Cape Elizabeth Approves First All-Affordable Housing Project in Decades

Cape Elizabeth has officially cleared the way for a new mixed-use development that will bring 18 affordable apartments to a community where the median price of a single-family home is approaching $1 million.

The project, known as Cape Commons, will be built on a long-vacant lot at 316 Ocean House Road, next to Town Hall. Portland-based GreenMars Real Estate Services plans to construct a roughly 15,000-square-foot building with two commercial spaces on the first floor and 18 apartments across the upper two floors. The Cape Elizabeth Planning Board approved the project unanimously in August, and the appeal period ended without a challenge, giving the developer the green light to proceed.

The apartments will include studios as well as one- and two-bedroom units, and all will be reserved for households earning no more than 80% of the area median income. According to the developer, the project will be the first development consisting entirely of affordable housing built in Cape Elizabeth since the 1970s.

That makes the project particularly significant in a town known for expensive real estate and limited housing options. The median sale price for a single-family home in Cape Elizabeth was nearly $950,000 as of August, according to Redfin. For residents who work in the community but cannot afford to purchase a home there, the new apartments could provide another way to remain close to their jobs, schools and local services.

The need extends beyond traditional low-income housing. The developer said it has heard from teachers, firefighters and other local workers who struggle to find housing at a price they can afford. Some existing residents have also expressed interest in downsizing from larger homes but have found few smaller, reasonably priced options within the town.

Cape Elizabeth has had an inclusionary zoning ordinance since 1992 requiring certain larger residential developments to include affordable units. But according to town officials, that policy has resulted in only 16 existing affordable units over more than three decades. The new development would therefore more than double the town's existing supply of such housing in a single project.

Cape Commons is also intended to do more than add apartments. The first floor will contain approximately 2,000 square feet of commercial space, with the developer hoping to attract a restaurant, cafe or other small business. The project will also include six live-work units designed for residents who want to operate a small business or studio from their homes.

The location is another important part of the project. The property has been vacant for more than two decades and was previously occupied by a gas station. Once completed, residents will be within walking distance of a grocery store, cafes, the library and schools, while the development itself will help add activity to the town's village center.

The project also reflects a broader challenge facing Maine: creating housing in communities where land is expensive and development opportunities are limited. State officials have identified a need for at least 76,400 additional homes by 2030, particularly in areas such as the greater Portland region where housing demand is strong.

GreenMars expects construction to begin next year, although a completion date has not yet been established. For Cape Elizabeth, the project represents the redevelopment of a long-underused property while adding housing aimed at people who might otherwise struggle to afford living in the community.

The larger significance may be that an expensive coastal town is adding an entirely affordable housing development in its village center. If Cape Commons moves from approval to construction as planned, it will add new housing while also putting a vacant parcel back into productive use — a combination that communities across Maine are increasingly looking for as the state's housing shortage continues.