The nearly $1 million in state grants awarded to Island towns last week to upgrade their wastewater systems will be a boon for planned affordable housing developments and potentially other large regional projects.

Gov. Maura Healey announced $500,000 in funding for Oak Bluffs and $475,000 for Edgartown on Oct. 25 as part of a $164 million push to boost economic development across Massachusetts.

The Oak Bluffs grant will be put toward the pump station on Edgartown-Vineyard Haven Road near the Vineyard ice arena, aiding the Southern Tier affordable housing development tie into the town sewer. Edgartown’s grant will do similar work for Meshacket Commons, a 36-unit project planned off Meshacket Road.

Patrick Hickey during a recent tour of the Oak Bluffs wastewater treatment facility.

Ray Ewing

Patrick Hickey during a recent tour of the Oak Bluffs wastewater treatment facility.

Ray Ewing

Island Housing Trust has submitted a modified application to the Martha’s Vineyard Commission and the town of Oak Bluffs, both of which had already approved an initial phase of the project earlier this year. 

Meshacket Commons, also being developed by Island Housing Trust, has passed the MVC and received town regulatory approvals.

“This makes a big difference,” said Philippe Jordi, the executive director of the organization. “Costs have just increased tremendously. Anything we can do to mitigate those increases will be important to the projects’ viability.” 

Southern Tier had proposed to bring 60 affordable units to the Island in two phases.

With the expected larger wastewater capacity, the Oak Bluffs project could now be built in a single phase and Island Housing Trust will not need an expensive innovative septic system for the property, Mr. Jordi said.

During the permitting process earlier this year, there were questions about the town’s ability to bolster its sewer system by the time the development was built. A full buildout to 60 units was always going to be dependent on more sewer capacity.

The state grant fast tracks the process and could also help the nearby YMCA, which is planning a major expansion, as well the Island Elderly Housing village that operates with an aging septic system, said Patrick Hickey, the Oak Bluffs wastewater facilities manager.

“It’s really good not just for Oak Bluffs, but for the Island,” Mr. Hickey said. “By them tying to sewer and us getting this grant, it will help keep construction costs down.”

Brian Mackey, the project manager for the proposed YMCA expansion, said a lack of wastewater capacity in Oak Bluffs halted plans to add a new gymnasium, indoor track and other amenities to the Y in 2017.

Until recently, the nonprofit was planning to also buy an innovative septic system to handle the extra wastewater as a result of the expansion.

With the upgraded pump station, the town should be able to handle the larger Y footprint, potentially saving the YMCA about $2.5 million on the septic system, Mr. Mackey said.

The YMCA was scheduled to have its first hearing before the MVC  Thursday on a proposed 39,000-square-foot expansion project.

Gail Barmakian, the chair of the Oak Bluffs wastewater commission, said the driving force behind the wastewater upgrades were to improve environmental conditions in the area. Septic systems, even advanced ones, can be a significant source of nitrogen, hurting the Island’s watershed. 

Getting more wastewater flow and tying these large projects into the town’s sewer system can cut down on the amount of nitrogen going into the ground. 

“It’s all about nitrogen,” Ms. Barmakian said. 

In its new application to the MVC, Southern Tier seeks to move forward with the second phase of development, adding another 15 units to the already approved 10 one-bedroom units, 30 two-bedroom units and five three-bedroom units. There are also some slight changes to trims and other details, said Rich Saltzberg, the MVC’s development of regional impact coordinator. 

“This is not a surprise, the only thing that’s different than anticipated is it’s coming sooner,” Mr. Saltzberg said.