Housing Advocates Celebrate Successes from the Maine State Legislative Session

By Ramón Kodi Suzuki López, NLIHC Field Strategy & Innovation Intern  

During Maine’s 132nd state legislative session, affordable housing advocates had notable success. The state’s first steady source of revenue for funding affordable housing projects was signed into law on June 20, and various changes were made to the state's construction and tax codes that will increase the construction of affordable units in Maine within the next two fiscal years.  

The most impactful of the housing related bills was LD 1082, which is expected to raise over $35 million and fund affordable housing projects in Maine by 2027. The bill proposed changes to the real estate transfer tax that would help ensure the future of affordable housing projects in Maine. Although LD 1082 failed to pass in the state legislature, it was successfully incorporated into LD 210, the state’s fiscal year (FY)25-26 budget bill that passed through the state’s legislature and was signed into law by Governor Janet Mills on June 20.  

The real estate transfer tax is placed on all real estate sales or transfers in Maine regardless of the asking price or size of the property. Historically, the funds have gone to affordable housing projects through MaineHousing, the Maine State Housing Authority. While the funding for the programs was expected to run out by this fall, the luxury real estate market has grown dramatically in the state, which is short 84,000 housing units.  

The tax changes that go into effect on September 18 will more than double the historical amount of tax revenue collected on luxury properties by imposing an additional tax rate of $3.80 per $500 of the property value for properties valued over $1 million (LD 210 section 4641-A). This is on top of the original real estate transfer tax of $2.20 for each $500 of the property value. First-time or low-income homebuyers who use one of MaineHousing’s first-time home-buyer mortgage loan programs are now exempt from paying the real estate transfer tax. This is expected to incentivize more home sales to residents participating in these programs since the tax is a split payment between both the buyer and the seller.  

The new provisions also establish an updated real estate transfer tax revenue distribution model starting in FY26-27 (LD 210 section 4641-B). Revenue will first go to meeting MaineHousing’s bond obligations. Then, 18% of the remaining revenue will go to the Housing First Fund, 32% to MaineHousing’s Housing Opportunities for Maine (HOME) Fund, and 30% will be applied to a new Housing Production Fund (LD 210 section 4773) that supports the LIHTC and the Rural Affordable Rental Housing program to be administered by MaineHousing. The remaining 20% will go into Maine’s General Fund. This new distribution model creates the first consistent funding stream for affordable housing in Maine.  

A number of other bills signed into law by Governor Mills over the month of June make changes to building codes and tax credits that will make housing more available and affordable across the state. LD 1829 changes height and area zoning rules to reduce barriers to developing affordable housing. To address the shortage of homes, LD 997 permits residential use in commercial zones, and LD 970 exempts infill residential projects up to 40,000 square feet, which will streamline affordable housing development. Other bills expand tax credits to incentivize affordable housing construction. 

Many of these legislative successes were due to strong and robust advocacy and mobilization in the months leading up to the bill’s passing. The Maine Affordable Housing Coalition (MAHC), an NLIHC state partner, led numerous advocacy efforts and prioritized outreach regarding LD 1082. MAHC made information about their priority housing bills widely available, published one-pagers on LD 1082 and LD 1829, and published an op-ed in the Portland Press Herald that detailed MAHC’s priority bills and called on residents to use their click-and-send email message tool to voice their opinions to state legislators during the legislative process.  

The future of affordable housing in Maine looks promising, but the fight continues. Many impactful housing bills are on the table for Maine’s next legislative session, including LD 690, which would issue a $100 million bond to further support MaineHousing’s LIHTC and Rural Housing programs. “Looking ahead, we’re encouraged by the momentum and committed to keeping it going. We urge lawmakers to keep the urgency of housing as the solution when they return to Augusta,” said Laura Mitchell, Executive Director of the Maine Affordable Housing Coalition.