ANNAPOLIS -- Ocean City officials and business leaders asked legislators Friday for state aid in building a 250-room dormitory that would provide low-cost, maintenance-free housing for college students and others seeking summer employment at the resort.

Ocean City is having difficulty attracting enough seasonal workers, and the problem is expected to get much worse unless affordable housing is provided, the officials said.

"We've got a tremendous problem facing us," Paul Wall of Phillips Seafood restaurants told a meeting of Eastern Shore lawmakers.

"Affordable housing has not kept pace with the expansion of Ocean City," Wall said.

The proposed four-story dormitory, which would house two people to a room, would be built about two miles from the Rte. 50 bridge on city-owned land next to the Ocean City airport.

Resort officials would like to see it open in time for the 1989 season. In the meantime, they said, they are working to improve mass transit in the region to alleviate some of the employment crunch.

Residents of the proposed dorm would be charged $800 a person for the four-month season, said Wall, chairman of a committee set up to study the seasonal housing problem. Seasonal rentals now average about $5,000.

Resort officials said at least four other dorms of the same size could be built at the site, raising the total capacity to 2,500.

Ocean City now employs an estimated 8,600 seasonal workers at peak season.

The construction and furnishing of the first dorm would cost about $5 million. That cost includes about $1 million to extend sewer and water lines to the site.

The state is being asked to foot half the cost of the project.

"I think it is a good cause, and a good investment. But that doesn't mean I think the state should necessarily pay for it," said Del. Mark Pilchard, chairman of the Shore delegation.

"It's going to be hard to get additional money for anything this year," Pilchard said. Del. John Ashley said he wondered how the legislature could justify spending money on such a project when "there is not enough money for housing for people who are destitute."

Del. Samuel Q. Johnson said new housing might be less expensive if it were built in municipalities south of Ocean City.

"If you are going to be busing them, 10 or 15 minutes more isn't going to mean anything," he said.

The housing study committee did not look at any sites outside Ocean City, Wall said, and land near the beach was ruled out because of the high cost.

The availability of affordable housing has declined in Ocean City as property owners have converted"We've got a tremendous problem facing us. Affordable housing has not kept pace with the expansion of Ocean City." -- Paul Wall cottages and apartments to more expensive condominiums, which return greater profits.

Many property owners have also been discouraged from renting to seasonal employees because of damage done to the housing, lawmakers were told.

The high cost of housing has forced some seasonal employees to take two and even three jobs just to meet their costs and have some money left over for school.

Taking on more than one job often leads to "burnout" and students leaving before the summer season is over, according to a report presented to the lawmakers.

Architect Harry Kenny, who came up with a preliminary design for the dormitories, said the units would be built to be relatively maintenance-free and damage-resistant.

Ocean City employers would each take a block of rooms and be responsible for guaranteeing the rent, he said.

Resort officials also envision the possibility of having the dorms used in the off-season by students attending colleges on the lower shore.