WELLFLEET — The nearly two-decade-long delay, caused by abutters’ lawsuits, of an affordable housing development at 120 Paine Hollow Road just got longer.

Developer Ted Malone received word from Assistant Town Administrator Rebecca Roughley on May 31 that the project would be delayed another year, this time because the town had to withdraw an application for predevelopment funding from the state. Roughley cited competing applications with the 95 Lawrence Road project and a lack of staff to administer the grant, according to Malone.

Malone’s plans to build eight units on the five-acre site were opposed by neighbors after the town selected his company, Community Housing Resource, to develop the site for affordable housing in 2006. Abutters first appealed an order of conditions from the conservation commission that year, arguing that wastewater from the units would contaminate their wells.

The Dept. of Environmental Protection sided with the conservation commission, and the abutters lost the case in 2008 after further appeals. By that time, economic conditions created by the Great Recession made development impossible.

Malone began again in 2017 with a new proposal for the project under the state’s Chapter 40B, which allows zoning boards to streamline review in communities where affordable housing inventory is less than 10 percent of total housing stock. Wellfleet is at 2.5 percent.

After slight changes to the plan that included reducing the slope of the development’s driveway from 15 to 12 percent at the behest of abutters and Fire Chief Richard Pauley, the board granted Malone a comprehensive permit. Abutters then sued the zoning board.

A four-year court battle ended in 2021 with a settlement that required Malone to undertake extensive infrastructure work on the property. That included further reducing the slope of the driveway to 10 percent, which required Malone to lengthen the driveway. The agreement also included the relocation of a septic system and one of the two buildings and the installation of fencing between the development and neighboring properties.

“The redesign from the settlement with abutters requires a significant amount of site work, adding to the costs,” Malone said. He said that he had received $175,000 in Community Preservation Act funds for predevelopment site work, but the costs will be much higher than that. “The only way to make it financially feasible is to have the town access further funding sources,” Malone said.

The town’s application for the project through the MassWorks Infrastructure Program would have requested an additional $822,000, Malone said. But because Wellfleet is also pursuing funds for wastewater treatment at the 95 Lawrence Road project, Roughley told Malone it would not be possible to apply for both projects.

“I received an email saying that Lawrence Road was a priority, and Paine Hollow would have to wait,” Malone said. “I can see the rationale, since there will be more units there,” he added.

The deadline for the application was June 2. Malone will have to wait until next year for the town to apply again, and he can’t proceed with seeking development funds until he has secured funding for the infrastructure work.

Competition between local projects poses a unique challenge for affordable housing development on Cape Cod, said housing authority Chair Elaine McIlroy. “Because we have all these projects going on, unfortunately there will be competition,” she said. “A smaller project like Paine Hollow is going to be more challenged to get funding than bigger projects.”

There is also a lot of regional competition, said Jay Coburn, CEO of the Community Development Partnership, which is partnering with Preservation of Affordable Housing to develop the 46 units at 95 Lawrence Road. That project was recently passed over for state funding from the Dept. of Housing and Community Development.

“The state is under great pressure to fund projects throughout the Commonwealth,” Coburn told the Wellfleet Select Board on June 6. The DHCD received over 100 requests in its most recent funding round, Coburn said; only 20 to 30 projects typically receive funding.

Roughley also stated in her email to Malone that Wellfleet’s staffing shortage would make it difficult to administer the grant. Roughley, who is the town’s procurement officer, has resigned as of the end of June.

“It’s unfortunate that we finally cleared a very long and drawn-out court process only for the project to be delayed due to our staffing issues,” said select board Chair Ryan Curley. “This project has been snake-bitten with delays.”

Malone was more optimistic: “I’m not too worried about the delay,” he said. “The town is going through hard times, and it has to make hard decisions.”

Roughley’s resignation precipitated the withdrawal of an RFP for a master plan for housing at Maurice’s Campground. And the housing authority decided not to issue an RFP for the construction of a single-family affordable home at 90 Freeman Ave. after Roughley announced her resignation.

“We were really close to issuing that RFP, but now that we don’t have a contracting officer, it’s on hold,” said housing authority member Gary Sorkin.

That RFP was a couple of years in the making, said McIlroy, but without a procurement officer, “we can’t really advance the project at this time.”

There are still houses on the horizon, McIlroy said. Habitat for Humanity will begin construction in September on four single-family affordable houses on a 3-acre site on Old King’s Highway.

“Affordable housing is a slow process,” McIlroy said. “The delays are just par for the course.”