Eight affordable housing projects that will generate $55 million in spending and create more than 900 jobs are under way or set to begin by summer in southern Maine, a welcome burst of activity in an otherwise sluggish construction season.

The projects, a mix of new construction and renovations, are being built by Portland-based Avesta Housing, a nonprofit corporation that is one of the region’s largest developers of affordable housing.

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Site work has begun in Portland on Oak Street Lofts, a four-story building in the arts district that will have 37 efficiency apartments and a large community space on the ground floor. John Patriquin/Staff Photographer

A total of 255 units will be built from Portland to Kennebunk and Standish. Except for 16 townhouses on Portland’s Munjoy Hill, all will be rental units for residents with below-average incomes. The projects will be energy-efficient, each built to LEED construction standards.

The money for the homes is coming largely from government programs and incentives assembled over the past two years, including state bonds, federal stimulus money and tax credits for developing low-income housing.

Demand for affordable housing is very high. Many Mainers cannot afford to own or rent homes without some form of public subsidy. Despite falling home prices and low interest rates, the high cost of taxes, heat and insurance remain obstacles to ownership, said Dana Totman, Avesta’s chief executive officer.

“We have thousands of people waiting to move into our projects,” he said.

Demand also has been elevated by the real estate bust, and the recognition that owning a home may be too risky for residents with marginal incomes.

“They might be thinking that renting isn’t a bad idea,” Totman said.

The projects are aimed at a variety of potential renters, including families, artists and senior citizens. Construction of two of them — Oak Street Lofts in Portland and Cascade Brook in Saco — is set to begin this week.

Oak Street Lofts, a four-story building in the city’s arts district, will have 37 efficiency apartments and a large community space on the ground floor, which could be used as a gallery. The cost will be $6.4 million.

Cascade Brook is a 30-unit apartment building for seniors in Saco’s Park North subdivision. The cost is $5.5 million.

The other projects are:

• Pearl Place II in Portland. The 54-unit apartment building for families will go up next to Pearl Place, which was built in 2007. The cost: $12.9 million.

• Park Street School in Kennebunk. Thirty apartments for seniors will be developed in a 1920s school building and an addition. The cost: $7.7 million.

• Stonecrest II in Standish. Twenty-five apartments for seniors will be built next to an existing Avesta project. The cost: $3.8 million.

• Emery School in Biddeford. Twenty-four apartments will be in a historic school building downtown. The cost: $6.7 million.

• Adams School in Portland. Sixteen townhouses will be built on the site of a former school building on Munjoy Hill. They will sell for about $200,000 to buyers who meet income guidelines. The cost: $5.6 million.

• Munjoy Commons in Portland. Renovation work is wrapping up on two former school buildings that were turned into housing: 17 family apartments at Shailer School and 22 units at Emerson School.

Construction employment has remained essentially flat over the past year, according to the latest figures compiled by the Associated General Contractors of America. The affordable housing projects will provide welcome jobs for builders, as well as architects, engineers and other professionals who will work on the projects.

Companies that will benefit from the ventures include Wright-Ryan Construction, Landry/French Construction Co., CWS Architects, Gawron Turgeon Architects and PDT Architects. Lenders for the projects include Bangor Savings Bank and Gorham Savings Bank.

“We’re very grateful to have the work,” said David Cook, president of AlliedCook Construction in Scarborough. “The market is very tight.”

AlliedCook plans to have 14 of its workers at the Emery School starting in June. As many as 80 workers are expected to be on site, Cook estimated. His company is completing work now on the Emerson and Shailer apartment renovations.

Publicly funded projects are helping to fill a gap at a time when private financing remains hard to get, Cook said.

“We’ve got projects that could put a lot of people to work if financing could correct itself,” he said.

Contributing to financing on most of the projects is a loan program run by MaineHousing. The state housing authority invests about $30 million a year in rental housing, creating 500 new units, on average. The money comes from bonds secured by the state’s share of a transfer tax on home sales.

“You can’t underestimate the significance of new construction in the economic downturn,” said Dale McCormick, the authority’s director.

Staff Writer Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com

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