AUGUSTA, Maine (NEWS CENTER) - How much should it cost to build affordable housing? That question stirred hot debate in Augusta Tuesday, as the Commissioners of the Maine State Housing Authority criticized the staff for allowing high price projects...particularly the proposed Elm Terrace development in Portland.

That project would be built in a historic building on High Street but the developer recently said the per-unit cost had risen to $314,000 per unit. Members of the Commission were highly critical of the MSHA for that, saying the high price tag was far from affordable housing.

The MSHA provides a mix of tax credits, tax incentives and direct subsidies to encourage developers to build housing that can be rented to low income people at below-market rates -thereby making it more affordable. Board members accused the agency of focusing too much on socially popular concerns like green building and solar energy-further driving up costs-and not paying attention to cost control for projects.

Authority Director Dale McCormick defended the agency. She said it had been working on cost control for several years, and that it was staff members, not the board, that blew the whistle on the projected price for the Elm terrace project.

McCormick said that developer had since negotiated the cost down to $265,000 per unit, although the project has not yet been approved by MSHA.

Commission Chairman Peter Anastos said that's still too high for affordable housing. He and other board members-and members of the public-urged the Authority to pursue new ideas for affordable housing, and do everything possible to lower per-unit costs, similar to what the private sector does.

No votes were taken on the issue.

NEWS CENTER