Avesta Housing is planning to build a new, $5.5 million, 31-unit affordable housing project for older residents in Scarborough, which proponents say is needed in a tight housing market.

The project is proposed for a .44-acre parcel at 246 Route 1, just behind the former public safety building the town vacated and sold last year. Nathaniel Howes, development officer for Avesta, said the nonprofit bought the land from another developer last fall. Last week, Howes said, the Town Council approved a tax credit for the project that is paving the way for construction to begin in spring 2022.

According to town documents, the tax credit is part of the Downtown district, which has given credits to a number of developments, including projects on the 600-acre Downs property. The credit amounts to 75% over the next 20 years, or $555,440, according to the documents.