Finding little success selling the eight-story Mokuola Vista condominium to gap-group families, developers of the building in Waipahu want to convert it into an affordable rental apartment complex.

The request by GSF Inc. for the 70-unit building on state-owned property at the corner of Mokuola Street and Kau'olu Place will be heard today by the City Council Zoning Committee. Under the proposal, the two-bedroom units could go for about $800 a month to those who are eligible, said developer consultant Keith Kurahashi.

GSF principal Gary Furuta was out of town and unavailable for comment yesterday.

Kurahashi said that only three sales contracts were secured after a year on the market. Units were priced at $260,000 to $270,000. "They weren't able to make it work," Kurahashi said, noting that a certain number of units had to be sold for the developer to obtain its principal loan. The total project cost is $18.3 million.

Kurahashi said Furuta intends to seek financing now through tax credits and the financial backing of other developers required to provide affordable housing for their projects.

The sales units were aimed at those making up to 140 percent of median household income, what's often referred to as the "gap group" — people with incomes that just exceed government guidelines for subsidized housing.

The rental units would be aimed at those who make 60 percent of median income and below, Kurahashi said. To be eligible, a single person would have to make no more than $31,320, a couple no more than $35,760, a family of three no more than $40,260 and a family of four no more than $44,700.

GSF would be required to keep the units affordable for the next 61 years, although it would still have the option of converting back to an affordable for-sale condominium at any point, provided no tenants are displaced.

"From our perspective, it's fairly straightforward: This project as a for-sale project didn't gain any traction," said Dan Davidson, director of the Hawai'i Housing Finance and Development Corp., the state's housing development agency and owner of the land under Mokuola Vista. "And rather than wait around, the developer has determined the prudent thing to do would be to turn it into a rental project."

The agency's board has already signed off on the move.

"At HHFDC, we support rental housing equally as for-sale," Davidson said, noting that Furuta and a nonprofit company with which he has long been associated, Hawai'i Housing Development Corp., have had a good track record of creating and managing low-income rental projects.

Councilman Nestor Garcia also noted Furuta's experience with rental housing.

"He has a good record," Garcia said, adding, "there's always a market for rentals."

Construction on Mokuola Vista began last summer and is expected to be done in September.

Meanwhile, sales efforts continue at Plantation Town Apartments, a twin-tower, 330-unit for-sale complex next door to Mokuola Vista that also is on state property and is geared toward moderate-income families.

Project broker Barry Kaplan said about 45 percent of Plantation Town Apartments is sold and that there is no intention of moving to a rental strategy.

Kaplan said he believes better pricing and selection have made it more attractive than Mokuola Vistas. Plantation Town Apartments has one- to three-bedroom units that sell for $131,500 to $302,000, according to the project's Web site.

Neither Kurahashi nor Davidson thinks the slow sales of Mokuola Vista is indicative of the demand for affordable-sales units on O'ahu. They noted that similar projects elsewhere on the island have sold well.

"We'll be watching both our rental and for-sale projects and see how they do, but we think that the community (islandwide) still needs both," Davidson said.

"They need a combination of for-sale and rentals, so we'll continue to try to provide both."

Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com.