CUMBERLAND — The overheated rental housing market in Portland is fueling demand for new apartment construction that is now spilling into communities north of the city.

Two projects with a combined total of nearly 130 market-rate apartments are pending in Cumberland, an affluent coastal community dominated by single-family homes. In neighboring Falmouth, the owner of the Foreside Estates complex has floated an expansion that would add 72 high-end apartments in three new buildings.

The projects come as hundreds of apartment units are being developed in Portland and other projects are coming on line in Cape Elizabeth and Westbrook. Housing construction in the region is rebounding from the recession and developers are trying to catch up to the demand for apartments. A 2016 report from the U.S. Department of Housing and Urban Development estimated York, Cumberland and Sagadahoc counties would have demand for 2,000 new rental units in the next three years.

“I think the region has become so popular and Falmouth, Cumberland, Yarmouth are starting to feel it,” said James Schmidt, a consultant working with Grun Development on a 20-unit development on Route 100 in Cumberland. “I think that particularly the Route 100 corridor, there is a fair amount of undeveloped land there. It is pretty primed for development.”

Rental demand in Portland has outstripped available units, driven by national demographic trends among millennials and baby boomers who opt to rent instead of buy and want to live near urban centers. The city’s national reputation for high quality of life and its number of amenities have drawn new, high-income renters and sent apartment costs skyrocketing.

NOTHING LOW-RENT IN CUMBERLAND

According to the U.S. Census Bureau, almost 90 percent of residences in Cumberland are owner-occupied. There are fewer than 20 market-rate apartments in town that are not reserved for senior or low-income residents, according to Town Planner Carla Nixon. In its 2009 comprehensive plan, the town emphasized the need for affordable housing for young people unable to buy a home, older residents looking to downsize, or other people who want to live in Cumberland but don’t want to buy a house, Nixon said.

“If you don’t want a single-family home, you are out of luck,” she said.

Those are the same demographics developer Loni Graiver is going after.

Graiver is working on the Cumberland Foreside Village Apartments project, which will include 96 one- and two-bedroom apartments in eight 12-unit buildings off Route 1. Favorable lending conditions, a good location and high demand were factors that encouraged him to develop the project, Graiver said.

The property was first slated for single-family homes, but a contract zone amendment approved by the Town Council in April allowed the apartment development as long as 20 percent of the apartments were reserved for people age 55 and older.

“I think there will be an overflow from the Portland market, but there are people who want to specifically live in Cumberland for one reason or another,” Graiver said. “People want to live there, but can’t find a place they can afford. That has put a lot of people in a rental situation.”

The apartment complex will be sited next to a subdivision where homes are selling for between $350,000 and $400,000, Graiver said. Monthly rent at the complex will run from $1,250 to $1,550, with heat included, according to Graiver. If the project is approved by the planning board this summer, units could be ready to rent by March 2017, he said.

The rental housing project hasn’t been embraced by everyone.

Town officials have welcomed new apartments in Cumberland, but Town Councilor Shirley Storey-King is opposed to the proposal. Storey-King, who lives directly across Interstate 295 from the development, is concerned the property doesn’t have enough space, could have problems with stormwater runoff and will tax town services and schools. She also worries that buildings will be an eyesore from the interstate and Middle Road.

“I don’t think this kind of development is right for Cumberland,” Storey-King said.

CONSTRUCTION CONFLICTS

Housing construction has triggered conflicts in other area communities. Portland has had recurring political clashes about developments changing the face of the city. In Cape Elizabeth, neighbors complained that a 10-unit complex could create safety problems and bring down property values, and Westbrook residents have turned out in force to oppose a massive 500-unit housing development because of fears it would bring too many people – including school-aged children – into the city.

Graiver argues that the proposed Cumberland buildings will be tucked off in an unobtrusive area between Route 1 and I-295 and won’t create problems for neighbors.

“If being able to see any project was the threshold for building or not building, we would never build anything,” Graiver said. “I don’t know if there is anything I can do to satisfy someone who just doesn’t want apartments in Cumberland.”

The smaller Route 100 project is sited at the former Allen Farm Country Store, which will be torn down to make way for the new buildings. The project may go before the planning board in the next two months and developer Migs Eaton wants to start construction by the end of the summer. Eaton is currently redesigning the project to put the apartment complex entrance onto Route 100, after a proposed entrance onto Tammy Lane was opposed by residents.

The 20 two-bedroom units will be marketed for $1,500 to $1,800 a month without utilities, Eaton said. The development also includes a 9,000-square-foot retail building and a 13,000-square-foot manufacturing facility that has already been approved by the planning board.

Cumberland is attractive to tenants because it provides easy access to Portland, which is about 20 minutes away from the proposed development, and has a reputation for a high standard of living and good schools, Eaton said. “People I have interviewed are coming from all different areas,” she said.

Cumberland isn’t the only northern suburb talking about rental housing.

Yarmouth is considering changing its codes to make it easier to develop multifamily residences on Main Street and the Village District, said Alex Jaegerman, director of planning and development.

In Falmouth, Princeton Properties, a property company headquartered in Lowell, Massachusetts, has proposed adding 72 apartments to the existing 170-unit Foreside Estates complex off Route 1, a project that will require a zoning amendment from the Town Council. The council also is considering a package of zoning changes that would facilitate the development of multifamily buildings in the town’s growth areas, said senior planner Ethan Croce.

Daniel Endyke, a senior vice president for Princeton Properties, said the new units would rent for more than $2,000 a month without utilities and his company hopes to start construction next year. Foreside Estates has had a 95 percent occupancy rate in the past few years, he added. Falmouth officials encourage the proposal and current demand for apartments makes the project worthwhile, he said.

“I think, certainly, the economics work today. They did not three or four years ago,” Endyke said.

“The real estate cycle is just that,” he said. “You try to catch it right, and we hope we are.”

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