By ANNA FIORENTINO, Staff Writer Monday, October 9, 2006

"Portland is doing a great job of building market rates, and projects hitting seniors, but it's the young people, earning in the high $20,000s low $30,000s, that are being neglected," said Alfond, 31, president of The League of Young Voters.

Last winter, Alfond and Donoghue, 27, found an ordinance called inclusionary zoning, passed in cities such as Providence, R.I., and Fort Collins, Colo.

Voluntary inclusionary zoning gives developers of all new residential and mixed-use projects the option of making a certain percentage of units available to low-to-moderate income households at an affordable rate in exchange for incentives.

The young civic-minded guys took the ideato the Portland City Council's housing committee, which suggested they create an inclusionary zoning study group to explore drafting an ordinance.

The pair recruited neighborhood associations, City Hall employees and members of Avesta Housing, a nonprofit developer, to create the group. After months of research and discussion, the inclusionary zoning study group's report was formed into a draft ordinance that awaits consideration by the City Council sometime in the next few months, pending approval for recommendation by its housing committee.

Housing committee member James Cloutier said they will be voting on that recommendation by the end of the month.

"Most every young person lives with one or two roommates and still faces a financial crunch. This makes other communities look a lot more appealing," Alfond said. "A lot of the best and brightest are moving outside of Portland. This will prevent that from happening."

So what began as a discussion between Alfond and Donoghue now emulates Smart Growth initiatives across the nation -- with a twist that has received little opposition.

The twist -- the voluntary element -- sits well with developers.

"This kind of proposal is terrific for the city," said Nathan Szanton, a real estate developer and owner of the Szanton Co.

With involuntary inclusionary zoning, the developer always bears the burden of cost. The measure usually sees resistance. But with voluntary inclusionary zoning, the community shares the costs of providing affordable units, and only if the developers opt to participate.

"Many people have a vision of Portland which is significantly denser than the city allows. We need more affordable housing," Szanton said. "I would elect to do it even if I had the option not to do it."

A few years ago he built Casco Terrace, a 27-unit state-financed project with affordable rentals over an under-used parking garage on State Street in Portland. He transformed a spot originally zoned for eight units into a service to the community by utilizing special zoning approval. A few years later he built a similar mixed-use development on Congress Street.

Inclusionary zoning incentives as proposed in the draft include allowing more units than zoning normally permits, reduced parking requirements per unit, reduced required minimum unit size and reduced or eliminated building size regulations.

The percentage of new units that are affordable would vary between 5 percent and more than 25 percent, depending on what developers decide. That number would mirror the percentage of additional units they would be allowed to build, and would also be used to calculate how much the developers' building fees would be discounted.

Voluntary inclusionary zoning would apply to both rentals and homes for sale, residential and mixed uses.

Alfond's group found that the lack of affordable housing has grown over time.

"Portland is a majority renter city and that is especially true of young folk, yet we are increasingly being driven out of our apartments by condo conversions and back into a housing market with fewer choices," said Donoghue, who is one of five 20-somethings running for City Council this fall.

They concluded that only 23 percent of housing constructed, approved or pending since 2002 in Portland is considered affordable. The recent data in the study showed Portland is, by far, the least affordable place to live in Maine, they said.

In Cumberland County in 2005, 59 percent of households were unable to afford the median two-bedroom rent, while 73 percent were unable to afford the median home price, according to the Maine State Housing Authority.

The draft considers an affordable rental as one accessible to a household earning 80 percent or less of the median income for Cumberland County. It considers an affordable home for sale as one accessible to a family earning 120 percent or less of the median income. The area median income is currently set at about $44,048.

Cloutier said so far most city officials are proponents of the measure, adding it's a step forward in updating old zoning ordinances.

"I'm very worried that young people, after take-home, are not going to be able to buy a home," he said. "After peeling off student loans and one trip every six months to the Old Port -- about what they can afford" -- they don't have any money to spare.

He said rents have gone up dramatically in the last five and even 10 years.

"Those of us who are trying to get into the ownership market must do so outside of Portland as our zoning ordinances are such that they yield luxury condominiums for buyers of coastal getaways," Donoghue said.