Two community groups that have collaborated on past projects are again working together to address housing needs for homeless people in Portland.

This time, however, they are taking a long-term approach.

Avesta Housing and Preble Street are teaming up on a plan to create “site-based Housing First permanent Housing” at the former Oxford Street Shelter, with 30 to 50 apartments and on-site support services for chronically homeless people.

The project’s goal is to maintain services for the unhoused community in Portland’s Bayside neighborhood on a more permanent basis rather than in a shelter designed to be temporary.

“It feels very sweet to think of a future where that site will be really a more long-term solution focused in providing people permanent housing, their own homes,” Preble Street Executive Director Mark Swann said in an interview Monday. “They’re not going to have to get up at seven in the morning, grab their backpack and survive on the street for the day.”

In what could be the first project supported by the state’s new Housing First fund, Avesta and Preble Street also want the Oxford Street project to be a model for the rest of the state.

Avesta, which already manages more than 1,000 homes at 25 sites across Portland, has secured an option agreement to purchase the former shelter site from current owner Reveler Development. Avesta would own and operate the property, while Preble Street would provide services, including access to social workers, behavioral health treatment and general medical treatment.

Rebecca Hatfield, Avesta’s president and CEO, hopes to break ground in 2025 and have the shelter ready for residents by 2027 – though that timeline could change depending on how long it takes to receive needed approvals and funding.

The Oxford Street proposal isn’t Preble Street and Avesta’s first project together. They’ve been collaborating on this work for almost 20 years, with three other housing first properties across Portland – Logan Place, Florence House, and Huston Commons. These models offer no-barrier housing, where tenants don’t need to qualify for leases or leave after a certain amount of time.

Avesta and Preble Street are, however, also entering uncharted territory. It could be the first project to receive funding under the state’s new Housing First program, which was passed by lawmakers this year and included in the governor’s supplemental budget.

Housing First was a top priority for Gov. Janet Mills and legislative Democrats during the past session. A bill to create a statewide program was approved by lawmakers and then included as part of the supplemental budget that passed this summer.

Funding for the program comes from a portion of real estate transfer tax revenue and is expected to be between $7 million and $8 million annually. The funding is not expected to be available until 2025, but when it is, MaineHousing will help decide which projects receive grants.

“The service funding has been the biggest challenge and why we’ve not been able to do more,” Swann said. “This new program allows for a place like Preble Street or another social service agency in Maine to find a steady, consistent, sustainable funding stream, which we’ve never had before.”

It costs around $800,000 a year for Preble Street and Avesta to run a project with 30 apartments and round-the-clock services.

Preble Street and Avesta did not offer specifics about how much they hope to get from MaineHousing, the estimated cost of construction or what other grants and funding will fill remaining budget gaps.

The Oxford Street housing first units would likely be ready for tenants amid a period of change in the Bayside neighborhood’s history. There are a handful of proposals that could transform the area, including a project to create 804 residential units, 201 of which would be affordable, across seven new apartment buildings and with two parks on site.

Amid the potential for all this change, there are some concerns.

Sarah Michniewicz, president of the Bayside Neighborhood Association, said she believes people experiencing chronic homelessness would be better served with transitional housing that should “continually move new people into a better situation” in an area that is removed from nearby “chaos of all kinds.”

“It’s an area where a lot of really struggling people have intentionally gathered for decades,” Michniewicz said. “My experience, both in seeing and talking to people in that situation, is that it’s harder to resolve those issues when they’re still right outside your door.”

She also worries about Bayside continuing to be “the default (place) to put struggling folks.” But Michniewicz hopes that open communication and respect between Preble Street, Avesta and neighboring residents can make for a mutually supportive system.

Once the development is built, Swann and Hatfield hope it can help meet the various and complex needs of chronically homeless people in Portland, such as offering on-site services from social workers at all times. But they also believe the Oxford Street project can also go a step farther.

“They are entering, in many cases, a very new experience for them, being in this community, and then being given those supports and the kindness and the compassion and time to do ‘well,’ whatever doing ‘well’ means for them,” Swann said. “It’s important to be settled in a permanent home, surrounded by people who are invested in your success and there for you. They need an opportunity – and not just being directed and told what to do to improve their situation – to be given options and a chance to thrive.”

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