‘Where did all the staff go?’: Maine restaurant owners blame the housing shortage

Maine’s Housing Crisis Forces Restaurants to Close as Workers Struggle to Find Affordable Homes

When Malcolm Bedell opened Honey’s Fried Chicken Palace in Thomaston last year, he envisioned creating a chain of restaurants across Maine. Today, that dream is on hold due to one critical challenge: finding staff who can afford to live nearby.

“Every single industry sector is being impacted by the lack of housing,” explains Quincy Hentzel, CEO of the Portland Regional Chamber of Commerce. “Almost every business is finding a shortage or difficulty in finding employees.”

The problem is particularly acute in Maine’s restaurant industry, where owners face a painful dilemma—they can’t afford to pay workers enough to keep pace with skyrocketing housing costs, and even when they can offer competitive wages, workers often can’t find available housing.

Bedell’s experience illustrates the severity of the situation. Despite five years of success with his original restaurant, Ancho Honey, which earned finalist awards for best burger and best fried chicken in the state, Bedell was forced to close it just one year after opening his new location—primarily due to staffing challenges.

Mike Fraser, who owns or co-owns five Portland restaurants after working in the industry since the 1990s, cited similar concerns when closing Paper Tiger at the summer’s end. “Not being able to operate a business where employees feel like they are appropriately compensated, enough so that they can live where they want to live, is the majority reason why,” Fraser explained. Facing continued losses, he recently took a job with a roofing company to supplement his income.

The impact on workers has been equally challenging. Ian King, a former Paper Tiger bartender with 15 years of industry experience, had only two weeks’ notice before losing his job. After securing work at Low Stakes Lodge, he found himself job-hunting again just a month later when that establishment also closed. King, who switched from kitchen work to front-of-house service to earn more money, eventually moved from Portland to South Portland with his wife to find more affordable housing.

Housing costs in Maine have surged dramatically, with median monthly rent rising from $870 in 2019 to $1,210 in 2024, according to U.S. Census Bureau data. In Portland, the increase is even more stark—from $1,245 to $1,711 per month.

The restaurant industry, already devastated by the pandemic, has struggled to recover. Employment in accommodation and food services didn’t return to pre-pandemic levels until summer 2023, according to Maine Department of Labor data. Meanwhile, the number of restaurants continued to increase, creating more competition for a shrinking labor pool.

“Anytime you need an icebreaker question, it’s just like, ‘Well, where did all the staff go?'” Bedell remarked. “I think a lot of people left traditional work during COVID and just haven’t come back.”

Though wage growth initially accelerated after the pandemic, it hasn’t kept pace with housing costs. “Housing was one of the items where even if the average cost of living was being covered by wages, housing wasn’t,” explained James Myall, economic policy analyst at the Maine Center for Economic Policy.

Restaurants operate on notoriously thin margins—typically around five percent profit on sales, according to David Turin, owner of David’s Restaurant in Portland and David’s 388 in South Portland. This leaves little flexibility to absorb increased costs for food, rent, and labor.

“The fact of the matter is right now that every restaurant that is open, certainly in Southern Maine, is a low-margin business,” Turin said. Though he believes he pays employees enough to afford housing, he’s lost approximately 20 staff members in the last four years because they couldn’t find places to live.

Recognizing the economic implications, the Maine State Chamber of Commerce recently launched the “Build Homes, Build Community” coalition alongside other business and housing organizations. “Housing is not a housing issue anymore. It is an economic issue,” said Chamber President Patrick Woodcock at the November campaign kickoff.

The state’s economic forecast underscores the urgency. Employment growth has slowed dramatically, from one percent in 2024 to just 0.02 percent this year, and is projected to decline further through 2029, according to the Maine Consensus Economic Forecasting Commission.

While building more housing represents the best long-term solution, policy changes can help in the near term, according to Myall. He suggests raising minimum wages and strengthening programs like the Eviction Prevention Program, particularly for vulnerable workers in tourist areas where second homes have driven up prices.

Community opposition to workforce housing projects remains a significant barrier, with Woodcock noting that residents concerned about preserving community character may not connect housing development with its role in lowering costs.

“We simply cannot grow if we have people moving away and are not attracting people into our workforce,” Woodcock emphasized, highlighting the stark reality facing Maine’s economy without adequate housing.