What dissuading developers from a prime property in Maine capital city

What’s dissuading developers from a prime property in Maine capital city

There is a great chance to buy a home in the main city of Maine.

 

The listing says that the small house and barn are for sale on almost 7 acres that go down to the Kennebec River on Oxford Street.

 

The property is close to “Downtown Augusta, Maine State House, office buildings, hospitals, colleges, airport, shopping, and highway.” The land is designed so that it could hold almost 500 low-income apartments.

 

But the owner of the land has put it on the market for almost $2 million. The last time the property was valued was in 2006, when it was worth $145,000. The land was worth $44,300 of that amount.

 

The landowner, who wouldn’t talk to us for this story, put the price on it so high that it’s hard to understand why, but the city says that this will keep developers from building much-needed cheap housing there.

 

Keith Luke, Augusta’s head of economic development, said, “This is a great chance for growth.” If the owners are willing to be flexible on price, they should also be willing to be flexible on other things.

 

In Portland, Developers Collaborative, a for-profit housing developer, said it would not make an offer on the lot, even though the group is already building 20 assisted living units on a 0.8-acre lot next to it.

 

The owner of both lots is the same person. For $175,000, the group bought the 0.8-acre lot, and work will begin on the project next year.

 

About the 7-acre plot, Amanda Bartlett, COO of Developers Collaborative, said, “It’s not something that will work for anything we’re doing.” “When you’re building affordable housing, having a lower acquisition cost is often a necessary part of making the project work.”

 

Bartlett said that the city of Augusta and the landlord have been great to work with and have been very supportive of the group’s plan to build homes. However, this second lot’s price is too high.

 

And in more rural areas, especially north of the Bath-Brunswick area, Bartlett said that people who build inexpensive homes usually look for land that is cheap or, even better, land that has been given away.

 

That’s because rents are less expensive in rural parts of the state. Bartlett said that projects there “aren’t able to support debt in the way that they might be able to… in Southern Maine.”

 

As building costs go up, it’s even more important to have a low land purchase cost. In the past, she said, Bartlett’s group has paid $1 a year to rent land from the city of Augusta.

 

The assisted living development project is going to cost $5.5 million for only 20 units of housing, so the group can’t go ahead with their plan for a 500-unit development next door.

 

In the capital city of Maine, those machines would get a lot of use. A study done by the city’s housing authority in 2021 says that Augusta needs 449 affordable housing units for families and 424 affordable housing units for seniors.

 

It was found that less than half of the people in Augusta who are given a Section 8 housing grant can use it to rent a place.

 

In Augusta, land prices are very different. One piece of land for sale costs $1,222 per acre, while another costs about $431,000 per acre.

 

Some of the things that effect the price are where the lot is located, whether it has access to public utilities, and how easy it would be to build on. One example is that $431,000-an-acre lot that can be used to build 250 units of multifamily homes.

 

The Oxford Street lot is also very valuable because it is close to the town center, is zoned for dense housing, has a home and barn already built on it, and has access to public water and sewer services.

 

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