A rendering of the affordable housing project set for 16 Mills Road in Newcastle. (Photo courtesy Rob Nelson)
Newcastle will soon gain 16 new affordable apartments in the downtown area as part of MaineHousing’s Rural Affordable Rental Housing Program. A groundbreaking event will be held at 16 Mills Road in Newcastle, the first project of the program’s second round to start construction, at 11 a.m. on Monday, Oct. 28.
Almost 20 years ago a big box store was proposed for Damariscotta. In response, Newcastle, Damariscotta, and other surrounding towns voted on zoning changes to keep big box stores out of their towns. The experience highlighted the need for planning and for the towns to figure out what community members want the future to look like.
The town of Newcastle started a process to update its comprehensive plan and zoning code more than 10 years ago. That process involved the largest public planning effort in the history of Newcastle, resulting in a new comprehensive plan in 2018, and a new form-based zoning code in 2020.
The combined effort gave the town tools to guide development in ways that are beneficial to the town as a whole – to encourage what we want, and discourage development that is harmful.
“The intent was to create a regulatory framework that reflects the values of our small New England town, which streamlines application and permitting processes, and encourages appropriate development across a range of geographic areas,” Ben Frey, chair of the Newcastle Planning Board, said. “This intent has been both realized and validated by the projects since its adoption.”
One of the changes the new code made was to allow greater density of housing in the village area to address the need for more housing. This change was well timed. In 2023 the state of Maine released a study showing, as can be felt across Maine, that there is a growing housing crisis, with more than 75,000 housing units needed by the end of the decade.
That same year, Lincoln County released an assessment showing a need for more than 1,300 housing units in the county over the next decade, including almost 900 affordable units.
In response to the need for more affordable housing in rural areas the Maine State Housing Authority, or MaineHousing, created a program to finance the development of affordable rental units in rural Maine towns. With support from the governor, the Legislature has funded the program for a second year providing critical financing for projects in rural Maine communities experience acute housing needs.
Rob Nelson, of 16 Mills Road Newcastle LLC, saw an opportunity to address the growing housing need while helping realize the goals of the town. He brought forward a project to build 16 one-bedroom apartments on Mills Road in Newcastle, located within walking distance of Newcastle’s village center.
The project includes two eight-unit buildings set close to the street, with front porches and parking off to the side. A row of classic and locally loved street trees is maintained along the front of the lot. The buildings will be energy efficient with electric heat pumps, solar arrays on the rooftops, and Timber HP wood-fiber insulation manufactured in Madison.
The buildings were designed based on historical models to fit into the community and use quality materials and finishes such as hardwood flooring to create comfortable, durable and aesthetically pleasing homes.
The project was approved by the town in October 2023 and won a competitive process for financing from the MaineHousing Affordable Rural Rental Program in March.
“Developments like 16 Mills Road Newcastle are exactly what was intended when the Rural Affordable Rental Housing Program was created,” said MaineHousing Development Director Mark Wiesendanger. “Adding more affordable, middle-income, housing with our partners in smaller cities and towns is an essential piece of expanding housing opportunities statewide and supporting local businesses. 16 Mills Road Newcastle is another example of what can be done when local players work together to create housing opportunities as we accelerate the production of affordable homes for all Mainers.”
In a similar fashion to the state, Lincoln County responded to the need identified by their assessment.
“In June 2023, the Newcastle Affordable Housing Project Under Way Lincoln County Commissioners allocated $1.5 million of the County’s American Rescue Plan Act funds to assist municipalities, housing nonprofits, and developers to increase the amount of affordable units in Lincoln County,” Emily Rabbe, executive director of the Lincoln County Regional Planning Commission, said. “This funding was awarded to five projects across Lincoln County, including the Mills Road project. When completed these projects will add over 220 affordable units to the county’s housing stock.”
Under the MaineHousing program, the project guarantees that the rents will remain affordable for 45 years, and will be restricted to residents earning 80% of area median income or less. The 16 Mills Road project will result in 16 units of affordable housing that will fill a local need for homes for employees of local businesses and downsizing seniors who want to remain in the community.
“It’s difficult to retain the employees that we have when affordable housing is so limited,” said Pete Erskine, owner of Newcastle-based Mexicali Blues. “And as many other businesses in the same situation, we are trying to hire for multiple positions within our company. When people are interested in both our open positions as well as moving to the area there are no realistic options for housing. That’s one big reason that these positions are still open.”
The project follows the model created by the partners of 55 Weston Avenue LLC, Brian Eng, Sam Hight, and Kara Wilbur, who successfully built a similar project with MaineHousing support in Madison. Both projects are built using modular construction, with buildings provided by Dooryard, a Maine-based modular dealer, and built off-site at KBS Builders Inc., a modular manufacturer based out of South Paris. Technical support was provide by The Genesis Community Loan Fund.
“I am excited to be able to build this desperately needed housing in Newcastle,” Nelson said. “This project would not have been possible without 20 years of local planning efforts, innovative state programs enabled by the governor and Legislature, and private development efforts. It’s gratifying to realize this first step in solving the affordable housing crisis and to see planning and policy come together to achieve our goals.”
