When a mill town loses its mill, most people assume the rental market goes with it. That is the wrong read on Old Town. The ND Paper closure did real damage here, but it did not land where landlords expect. It landed on the tax bill, not on the rent roll. If you own units in Old Town, or you are looking at a deal there because the price looks soft, the number that should worry you is $19.46 per $1,000, not the vacancy rate.
I want to walk you through what actually happened, what it did to the city budget, and what the demand picture looks like underneath it.
This post is educational, not legal advice. Maine landlord-tenant law is particular, and the facts of your situation matter. For advice on a specific property or tenant situation, talk to a Maine-licensed attorney or contact Pine Tree Legal Assistance at ptla.org.
What actually happened to the ND Paper mill in Old Town?
ND Paper bought the Old Town pulp mill in October 2018 and announced extended downtime on March 28, 2023. Operations stopped in mid-April. About 199 people lost their jobs. The mill has not restarted. As of this writing it sits idle on the Penobscot River, still owned by ND Paper.
ND Paper is a wholly owned subsidiary of Nine Dragons Paper (Holdings), the Hong Kong-based containerboard producer. The company completed the acquisition on October 19, 2018, picking up the bleached kraft mill plus roughly 100 acres. It reconfigured the plant for unbleached softwood kraft and recycled market pulp, restarted in 2019, and by its own account put more than $200 million into the site.
Then fiber and energy prices moved the wrong way. Jay Capron, ND Paper's director of communications and government affairs, told Recycling Today in April 2023 that the company would "continually evaluate market conditions for a potential restart." Some workers were offered positions at ND Paper's Rumford mill. Three years on, no restart has been announced.
This is the fourth time, not the first
Old Town landlords who have been in the market a while already know this rhythm. The site has been a paper mill since 1882. Old Town Fuel & Fiber shut down in August 2014, putting roughly 180 people out of work. Expera Specialty Solutions bought the assets that December, restarted, then idled the plant again at the end of 2015. The EPA's brownfields case file on the property puts the 2015 job loss at 350.
Here is why that history matters to you as an owner. Old Town's rental market has already absorbed two mill shutdowns in the last decade and did not empty out. The people who stayed after 2014 and 2015 are largely the same people renting units now. The 2023 closure hit a labor force that had already diversified away from the mill.
How much did the mill closure cost Old Town's tax base?
Roughly $2 million a year in property and business tax revenue, per the Bangor Daily News. That gap drove a budget crisis in 2025. The city cut 15 positions, took just under $1.8 million in state relief, and still raised the tax rate 9.94% to $19.46 per $1,000.
The sequence is worth understanding because it tells you where the next few years are headed. In April 2025, City Manager Bill Mayo told the Bangor Daily News that without state help, property taxes would go up 38%. The alternative he floated was cutting 17 positions, about a fifth of city staff, to hold the increase to 21%. Mayo described the pressures as "coming together not in our favor" all at once.
Old Town applied to the state for a revenue-sharing adjustment under 30-A MRSA §5681, the provision that lets a municipality petition when its tax base takes a sudden and severe hit. The state came through with just under $1.8 million.
Even with that money, here is what the June 2025 commitment looked like:
| Item | FY 2025-26 result |
|---|---|
| Adopted municipal budget | $16.7 million (down $124,490 year over year) |
| Positions eliminated | 11 full-time, 4 part-time |
| State revenue-sharing adjustment | Just under $1.8 million |
| Tax rate increase | 9.94% |
| Resulting mill rate | $19.46 per $1,000 of assessed value |
| TIF revenue lost to the mill closure | $91,204 |
| County tax increase | 11.4% |
| RSU school budget increase | 2.85% |
Figures from the Bangor Daily News coverage of the adopted budget and the City of Old Town's published FY 2025-2026 budget notes.
The city cut spending, cut staff, and took state money, and taxes still went up almost ten percent. That is the part landlords need to sit with. There was no easy lever left to pull.
In March 2026, the Bangor Daily News reported that early budget signals across greater Bangor, Old Town included, point to more increases driven by county and school costs. I would not underwrite an Old Town deal in 2026 assuming the mill rate holds flat.
What does a 9.94% tax rate increase do to your Old Town rental?
It comes straight out of net operating income. At $19.46 per $1,000, a duplex assessed at $220,000 owes about $4,281 a year, roughly $387 more than at the implied prior rate. On a two-unit building that is about $16 per unit per month you did not budget for.
Sixteen dollars a unit sounds survivable, and on a single cycle it is. The problem is compounding. If Old Town runs another 8% to 10% increase in FY2027, and the March 2026 reporting suggests that direction, you are looking at a tax line that grew more than 20% across two commitments while your leases turned over once.
Three things I would do with that if these were units we managed:
- Reforecast the tax line on every Old Town property annually, not at acquisition. Most owners set the escrow number once and let it ride.
- Time rent adjustments to the June commitment, not to the lease anniversary, so the increase you take is informed by the rate you actually got.
- File an abatement application if your assessment looks stale relative to recent Old Town sales. The mill rate is set; your assessed value is the part you can contest.
On rent increases, remember the state timeline. Under 14 MRSA §6015, you owe at least 45 days written notice, and at least 75 days if the increase is 10% or more, or if cumulative increases within a 12-month period reach 10%. A tax-driven catch-up increase can cross that 10% threshold faster than owners expect. Plan the notice date backward from the effective date.
Did rental demand in Old Town collapse when the mill closed?
No. Old Town's population estimate was 7,589 in July 2025, higher than the 7,431 counted in the 2020 census. Maine's rental vacancy rate hit 2.2% in January 2025. The demand engine here was never the mill. It is the University of Maine, next door in Orono.
Start with the statewide backdrop, because it dominates everything local. Maine's rental vacancy rate reached 2.2% in January 2025 per the Census Bureau series published by the St. Louis Fed, a record low for the series. The 2023 State of Maine Housing Production Needs Study, prepared for MaineHousing and the Governor's Office of Policy Innovation and the Future, found the state needed roughly 38,500 additional homes immediately and between 76,400 and 84,300 by 2030. Maine does not have enough housing anywhere, and Penobscot County is not an exception.
Now the local picture, from Census QuickFacts for Old Town city:
| Metric | Old Town |
|---|---|
| Population, 2020 census | 7,431 |
| Population estimate, July 1, 2025 | 7,589 |
| Households | 3,192 |
| Persons per household | 2.34 |
| Owner-occupied housing rate | 59.3% |
| Median gross rent (2020-2024) | $989 |
| Median household income | $51,585 |
| Median owner-occupied home value | $208,100 |
| Persons in poverty | 21.3% |
Two numbers there deserve attention. First, roughly 40.7% of Old Town housing is renter-occupied, which is a high share for a town this size and tells you the rental stock is a real market, not an afterthought. Second, median gross rent of $989 against a 21.3% poverty rate is a thin spread. Old Town is a working-class rental market with limited headroom on market-rate increases, which is exactly why the voucher discussion below matters.
How does the University of Maine drive Old Town rental demand?
UMaine Orono enrolled 10,870 students in fall 2024 against roughly 3,500 beds of on-campus housing. That gap pushes students into the off-campus market, and Old Town sits directly adjacent to campus. In fall 2024 the university placed 216 students in overflow housing after Estabrooke Hall closed.
The University of Maine System reported that Orono enrollment rose 1.5% to 10,870 in fall 2024. Systemwide, fall 2025 hit 25,870 students, the highest since 2021, though Orono itself saw a slight dip that year.
The housing side is the part that shows up in your rent roll. Estabrooke Hall's closure took roughly 96 beds offline, and the university put 216 students into overflow arrangements. Kelly Sparks, UMaine's vice president for finance and administration, described the response to The Maine Campus as using "space off-site, triples, lounges" to accommodate students.
A university that cannot house its own students is a landlord's most reliable demand source. It renews every August. It is insensitive to the local employment base. And it does not care that a pulp mill closed.
The trade-off is real and I will name it. Student tenancies mean August turnover concentration, higher wear, more co-signer paperwork, and a lease calendar that punishes you if a unit misses the summer leasing window. If you own in Old Town and you are not marketing into the UMaine cycle by March, you are leaving the strongest demand pool on the table.
Is an Old Town rental inside the Bangor Fair Market Rent area?
Yes. Old Town sits inside the Bangor, ME HUD Metro FMR Area, not the lower non-metro Penobscot County area. That matters because the Bangor HMFA payment standards run well above Old Town's median gross rent of $989, which changes the voucher math on most one and two bedroom units.
The Bangor HMFA covers Bangor, Brewer, Eddington, Glenburn, Hampden, Hermon, Holden, Kenduskeag, Milford, Old Town, Orono, Orrington, the Penobscot Indian Island Reservation, and Veazie. Properties in the rest of Penobscot County fall into a separate, lower FMR area. Being on the right side of that line is worth real money in Old Town.
Housing authorities set payment standards between 90% and 110% of the applicable Fair Market Rent. If the Bangor HMFA two-bedroom FMR runs materially above $989, a voucher tenancy on a standard Old Town two-bedroom may pay more than the open market does, with the subsidy portion arriving by ACH from a federal agency on the first of the month.
I am not telling you to take vouchers on every unit. I am telling you that in an Old Town market with a $989 median gross rent and a rising tax line, the voucher math has probably shifted since the last time you ran it. Run it again.
Do Bangor's tenant protection rules apply in Old Town?
No. Bangor's Chapter 282 Tenants Housing Rights Ordinance stops at the Bangor city line. Old Town has no rental registration, no rental inspection program, and no local tenant rights ordinance. State law is the whole regime. That means 45 days notice on rent increases instead of Bangor's 60, and no $75 screening fee cap.
I get this question constantly from owners with units in both cities, and plenty of them are over-complying in Old Town because they built one set of procedures around Bangor's rules. Bangor's Tenants Housing Rights Ordinance, effective March 9, 2023, applies by its own terms to rental units within Bangor city limits. Old Town's municipal code contains no equivalent. Its only housing chapter deals with subsidized-housing project approvals, not landlord-tenant relations.
Here is the practical comparison:
| Requirement | Old Town (state law only) | Bangor (state law plus Chapter 282) |
|---|---|---|
| Rent increase notice | 45 days; 75 days if 10% or more | 60 days minimum |
| Application fees | Permitted, subject to state limits | Banned outright |
| Screening fee cap | Actual cost only, one per applicant per 12 months | $75 hard cap, refundable above actual cost |
| Rental registration | None | Not required, but disclosure obligations apply |
| Rental inspection program | None | City rental housing coordinator enforcement |
| Tenant rights disclosure at signing | Not required locally | Required, signed, retained two years |
The state rules that do apply in Old Town
Everything in Title 14, Chapter 710 applies to your Old Town units the same as anywhere else in Maine. The ones that generate the most owner mistakes:
- Security deposits are capped at two months' rent under 14 MRSA §6032. The deposit provisions do not apply to owner-occupied buildings of five units or fewer.
- Deposit return runs 30 days with a written lease and 21 days for a tenancy at will, under 14 MRSA §6033. Miss it and you are exposed regardless of what the tenant did to the unit.
- Screening fees are limited to actual cost, one per applicant per 12-month period, with a copy of the results going to the applicant, under 14 MRSA §6030-H.
- Late fees cannot exceed 4% of monthly rent under 14 MRSA §6028.
- Since January 1, 2025, the fee limits and signed total-price disclosure enacted by LD 1490 apply at lease signing. This is the compliance item I see missed most often on small portfolios.
- Working smoke and carbon monoxide detectors are required at each occupancy under 25 MRSA §2464 and 25 MRSA §2468.
Add radon testing and disclosure under 14 MRSA §6030-D, energy efficiency disclosure under §6030-C, and federal lead-based paint disclosure on anything built before 1978. Given the age of Old Town's housing stock, assume the lead rule applies to your building until you have documentation saying otherwise.
Where do you file an eviction on an Old Town property?
The Penobscot Judicial Center at 78 Exchange Street in Bangor. Maine calls the action a Forcible Entry and Detainer, and it runs under Title 14, Chapter 709. For nonpayment you serve a 7 day notice to quit first. The summons must be served at least 14 days before hearing.
Evictions are heard in the District Court for the location of the property, and for Old Town that is the Penobscot Judicial Center. The Maine Judicial Branch's eviction guide lays out the sequence: notice to quit, then the FED summons and complaint, then service at least 14 days before the hearing date, then a writ of possession that does not issue for 7 days after judgment. The FED summons form (CV-034) is $5 from the clerk; the complaint forms are free.
Two things I will say plainly. Self-help eviction is illegal in Maine. Changing locks, shutting off heat or utilities, or putting possessions on the curb creates liability that dwarfs whatever you are owed. And the schedule above is a floor, not a forecast. Between notice, service, docket availability, and the writ period, an uncontested nonpayment case in Penobscot County takes longer than owners plan for. Build that into your reserve, not your hope.
How would I underwrite an Old Town rental in 2026?
With the tax line stressed harder than the rent line. Old Town's rents are supported by a tight statewide market and a university that cannot house its own students. The risk is municipal, not demand side. Budget for another tax increase and the deal still works on most stock.
Here is the honest version of the thesis, including the part that cuts against it.
The bull case is straightforward. A 2.2% statewide rental vacancy rate. A 40.7% renter-occupied town. An adjacent university with an on-campus bed shortage. Inclusion in the higher Bangor HMFA Fair Market Rent area. Acquisition prices that carry a mill-closure discount the fundamentals do not fully justify.
The bear case is the municipal balance sheet. Old Town cut staff, cut spending, took state aid, and still raised the rate 9.94%. The state revenue-sharing adjustment under §5681 is not a permanent fix. County costs are rising 11.4%. If the mill parcel never returns to productive taxable use, that burden stays distributed across the remaining tax base, and rental owners hold a disproportionate share of it because we cannot claim a homestead exemption on investment property.
My read: Old Town works as a hold, and it works as a buy if you underwrite the tax line at a 20% increase over two commitments and the deal still clears. It does not work if you bought the vacancy story instead of the tax story. Watch two indicators. If the mill parcel finds a taxable owner or use, the fiscal pressure eases materially. If UMaine Orono's fall census drops sustainably below roughly 10,500, the demand thesis weakens.
We manage hundreds of units across central and eastern Maine, and Old Town is one of the markets where the gap between what the headlines say and what the rent roll does is widest right now.
Frequently Asked Questions
Is Old Town, Maine a good place to buy rental property?
It depends on how you underwrite taxes. Demand fundamentals are solid: a 2.2% statewide rental vacancy rate, a heavily renter-occupied population, and the University of Maine next door with a documented on-campus bed shortage. The risk is municipal. Old Town's mill rate rose 9.94% to $19.46 per $1,000 for FY2025-26 after the ND Paper closure, and further increases look likely.
Did the ND Paper mill closure hurt Old Town rents?
Not measurably in the population or occupancy data. Old Town's July 2025 population estimate of 7,589 sits above its 2020 census count of 7,431. The mill's 199 jobs mattered enormously to the families who held them and to the city budget, but Old Town's rental demand has been driven by the university and by a statewide housing shortage, not by mill payroll.
What is the rent increase notice period for an Old Town rental?
Forty-five days written notice under 14 MRSA §6015, extended to 75 days when the increase is 10% or more, or when cumulative increases within a 12-month period reach 10%. Bangor's 60-day requirement comes from a city ordinance and does not apply in Old Town. If a tax-driven increase pushes you past 10%, use the longer notice period.
Does Old Town require landlords to register or inspect rental units?
No. A review of Old Town's municipal code found no rental registration program, no rental inspection program, and no local tenant rights ordinance. Maine state law governs entirely. That is a lighter compliance load than Bangor, where Chapter 282 adds notice, fee, and disclosure obligations on top of state requirements. Verify the current code before relying on this, since municipalities do adopt ordinances.
Where do Old Town eviction cases get filed?
At the Penobscot Judicial Center, 78 Exchange Street in Bangor. Maine handles evictions as Forcible Entry and Detainer actions under Title 14, Chapter 709, heard in the District Court covering the property's location. Expect a 7-day notice to quit for nonpayment, service at least 14 days before the hearing, and a 7-day wait after judgment before a writ of possession issues.
Is Old Town in the Bangor Fair Market Rent area for Section 8?
Yes. Old Town falls inside the Bangor, ME HUD Metro FMR Area along with Orono, Milford, Brewer, Hampden, and the Penobscot Indian Island Reservation. That places it in a higher FMR tier than the rest of Penobscot County. Against Old Town's $989 median gross rent, voucher payment standards can be competitive, so it is worth rerunning the numbers on one and two bedroom units.
If you own rentals in Old Town and want a manager who tracks the mill rate, the UMaine leasing calendar, and the state notice periods so you do not have to, consider us at Bangor Home Rentals. We're a second generation family business managing hundreds of units across Bangor, Brewer, Orono, Old Town, Ellsworth, and more. We'd love to earn your business. You can call us any time at (207) 262-0199 or click here to schedule a free property management consultation.