In Scarborough, owning a lot and having the money to build on it doesn't guarantee you can build a house. According to the Town Council's August 19 action, apart from a short list of exemptions, every new home needs a growth permit from the town. On August 19, 2026, the Town Council voted 7–0 to set this year's supply: 20 permits for the rural and low-density residential zones, covering July 1, 2026 through June 30, 2027. The Downs got 150 for the same year.
That split shapes Scarborough's new-construction market more than any median price. It decides where new homes can go up, what size they tend to be, and how long a buyer may wait for a house on land they already own.
The Town Divided Into Three Allocations
Under Chapter 413, the Rate of Growth Ordinance, each new home is counted against one of three areas plus a town-wide affordable pool. Area 1 covers the rural and low-to-moderate density zones: R-F, R-F-M, R-2, R-3, R-4, R-4A, and the Running Hill–Gorham Road districts. Area 2 covers the town and village center zones, plus districts such as B-3, Haigis Parkway, and Traditional Neighborhood Design. Area 3 is a single zoning district, the Crossroads Planned Development, better known as The Downs.
Here's how the allocation compares with the last cycle:
| Allocation | 2023–26 cycle, three years | FY2027, one year |
|---|---|---|
| Area 1, rural and residential zones | 75 | 20 |
| Area 2, town and village zones | 210 | 25 |
| Area 3, The Downs | 400 | 150 |
| Affordable, town-wide | 100 | 22 |
| Total | 785 | 217 |
The total wasn't arbitrary. The town staff report says state law already required the cap to allow at least 105% of the average number of permits issued over the past ten years. Town staff put that ten-year average at 206 units through 2025, not counting affordable housing, which makes the minimum 217. So the council's real decision was how to split those 217 permits, and it sent most of them to one district.
Area 1 Has Run Out Before Spring for Two Years
The tightness in Area 1 shows up clearly in the town's records. The planning department's annual report, dated June 3, 2026, says Area 1 permits were used up in April 2024 and again in April 2025. In fiscal 2025, which started in July 2024, 12 of the year's 25 permits went out in July alone. By May 22, 2026, the three-year cycle had used 70 of 75 Area 1 permits, leaving five.
Running out matters because of how permits are handed out. They're issued first-come, first-served, by the date a site plan is approved or a complete building permit application is accepted. Once an area's permits are gone, the ordinance says no more growth permits are issued and no more building permit applications are accepted until permits become available again. Unused permits expire at the end of the year and don't carry over.
In practice, someone who buys a vacant Area 1 lot in October may be competing for permits that were mostly claimed in July.
One Subdivision Is Bigger Than a Year's Supply
Elmwood Meadows shows the squeeze clearly. It's a proposed 23-lot conservation subdivision on about 16.8 acres at 19 Elmwood Avenue, filed by NLM Enterprises, LLC, with Sebago Technics as engineer. The Planning Board gave it preliminary approval on December 15, 2025, by a 4–1 vote. Town staff noted at the time that it would need 23 Area 1 permits when the annual allocation was 25.
The first-reading version gave Area 1 25 permits for FY2027. At the July 15 public hearing and second reading, the council adopted an amendment that would have cut that to 15, then tabled the vote. On August 19, it moved five permits from Area 2 to Area 1, landing at 20, "to accommodate the approved Elmwood subdivision in Area 1." Even at 20, the whole area's yearly supply is smaller than one subdivision. The ordinance also limits any single development to 50% of Area 1's permits. Only in the last three months of the year do the remaining permits open up without that limit.
That limit protects people building one house at a time, since one developer can't take the whole year's supply. It also means a buyer of a home in a new Area 1 subdivision should expect that the homes may come in phases over more than one year.
The Downs Had Permits Left Over and Still Got More
Area 3 tells the opposite story. Over 2023–26, The Downs used 274 of its 400 permits, and none were drawn in fiscal 2026. The projects that did draw permits include The Parker with 60 units, Cross Street Condos with 96, and a Lot 2 Town Center mixed-use building with 76 approved by site plan in May 2025. The report also lists a 42-unit Lot 1 mixed-use site plan that predates the ordinance and was not yet permitted.
At the council's July 15 hearing, Dan Bacon of Crossroads Holdings said the 126 unused permits reflected developers planning around future allocations. He argued that three-year allocations are essential for planning and financing large projects and asked for more permits for the coming year. The final number for The Downs, 150, was higher than the 125 approved at first reading.
Not everyone agreed. At the August 19 meeting, a speaker questioned whether the process was fair. The speaker said one developer's preference shouldn't shape the ordinance and that other developers hadn't been consulted. A separate speaker had pointed to the affordable-housing side in July, saying only three affordable units were built in Area 3 during the 2023–26 cycle.
The scale explains the council's lean. Mainebiz reported on July 15, 2026 that The Downs had 700 homes built, including 96 luxury condominiums, with another 800 units on the drawing board under M&R Development. In May 2026, Cross Street Condos was advertising move-in-ready options with a $5,000 builder-paid incentive. That was a spring promotion, so check current terms before counting on it.
What the Split Means for Home Size
The permit records also show what kind of homes are being built where. Of the 274 Area 3 permits used in 2023–26, only 10 were for homes with three or more bedrooms. Area 2 is capped at 35% for homes with three or more bedrooms, and by May 22, 2026 it had used 62 of its 74 permits in that category. Its recent approvals were apartments: Oak Hill with 16 units in March 2026 and Pageside Heights with 24 units in April 2026.
For newly built homes with three or more bedrooms in Scarborough, these records point to Area 1, the area with the fewest permits. The town's most plentiful new construction, at The Downs, has so far been mostly smaller units.
The supply has also swung from year to year. Town figures show 284 new residential units in calendar 2024 and 106 in 2025. Big Downs projects that draw permits in a single batch account for much of that swing.
Questions to Settle Before Buying a Lot or a Pre-Construction Home
Each of these comes straight from how Chapter 413 works:
- Which area is the lot in? That depends on the zoning district, and it decides which pool of permits you draw from.
- Has a growth permit already been issued for this specific lot? Permits are tied to a lot and pass to a new owner once the Code Enforcement Officer gets written notice of the sale. A pending application does not transfer.
- When does that permit expire? A growth permit expires when the building permit or site plan approval expires, whichever comes first.
- For a subdivision home, how is the builder spreading permits across years? The 50% limit in Area 1 makes this a scheduling question as much as a construction one.
- Does an exemption apply? The ordinance exempts accessory dwelling units, repair or rebuilding of an existing home, one home per person on a family gift lot, and units in a contract zone whose agreement grants an exemption. Once an area's permits run out, the Code Enforcement Officer may also issue up to five building permits a year for detached single-family homes on lots outside subdivisions.
Town staff and the Code Enforcement Officer make the final call on each of these. Get answers in writing as part of your due diligence. This is general information, not legal advice.
July 2027 Is the Next Reset
The town called FY2027 an interim year because LD 1829 and its fix bill, LD 2173, change the rules for municipalities starting July 1, 2027. Under the law as enacted April 16, 2026, a cap inside a designated growth area must allow at least 105% of the ten-year average, add affordable permits equal to at least 10% of that figure on top, and allow any single project or common scheme at least 35% of the area's allocation. The same section lets towns limit growth outside designated growth areas. The full text is posted by the Maine Legislature.
Next year, the 35% per-project floor would apply to growth-area allocations like those for the village zones and The Downs. How Scarborough classifies its rural and limited-growth zones in the rewrite will decide whether Area 1 stays this tight. The council's next allocation is the document to watch.
Frequently Asked Questions
Does buying an existing Scarborough home involve a growth permit? No. The ordinance applies to new homes. Repairing, replacing, rebuilding, or altering an existing home is exempt.
Can I add an accessory dwelling unit without a growth permit? Yes. Accessory dwelling units as defined in the zoning ordinance are exempt.
Where can I check how many permits are left? The Code Enforcement Officer keeps a public list of permits issued and exemptions granted, and the town's Rate of Growth Ordinance page is the place to start. That page still lists the 2023–26 term, so check the council's August 19, 2026 action for the current numbers.
If you're comparing a lot in Scarborough's rural zones with a new home at The Downs, or trying to find out whether a parcel already has its permit, Sandra Wendland can help you check the permit status and timing before you commit. Her new-construction experience is outlined on the developments page, and the Scarborough neighborhood guide covers the rest of town. Schedule a consultation to go over a specific lot or pre-construction contract.
