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Portland Press Herald

By TOM BELL, Staff Writer May 27, 2008 

Maine is at the doorstep of a huge demographic shift that is depressing demand for single-family homes in the countryside and increasing the desire for condominiums and small homes in cities and established neighborhoods, say housing experts.

Blame it on the baby boomers.

Virtually all the demand for housing over the next 10 years will be from people 55 and older, said Frank O'Hara, a housing specialist with Planning Decisions, a Maine consulting firm.

He said people in that age group are looking for one-story homes that are easy to maintain, affordable enough to buy with cash, and located in walkable neighborhoods near services, activities, culture, airports and health facilities.

Driving the trend is the disproportionately large number of people born between 1946 and 1964.

The number of households with people age 55 to 74 will grow by 6,000 a year for the next decade, according to data O'Hara compiled using Maine State Planning Office population projections. Meanwhile, the number of households with people age 35 to 54 will shrink by 2,000 a year. This is the age-group that typically buys the big house in the suburbs, O'Hara said.

Moreover, the number of households with people ages 25 to 34 is growing by 1,000 a year. Unlike the back-to-the-landers who came of age in the 1960s and '70s, this younger generation views city life as more desirable, he said.

This is all good news for Maine's cities, which have been losing population for decades, said Roxane Cole, a commercial real estate broker and president of the Maine Real Estate and Development Association.

In addition to meeting the needs of Mainers, she said, many developers see an opportunity for building vacation homes for wealthy retirees from out of state who are attracted to the "easy-living environment" found in many Maine communities, including Portland.

WITHIN WALKING DISTANCE

When Cole was marketing Four City Center, an office building on Congress Street, she was surprised by the number of people who wanted to convert the building's two-story loft into a residence. She said several told her that they wanted to live within walking distance to Merrill Auditorium.

"They love the idea of being downtown and being able to walk around," she said.

Developers who are now sitting on the sidelines because of the housing slump could get back into the game if they aim for the senior market, said John Wasileski, who is developing Highland Green in Topsham, a 290-unit project designed for healthy and active seniors.

He said the market for senior housing will remain strong even during the housing slump because the decision that seniors make to downsize and move elsewhere is often based on need rather than desire.

"This market is as resilient to a recession as you can get," he said.

Wasileski said that all seniors want the same things in terms of a continuum of care: to stay independent for as long as possible, to avoid additional moves, to make sure their spouse is cared for and to avoid the nursing home.

O'Hara noted that the amount of money the average retiree has available for a new home is down significantly from three years ago. So developers who want to pursue this market will have to find ways to reduce costs and keep the units affordable, he said.

Half of Maine's seniors age 65 and older live on less than $25,000 a year, O'Hara said.

INADEQUATE SUPPLY

For poor seniors, there are a lot fewer options than in the past.

Since the 1980s, the federal government has sharply reduced housing programs to help low-income seniors. The lack of funding, combined with the surge in the senior population, has already led to long waiting lists at many senior housing facilities, said Dana Totman, president of Avesta Housing, the state's largest nonprofit housing agency.

For example, 223 people are waiting for a vacancy in a 20-unit facility in Saco.

"It just illustrates how inadequate the supply is currently to meet demands," he said. "I am tremendously worried about low-income seniors."

While the Maine Real Estate Development Association can't stop the aging of Maine's population, Cole said, the group can help its members prepare for the profound changes that are already starting to occur as the state's population grows older.

On May 15, the association held a conference in Portland that focused on the needs of seniors.

Cole said local governments typically welcome senior housing projects because seniors require fewer services than families.

However, while municipalities want to attract these projects, she said, their zoning laws are often out-of-date, making development difficult. For example, many towns require minimum lot sizes of one to three acres per unit, which raises the cost of land and makes it impossible to build housing that is compact and affordable

"They want these in their communities, but they don't have what they need in terms of tools," she said. "An overhaul is needed in many communities to get to that point."

Staff Writer Tom Bell can be contacted at 791-6369 or at:

tbell@pressherald.com.

Copyright © 2008 Blethen Maine Newspapers

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