• Toorak

Private Capital at Work

By John Beacham


As city centers across the country become increasingly unaffordable, homeowners are looking further afield to find affordable housing options. The COVID-19 pandemic has only made this problem worse as the flight from city centers, combined with new migration patterns, continues to raise prices on homes that were previously accessible to those with lower incomes.


In parts of Maine, where the waitlist for Section 8 housing can be up to five years, local real estate entrepreneurs are working with lenders to renovate and reposition existing housing to meet growing demand—and improve their communities in the process.

Seeing Opportunity Early

Growing up in Windham, Maine, Andrew Maley remembers nearby Westbrook as the mill town with a reputation for being smelly and stinky—a place people generally tried to avoid. Although the mill wasn’t entirely shut down, Maley realized mills weren’t going to be around forever. He also believed places like Westbrook had tremendous promise for new housing and revitalization.


“I grew up seeing this place going through changes every single day and knew it was definitely one of the places to be,” says Maley.


When he turned 18, Maley got into real estate. While he was looking for areas where he could focus his efforts, he went back to the town that had caught his attention years prior: Westbrook, Maine. Still a little rundown, it had a lot of housing stock that was older, in need of lead abatement, or general renovation and remodeling.


Maley started wholesaling, doing general contracting projects, and working on flip homes before solidifying his focus on affordable housing.


“Affordable housing is how I got started. Where I’m headed is toward doing more of it,” Maley said. “You’re helping out the community and helping families—local families—that are coming from overseas into the country, land on their feet.”


The 1-4-unit homes he identified were initially valued at $320,000 average; after repair, they are expected to be $431,000 on average, affordable within the market.


All the properties are located within the 04092 ZIP code, which has a median annual household income of $55,000 ($4,600 per month).


After rehabilitation, the average mortgage payment for the homes is expected to be approximately $1,000 per month, or approximately $500 per unit per month. This represents just 11% ($494/$4,600) of the median household income per family, so it is well below the 30% affordability threshold determined by HUD.

Making It Work

Maley constantly looks for renovation opportunities and owns other companies that support his affordable housing efforts, including a wholesale network he uses to find distressed properties to fix up for the community. He pours the profits back into affordable housing.


“We just did one that was mold-damaged and where the floors were buckled; in short, the whole place had to be remodeled,” Maley said. “After we turned it over, the neighborhood loved it. Everybody was happy not to have the rundown house in the neighborhood. Turning that over and then turning it into affordable housing for people was great.”


Working as a three-man team and leveraging his electrical background, Maley handles the construction. His partner takes care of the office paperwork. Maley pulls in other contractors to help with projects as needed. Despite his small team, there is no lack of demand for renovations given the challenging situation with affordable housing stock.


“There’s actually a 5-year waitlist for Section 8 and affordable housing in our community,” Maley said. “When we finish renovating a property and market it to the government, I have around 150 to 200 people reach out in one day, and it gets filled immediately.”


Maley communicates with local housing authorities and agents each day to review his inventory and try to find matches for local families in need, even before beginning work on the properties.


“Local agents will contact me and say, ‘Hey, do you have a three bedroom, a two bedroom, a one bedroom, or a four bedroom?’ And I’ll flip through what we have and tell them. Then they’ll have somebody come in and take a look at it before it’s renovated. They know what our stuff looks like. And then we’ll sign them up and basically get them ready so that when the project’s done, they’re ready to sign a lease and move in. Then we’ll move onto the next project.”


The young developer’s efforts have led to more than just increased affordable housing stock. His improvements to the community have reverberated across social media, leading to changing perceptions of areas people previously avoided.


“A lot of the impact has been made on social media, because people know the Westbrook area as being run down and dirty. And after we’ve finished projects in some of the grittier areas, people come in and say ‘Wow, this does not look the same.’ It’s mind-boggling how paint, flooring, and a little bit of care can change a property and change people’s preconceived notions about an area.”