Housing Committee, said flexibility is crucial for island projects.

On Chebeague there is a lack of smaller rental properties. There are seasonal rentals, and right now there are seven summer homes rented in the winter. “But every spring they have to move to someplace else,” Howe said.

“And scale is really important,” Howe said. The housing committee might want to provide just one or two units, because that is what is needed. Most island communities don’t have the demand to justify large housing projects.

Many factors contribute to the income level set for affordable housing. “We set our income limit fairly high because it just costs more to live on the island,” Howe said. In October 2007 the housing committee set the upper limit for renters at 120 percent of the median income for a Cumberland County family. At 120 percent of median income, a family of three earned $62,400; at 50 percent of median income, that figure was $26,000.

In addition, the housing committee has to make sure there is money to cover subsidized units. And low-income renters end up on a years-long waiting list for subsidized housing in Cumberland County in order to get the voucher for federally subsidized rental housing, because the demand for affordable housing in Portland is so large.

MaineHousing, which will operate the program, will develop the details of the new program.

“Over the coming year the Island Institute, Genesis and CEI will be working together with input from island housing groups and the Maine Islands Coalition to ensure that this funding is programmed to meet island and remote coastal community needs,” said Snyder.

“As part of the Steering Committee for the Maine Affordable Housing Coalition our organizations will also ensure that this funding meets the needs of rural communities in similar situations around the state” he said. Snyder is on the coalition’s steering committee.

David A. Tyler is the editor of Working Waterfront