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Advocates See Potential for New Modular Home Industry to Drive Demand for Forest Products and Address Housing Needs

A northern Maine organization aims to drive new markets for Maine forest products while simultaneously addressing the state’s need for affordable, energy-efficient housing. 


Millinocket-based Our Katahdin has commissioned a market assessment that it hopes will spur development of  a new high-production, high-performance, modular home industry in the Katahdin Region that could manufacture quality, affordable, and custom homes built 85-90% from Maine forest products. The “zero-energy” homes would incorporate dimensional lumber, sheathing, exterior siding, cellulose insulation, wood flooring, trim, and cabinetry produced in Maine into affordable, environmentally sustainable homes. 

The assessment is the latest project funded by the Future Forest Economy Initiative, which supports development of new markets for wood from the Northern Forest. Its purpose is to grow markets for wood and wood products to support the region’s economy and help keep forests as forests. The Future Forest Economy Initiative, which is investing $2.7 million in market development, is a cooperative effort of the U.S. Economic Development Administration (EDA), U.S. Endowment for Forestry & Communities, and the Northern Forest Center.

Our Katahdin’s project aims to tap into market demand for new affordable housing in Maine, which Maine Housing estimates to be 20,000 units. Our Katahdin will assess the market for this type of housing to be made in Maine, as part of a larger effort to draw new manufacturing to the Katahdin region.

“This assessment is testing the potential for what could be a significant benefit to Maine,” said Joe Short, Vice President of the Northern Forest Center, which manages the Future Forest Economy Initiative. “The region and the state need more housing, and the forest-based economy needs new markets to feed with the state’s abundant wood supply.”

“A new manufacturer producing 300 to 500 modular homes per year would use a minimum of 2 million board feet of dimensional lumber and create opportunities for new wood-based construction products such as wood fiber insulation and nanocellulose wallboard,” said Short.

The assessment will be specific to “net-zero” homes which have tight thermal envelopes, excellent insulation, and efficient heating and cooling systems. Net-zero homes that can access solar-generated electricity greatly reduce or eliminate monthly utility expenses for heat and electricity, even in northern New England.  Eliminating or significantly reducing utility bills is key to making and keeping homes affordable. 

Our Katahdin owns and is redeveloping One North, the town’s 1,400-acre industrial site, which has been identified as an ideal location for this type of manufacturing due to its ready access to forest inputs. The Town of East Millinocket is redeveloping the former mill site there, which has many of the same location advantages.

“If the market study bears out our concept, Millinocket, East Millinocket and the surrounding Katahdin Region in northern Penobscot County will be well positioned to benefit from a new, clean manufacturing facility that creates jobs and a quality product that’s in demand, locally and regionally,” said Steve Sanders, Director of Industrial Site Development for Our Katahdin. “A facility turning out 300-plus homes a year would create new jobs for 60 full-time employees – jobs our region needs.”

The results of the market analysis will be publicly available and are intended to provide information that will motivate entrepreneurs in establishing new manufacturing sites for modular housing composed primarily of wood products from Maine. 

The statewide market assessment for these zero-energy, affordable homes will quantify and qualify the need and demand for this product in Maine; define market and price points; identify homeowner educational needs, financing opportunities, barriers and opportunities in working with low-income buyers/renters; and compare the proposed Zero Energy Homes product with other housing products in the same market. The intent is to provide a market assessment with recommendations for integrating the data into a business model.

“The potential is enormous for addressing critical needs in Maine,” said Sanders. “We have a housing crisis of unprecedented proportions, and the houses we do have are, on average, the oldest, most fossil-fuel dependent in the nation. The Maine forest products industry needs new markets and Maine workers need new job skills and opportunities. A new modular home manufacturing industry will create jobs, a market for our wood, and more homes that people can afford to live in.”

Our Katahdin purchased the former Great Northern Paper Company site in Millinocket in 2017 and the Town of East Millinocket purchased Great Northern’s East Millinocket Mill in 2020. Both owners have been preparing their sites to serve new business tenants and actively cultivating businesses to locate there, with a particular emphasis on industries that can capitalize on the region’s wood supply and proximity to other wood manufacturers and markets.

For the Future Forest Economy Initiative, Short said, “This market assessment meets our objectives of commercializing new products from wood and testing new wood-based products. And the study can help market the region to potential new wood products businesses.”

Future Forest Initiative Invests in Development Markets for Northern Forest Wood

To date, the Future Forest Economy Initiative has committed almost $2.7 million to:

  • Expand markets for a mass-timber building product known as structural round timber (grant to Town of Ashland, ME); 
  • Increase demand for wood heating fuels through marketing (grant to a wood heat consortium); 
  • Produce design and pre-engineering work to advance a wood-fired district heating system (grant to Burlington Electric Department, to serve the University of Vermont Medical Center); 
  • Redevelop a mill in Bingham, Maine, to create jobs and the first domestically produced poplar plywood (grant to Somerset Economic Development Corp.); 
  • Implement a new heating system at the former Great Northern Paper company mill (grant to Town of East Millinocket, ME);
  • Research the feasibility of using wood from the Northern Forest in military vehicles, to replace tropical hardwoods (grant to State University of New York – College of Environmental Sustainability and Forestry); 
  • Acquisition & Commissioning of a Pilot-Scale Fiberboard Manufacturing Line (grant to University of Maine – Advanced Structures and Composites Center);
  • Enhance markets for certified wood and strengthen the supply chain for wood in the Northern Forest region through logger certification in New Hampshire, New York, and Vermont (grant to The Trust to Conserve Northeast Forestlands). 
  • Support certification of cross-laminated timber products made from Northern Forest wood (grant to University of New Hampshire – Cooperative Extension).

The Northern Forest Center is a regional innovation leader and investment partner creating rural vibrancy by connecting people and economy to the forested landscape.

The U.S. Endowment for Forestry and Communities is a not-for-profit public charity working collaboratively with partners in the public and private sectors to advance systemic, transformative, and sustainable change for the health and vitality of the nation’s working forests and forest-reliant communities.