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The latter half of the 1990's saw the nation's wealth expand as in no other time. The stock market hit record highs as investing itself changed shape; no longer was the market a mysterious puzzle known only to those in the business. Until the latter 1990's the stock market was traditionally thought of as the realm of brokers, analysts, investment bankers and the very wealthy. But as the stock market begin to rise, and the potential for wealth became more obvious, everyone from the grandmother down the street to middle school students were learning about the market and diving in to try and make money. The internet helped widen the investment circle as well, as more information became available more easily to the public, investing was made child's play by online brokerage houses. The "dotcom" frenzy hit the nation and stocks and the stock market became sexy; everyone was investing, and money was being made. As this unprecedented wealth hit the nation, Americans were eager to spend. Throughout 1999 and into the new millennium, Americans were outspending their earnings as they had in no other time in history and the savings rate in America dropped dramatically. The low-point of this trend came in May of 1999, when the savings rate hit a historical low of -1.2%; it was the sixth consecutive month of 1999 that the savings index had been negative. Although the rate had risen slightly by the end of the twentieth century, December's 1.5% rate was still the lowest ever recorded for that month. American earnings for the month rose 3%, but spending had jumped to 8%, a ratio that was indicative of the entire year. As the stock market continues to stay strong in the first half of the new year, there is no expectation that the trend will reverse. Americans continue to feel confident about their present and future financial security as they watch the stock market and see their portfolios grow. New wealth was reinvested in the market, or spent on luxuries and larger homes. One popular investment was the second home (or third, or fourth), a place simply to retreat or spend summers. Popular among locations to invest in that second home was Maine, with miles of shoreline, amazing views, and a reputation for being a state that is relaxed and peaceful. Prices for Maine's shoreline real estate rose along with prices across the nation, but by comparison, many Maine properties were still a bargain. Encouraging investment in second homes were interest rates that were at a twenty year low at the end of the twentieth century; not only was there money available to buy homes, but financing them cost less than ever. As more and more people came to Maine to look for a home by the water, with money available to pay dearly, or outbid other buyers for waterfront homes, prices rose to and beyond the million dollar mark for properties that had previously been valued at less than half that cost. Some older shoreline properties were being bought at a premium, then torn down to make way for new, larger homes, which would keep the assessed value and property taxes high. The effect of these rising shoreline prices on property taxes began to be seen in 1999, and had an outreaching effect not only on neighboring residential property, but also on working waterfront property that shared the shoreline. Because the properties themselves were similar, the sale prices of the surrounding residential properties had to be taken into account when calculating the property taxes on the commercial property under the system by which Maine property taxes are calculated. Part II of this Article will examine the administration of the property tax system of Maine, exemptions to the general property tax, and the current proposal for another exemption. The effectiveness of the current exemptions, as well as the usefulness of the proposed exemption in fulfilling its goals will also be examined. Part III will analyze the history of zoning in the United States, as well as the Federal and State of Maine coastal regulation schemes. Next, this Article will focus on Portland, Maine, and the use of zoning there to preserve the waterfront for water dependent uses. Last, this Article will examine the current situation in Portland, Maine, new developments on the waterfront, and recommendations for battling the new pressures in Portland that are working against the working waterfront.



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