More than half of the single-family cottages at Lancaster Village have rented for $3,200 to $3,800 a month, according to developer MCO & Assoc. Image courtesy of Joseph Tatone & Associates

Massachusetts suburban housing development is dominated by large single-family homes and mid-rise apartment construction, with little new inventory of modest-sized homes and price tags to match.

High land costs and zoning regulations make it difficult to build the sort of modest homes and duplexes common in many communities during the first half of the 20th century, developers say. Now a series of imminent project is testing the demand for cottage-style living.

In Amesbury, a New Hampshire developer and city officials are preparing a rezoning plan that would clear the way for construction of 789 housing units including 75 duplexes, townhouses and cottages on 33 acres.

In the Worcester County town of Lancaster, residents took occupancy of the first dozen cottages this spring at the 32-unit Lancaster Village. Clustered on a portion of an 18-acre site, the detached single-family homes average 1,300 square feet and are renting for $3,200 to $3,800 a month, said Mark O’Hagan, owner of Harvard-based homebuilder MCO & Assoc.

“It’s relatively expensive for rentals, but it’s something where people are coming in and are looking to stay for a long time,” O’Hagan said. “You’ve got your own space and a different feel than being in one little box in a 36-unit building.”

An Option for Distressed Projects

O’Hagan has specialized in building cottage-style housing for over a decade, and worked out strategies to overcome the obstacles that have prevented its more widespread adoption in the Bay State.

Incompatible zoning, high site acquisition costs and additional project expenses in communities without sewers make clustered cottage developments difficult, developers say.

“The land costs are very high and so most developers scratch their head when they look at what we do and say, ‘Why are you doing that?’” said Dan Gainsborough, founder of Concord-based NOW Communities which has developed cottage-style communities in Concord and at the Devens business park in Harvard. “Their model is to put bigger homes on it and it’s easier to get a return. The tough part is the land costs, and no one is giving it away.”

But the existence of cluster-style zoning and opportunities to acquire distressed properties such as stalled development sites at below-market value can make the financial equation work, Gainsborough said.

Public subsidies also can move projects forward. MassHousing provided $8 million in permanent financing for Lancaster Village, which includes eight homes reserved for households earning a maximum 80 percent of area median income.

A developer and former Planning Board member advocated for the cottage zoning district enabling construction of the Concord Riverwalk project. Photo courtesy of NOW Communities

A Golden Opportunity in Amesbury?

Typically illegal in most suburban zoning districts, cottage-style homes average from 900 to 1,500 square feet and can be clustered up to 15 units per acre, according to Metropolitan Area Planning Council’s “Living Little” report which studied non-traditional housing models to address Massachusetts’ affordability crisis.

Cottage developments first emerged in Massachusetts in the 1930s, as Cape Cod campgrounds were converted into permanent housing. But attempts to encourage the building style’s modern-day growth have met with opposition. In 2017, the Hamilton town meeting voted down a cottage housing bylaw 284-8 after five years of study.

One large-scale experiment in compact housing is unfolding in Amesbury, where the undeveloped 135-acre tract known as “Golden Triangle” has been a focus of local officials’ search for new property tax revenues.

Previous attempts to attract retail development to the site located between Interstates 95 and 495 failed because of cross-border competition from tax-free New Hampshire, Amesbury Mayor Kassandra Gove said.

The conversation shifted to residential development in recent years as housing costs skyrocketed. The median sales price of single-family homes in Amesbury has risen 56 percent since 2019, according to data compiled by The Warren Group, publisher of Banker & Tradesman. In 2023, the median sales price hit $625,000.

In a May 31 filing with the Massachusetts Environmental Policy Act office, Dale Development of Rye, New Hampshire disclosed plans for 284 rental housing units and 91 home ownership units on a 32-acre portion of the 85-acre site.

Developers are proposing eight housing types including a north neighborhood of rentals with buildings up to 29 units. The home ownership neighborhood is proposed on the southern portion of the property, containing 75 attached townhomes, eight duplexes and eight detached cottages.

A ‘Creative’ Solution to Demand

Gove is proposing to rezone the Golden Triangle under the MBTA Communities law. As an adjacent MBTA Community, Amesbury is required to rezone areas to allow by-right construction of 789 multifamily units. The administration will submit the zoning proposal to the City Council this summer.

“We are addressing the housing crisis in a creative way,” Gove said. “It’s called the ‘missing middle’ for a reason: We have the traditional single-family homes, and wedging in these high-density developments on small footprints.”

The proposed zoning eliminates setbacks and frontage requirements to encourage clustered development, Gove said. All of the home ownership units would be 16 to 22 feet wide, according to the project’s MEPA filings.

Amesbury also had applied to have the Golden Triangle designated as a “Smart Growth” district under Chapter 40R, a Massachusetts law that offers communities up to $600,000 per unit for approving high-density multifamily housing. The state Executive Office of Housing and Livable Communities approved the Amesbury district on June 6.

“As a city, we want this to look like it’s always been here and want it to fit in, with a variety of housing opportunities, small footprints, and lots of open space,” Gove said. “We really haven’t been building like this.”

Additional Costs, Unique Lender Requirements

A former Planning Board member in Concord, NOW Communities’ Gainsborough was able to lobby support from town officials and residents for his Concord Riverwalk project completed in 2012. NOW Communities acquired the property through a distressed sale during the Great Recession.

Concord’s approval of a cottage zoning bylaw enabled NOW Communities to build 13 homes on a 3.75-acre site off Main Street known as Concord Riverwalk. Homes initially sold for $600,000 to $700,000, and resales have traded in the $900,000 range in recent years, Gainsborough said.

Construction lenders have unique requirements for cottage-style projects, he said, limiting the number of speculative homes that can be built at one time because of the higher infrastructure costs.

Steve Adams

Higher-density development in outer suburbs is limited by the absence of sewer infrastructure, which adds costs to developers for building on-site shared septic systems or wastewater treatment systems. Under state environmental regulations, developments that generate at least 10,000 gallons of sewage daily are required to build the more expensive treatment plants, so smaller developments below that threshold are more financially viable, said Stephen Cleary of Autonomous CRE+, which is proposing a 144-unit housing project in Sandwich under the Chapter 40B affordable housing law.

O’Hagan’s firm began marketing the cottage rentals in Lancaster in January and the first residents began move-ins in early May. The firm plans to begin construction in 2025 of a similar 44-unit project at 160-164 Pleasant St. in Dunstable, after being selected in a municipal surplus property disposition. The project will be built on an 8-acre portion of a 22-acre undeveloped parcel.

“Lancaster and Dunstable are small towns and a lower-scale product is of interest to them,” O’Hagan said. “If you want to do 200 units you can call AvalonBay or Wood Partners, but this is a size and scale that is really acceptable and exciting to these towns.”

Cottage-Style Housing Fills a Neglected Niche in Suburbia

by Steve Adams time to read: 5 min