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More than 550 asylum seekers have arrived in the city since January.
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The Immigrant Legal Advocacy Project said the rule amounts to a ban on asylum.
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Immigration lawyers and advocates said the fundamental problem is an immigration court system that is nearly impossible to navigate without a lawyer.
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Aid groups and municipal agencies have been warning of the potential for mass evictions when a federal rental assistance program expires at the end of December.
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Hundreds of asylum-seeking families currently rely on the federal Emergency Rental Assistance program, which is set to expire at the end of the month. Aid groups say that asylum-seekers are at a particular disadvantage because, under U.S. immigration law, they are not allowed to work in the U.S. until six months after they file their asylum case.
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City officials called on the state to coordinate asylum seeker resettlement efforts across municipalities.
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The nonprofit developer received more than 1000 applications for the new units.
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Former Republican Gov. Paul LePage has attempted to soften his stance toward immigrants. But his statements have been inconsistent and sometimes contradictory as he balances the desires of his base of supporters with those who view asylum seekers as vital to the state economy.
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The Council aims to raise $1.5 million to support construction projects.
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The event highlighted the stories and cultural contributions of Maine's immigrant communities.