This month, a new pilot program is available to homeowners in Bath, Brunswick and Rockland, encouraging for the creation of long-term small rental apartments as a way to address the Midcoast housing shortage.

The Accessory Dwelling Unit Boost Pilot Program was designed to help more homeowners build small apartments on their properties. It is a partnership among the Midcoast Council of Governments, Bangor Savings Bank and the municipalities.

The pilot program can finance at least $50,000 of the costs to build, along with a paired grant of up to $10,000, provided the unit also meets certain building requirements, such as having a square footage that is less than the primary home and its own entry and exit. To be eligible for the program, the owner must have a total household income no more than 150% of the area median income, which is $154,800 in Bath, $164,250 in Brunswick and $150,300 in Rockland.

“We are hearing it from employers, we are hearing it from residents and we are hearing it from families who wish their kids could move back,” said Alexis Mann, senior policy strategist at the Midcoast Council of Governments. “There really just isn’t housing, and that is causing a lot of ripple effects through the community.”

Homeowners interested in the rental housing pilot program must contact Bangor Savings Bank to obtain a pre-approved loan to help build a new apartment or retrofit an existing structure. The Midcoast Council of Governments believed it was a win-win for residents to build small apartment units, generating extra income while also addressing the housing shortage in the area, Mann said.

The program is funded through Maine’s Housing Opportunity Grant Program. Upon completion of the small apartment project, homeowners can set their own rental rates.

“Bath is a really robust community with lots of different housing options, but even still, there is a real need to be able to add high-quality, safe rental units to the housing stock,” Mann said. “We’re thinking about housing as a continuum, so the more units that are available, the more choice people have to self-select into what makes sense for them.”