Development of affordable housing is underway across Lincoln County as new state and local programs offer funding to offset high construction costs in addressing a housing shortage.
A 16-unit affordable development approved for 10 Mills Road in Newcastle is the town’s first in recent years, and waits for state funding amidst some neighbor complaints and a test of the town’s core zoning code.
The project design by developer Rob Nelson, of Newcastle, features two 1,920-square foot, two-story buildings, each containing eight one-bedroom apartments.
“There’s so little (housing) here that we need to do something,” Nelson said. “It basically became apparent that actually, I might have the ability to impact this … it felt like we had to do it if we could.”
Nelson’s apartments would be available to renters making up to 80% percent of the county’s median income for the next 45 years, or $47,750 for a household of one in 2023. This year’s figures would cap one-bedroom rent at $1,278 for one person at the top of that income range, according to a state table.
He said the units will be more like workforce housing than a low-income project.
A housing study by the Lincoln County Regional Planning Commission this May concluded the county needs 900 affordable units added in the next decade to keep housing from growing any more unaffordable. In a per-town analysis, the study suggests Newcastle develop 56 units.
“I’d hate to not do this and build a couple of market-rate houses instead,” Nelson said. “That would feel like not what the community needs.”
The buildings would connect to municipal water and sewer, getting about a third of their energy from onsite solar.
“They’re really designed to look largely like the kind of building stock we have,” Nelson said, noting wood siding, metal roofing, and interior hardwood floors among features. Trees along the road will be kept.
The project’s construction depends on a funding award through MaineHousing’s rural affordable rental housing program, which began offering forgivable loans to developers in 2022. Awards from the current cycle will be announced in January. If the project is funded, Nelson hopes to have the buildings up and inhabited by the end of the next year; if not, he plans to apply again.
He has also applied for funding through the LCRPC, which received American Rescue Plan Act funds from the county’s commissioners earlier this year to offset developer costs for affordable projects.
A similar workforce housing project in Madison was developed by a friend of Nelson’s, and that company, 55 Weston Ave. LLC, would manage the Newcastle site under Nelson’s ownership. KBS Builders Inc. would construct the modular units in South Paris for transport to Newcastle.
Modular construction means less site work and a faster completion schedule, according to Nelson, and developers hope the model could be replicated throughout the state.
The state will not own or manage the buildings and essentially provides mortgage financing through the program.
“My name is attached to it, so I want it to be quality and be an asset to the community,” Nelson said.
Some neighbors of the parcel, which Nelson has owned and left undeveloped for about 15 years, brought extensive concerns about the approval process to municipal meetings and asked the town to rescind its approval of the lot subdivision.
Nelson received planning board approval to subdivide the lot into two parcels Oct. 19. He previously subdivided it several years ago to separate and sell an existing home. The plan for the development itself was approved by the code enforcement officer Dec. 7.
Neighbors Louis Rector and Frank Smith allege an inconsistent lot size, unclear parking designations, inconsistent notice to abutters, and an overall incomplete application made in Nelson’s subdivision packet.
Smith said in early December that he may sell his house because of the project and expects contact with the town may “turn ugly,” suggesting he will seek legal action.
Town Manager Kevin Sutherland said the application they reference was only for the subdivision of the lot, and does not require the majority of that information.
Newcastle’s core zoning code, approved by voters in 2020 to govern development in different districts of the town, classifies the Mills Road proposal in its “small project” category due to the size. As a result, it did not require planning board review or a public hearing.
Projects in this category, or under 10,000 square feet, are reviewed and permitted by the code enforcement officer. The code also does not set a minimum lot area for building projects in the village business district, where the lot is located.
Town attorney Peter Drum reviewed the concerns and said in a letter to residents that all were either “met, waived, or did not apply to the subdivision review process and are thus not a reason to rescind the approval granted to the applicant.”
“This is a perfectly legal purpose under the Newcastle ordinances and the Newcastle Planning Board would have been neglecting their duty to object to the approval,” Drum said in the letter.
Under the code, neighborhood meetings are optional and public notice and hearings aren’t required for small projects.
Nelson said the private driveway will feature parking for 16 cars and that abutter notices were mailed according to the code.
“I care about the community and this is real beneficial to the community,” Nelson said. “I’d like to think that I can answer the concerns of the people who have been speaking out, and I would like to think that they’ll be happy with the project when it’s done.”
He has not heard directly from any concerned residents, and suggested some weaknesses in the core zoning code, which he was involved in developing, may have been revealed. For one, the code requires notices to be mailed to abutters within seven days of the subdivision application being made, not within a range of the public hearing.
“I think it’s really good for the town that I’m the one doing the project and not someone trying to poke holes and get away with something,” Nelson said. “I’ve lived here for almost 20 years and I intend to continue to live here.”