A nonprofit Hawai'i corporation wants to build more than 300 affordable rental housing units on state land in Pearl City for low-income seniors and families.

The Coalition for Specialized Housing is proposing to develop four seven-story buildings on 4.7 acres in lower Pearl City that would create about 332 housing units. Construction of the four residential buildings is expected to cost $60 million.

The project, called Hale Mohalu II, would have one- to three-bedroom units with monthly rents ranging from $401 to $850. The first building could be completed at the end of 2009.

The project, which is pending necessary permits and financing, could be a welcome — albeit small — step in addressing the lack of affordable housing, which has become one of the state's most critical issues.

Skyrocketing home prices and higher rents in recent years have pushed homes out of reach for thousands of local residents. A legislative task force last year estimated that about 32,580 new homes would be needed on O'ahu by 2009. Nearly half of those would be needed for low-income households.

According to a report by the developer, Hale Mohalu II would target low-income seniors and families. Five percent of the units would be designated for families or individuals earning up to 30 percent of the median income.

The remaining 95 percent of the units would be for those earning up to 60 percent of the median income, or $29,940 for an individual and $42,780 for a family of four, the report said.

Proposed rental rates range from $481 to $850 for family units and $401 to $801 for senior units.

"Their mission is to provide affordable housing," project manager Gary Furuta said of the Coalition for Specialized Housing. "They want to continue to give back to the community and provide affordable housing, which is really lacking in the state. And they're targeting the very low-income market. ... It's just harder for the very low-income tenants to find housing."

The project site is a vacant lot accessed from Kamehameha Highway, and is behind the Pearl City Business Plaza. It would be next to the existing Hale Mohalu senior rental housing complex that is also owned and operated by a partnership of the Coalition for Specialized Housing and CBM Group Inc.

The project has a historical background. The proposed project site, as well as the present Hale Mohalu senior housing, is on the grounds of the former Hale Mohalu state residential treatment facility for Hansen's disease patients. The state closed the facility in 1978, but some patients refused to move. Amid legal battles, they continued to live in Hale Mohalu, sometimes without regular electrical service, water or medical care.

In 1983, when the legal appeals ran out, law enforcement officials began arresting patients and supporters who wouldn't leave willingly, and the complex was razed.

Following the dogged efforts of patient Bernard Punikai'a, the coalition built the 210-unit Hale Mohalu senior housing complex, which opened in 1996.

"It's always been our goal to make whole the original Hale Mohalu," said Wally Inglis, president of the coalition and one of the supporters of the patients. "We're giving the state an opportunity to make good use of public lands that have just been idle. ... Affordable housing is a desperate need throughout this whole island of O'ahu."

The state Board of Land and Natural Resources has given tentative approval of a lease to the coalition for the project.

The project requires exemptions from some general preservation zoning standards, such as a 25-foot height limit. The buildings generally are just over 60 feet high, with the tallest point at about 71 feet, although the project site is at a lower elevation than Kamehameha Highway.

Pearl City Neighborhood Board acting chairman Albert Fukushima said there are no objections to having more affordable housing in the community, and that there are many homeless people in the area, especially in Blaisdell Park.

But the board still has some concerns about the project, including its height and impact on access to and from the neighboring Pearl City Business Plaza and gas station, Fukushima said.

"Nobody has objected to the project. The concept of having affordable housing is needed," he said. "But in terms of the impacts that it would create, there are concerns, especially with traffic access and the height of the buildings."

Inglis said the project already has been scaled back from eight-story buildings to seven-story buildings following earlier community concerns. He also said the coalition plans to work with area businesses and the state to come to an agreement about traffic access.

State Rep. K. Mark Takai called the project "the right type of facility in the right place."

It's best to "encourage providers like this to build upon what's already successful than to have another project built somewhere else," said Takai, D-34th (Newtown, Waiau, Pearl City). "It's utilizing land that's been vacant for decades for purposes that the community has a desperate need for."

The coalition is seeking federal and state low-income housing tax credits, rental housing trust funds, and other public and private funds to finance the project.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.