The Madison Affordable Housing Project is underway

A new affordable housing project is underway in Madison that aims to ease the area’s housing crisis.

The 18 units will help provide housing for workers at local businesses such as shoemaker New Balance and TImberHP, which produces wood fiber insulation.

Gov. Janet Mills and local leaders attended Friday’s groundbreaking, even though work began five days ago, developer Sam Hite said.

Hite, Cara Wilber and Brian Eng spent more than 18 months working with the city of Madison in Somerset County and the state to revitalize the public-private partnership.

“Madison and the greater central Maine community are in a special position as a shining star in rural economic development with a housing-based initiative leading the way,” Hite said.

The project, called 55 Weston Avenue, benefits from state funding through the Rural Affordable Rental Housing Program, a $20 million initiative that is part of the governor’s jobs and recovery plan.

Dan Brennan, head of MaineHousing, said the funding allows his agency to work with developers on smaller projects in rural areas. He said an additional $35 million approved by lawmakers this year will allow even more projects to get off the ground.

The Madison project will be built using modular construction, with much of the building done at a company in southern Paris. If all goes according to plan, the project will be completed in the spring.

“Modular construction in Maine has to be part of our future if we’re ever going to get out of this affordable housing crisis,” he said. “The foundation has just been started and before the snow melts next spring this building will be ready. That’s a speed we don’t see in this state.”

The building will sit on the site of a former school that was demolished in 2013, prompting city leaders to spend the next eight years trying to attract a developer to build housing on the site, said Tim Curtis, a former Madison city manager and current Adm. of Somerset County.

He said the units — which will be a mix of studios, one-bedrooms and two-bedrooms — will not only serve as workforce housing, but also as a place for those downsizing from larger homes.

“This allows older generations to downsize, thereby freeing up a three- and four-bedroom house for a new family to move into,” he said.

The project — which developers hope to expand by an additional 18 units in the future — follows the June announcement that New Balance, based nearby in Skowhegan, is expanding. The company plans to add 200 jobs as part of a $65 million factory expansion.

Then in July, TimberHP began production at a renovated factory in Madison. The company employs nearly 70 people and plans to sell three products nationwide by the end of this year, according to the company’s website.

It also plans to hire an additional 120 workers over the next few years, Mills said.

A study released earlier this month showed Maine needs to build more than 84,000 new homes by 2030 to deal with underproduction and expected population growth.

This can include new homes and rehabilitation of existing homes that are vacant, in disrepair or in foreclosure, according to the Maine Housing Production Needs Survey.

The need for affordable rental housing is particularly acute, the report notes.

Although rent costs remained flat from 2016-2021, they rose in 2022 and 2023 “and outpaced wage increases, likely increasing the cost burden from 2021 onwards.”

In his remarks, Mills mentioned the study and the housing shortage that has affected many of Maine’s largest businesses, including Bath Iron Works, Bigelow Lab in East Boothbay and Jackson Lab in Bar Harbor.

“No business should be shut down because of a lack of housing for employees,” she said. “The strength of these businesses and the strength of our economy depends on building housing for the workforce, especially in rural Maine.”

Mills said state and federal funds have led to the construction of 600 new homes since she took office, with more than 1,000 more under construction and 2,000 under construction.

“We need affordable housing that minimizes sprawl and preserves local communities,” she said.

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