PORTLAND — An affordable housing group received the green light July 19 to construct three houses on Peaks Island.

Home Start was created in 2004 with the goal of developing affordable housing for islanders. It purchased a lot on Luther Street in 2007, following a failed attempt to build affordable housing on a property on Elizabeth Street.

But some islanders objected that the Luther Street project – which needed a contract zone to allow undersized building lots – ignored bigger issues like ferry rates and parking on the mainland, while helping just a few families.

Others said Luther Street was dense enough, and that allowing a contract zone would set a bad precedent.

The Planning Board recommended the project to the City Council May 8. At the meeting Monday night, city attorney Gary Wood said the Peaks Island Council voted in favor of the project in May 2009.

Planning Board Chairman Bill Hall told councilors that the board accepted a lot of comment from the public concerning the project and in the end decided it was a good one.

“We felt it fit into the neighborhood quite nicely,” Hall said.

The Home Start plan divides a 16,250-square-foot lot into three, 5,300-square-foot lots, each with a home. There is already a house on the lot and Home Start has not decided whether it will renovate that house or demolish it and rebuild.

The homes will be offered to families that earn 80 percent to 100 percent of the area median income, so a family of four making between $56,000 and $80,000 would qualify. One of the homes will be offered for sale, one for rent and the other for rent with an option to buy.

Island resident Joe Kane told the City Council that he avoided becoming involved with the Home Start group when it formed because he doubted it would be able to accomplish anything on the island. He said he has since changed his mind.

“The current proposal is quite impressive in all regards,” Kane said.

The City Council voted unanimously, with Councilor Dan Skolnik absent, to approve the contract zone. Councilor Kevin Donoghue, who represents the island, said he was happy with the proposal.

“I support small-lot zoning for affordable housing,” Donoghue said.

Kate Bucklin can be contacted at 781-3661 ext. 106 or kbucklin@theforecaster.net