The state Department of Business, Economic Development and Tourism's housing finance and development corporation has requested $3.5 million in federal Housing and Urban Development money for a project that would provide 50 new studio and two-bedroom affordable rental units in Wai'anae.

The studio apartment rents would range from $522 to $783 a month as long as the renter's income did not exceed 40 percent to 60 percent of the area's medium income. Two-bedroom apartments would not exceed $838, also depending on the renter's income.

The project would come from the Neighborhood Stabilization Program authorized by the Housing and Economic Recovery Act of 2008 to assist Housing Solutions Inc. in developing Seawinds Apartments. The remainder of the $13.6 million project would come from other private and governmental funding.

Seawinds Apartments is one of several other possible Neighborhood Stabilization Program-funded affordable housing projects proposed for O'ahu and the Neighbor Islands.

"The more affordable housing that can be created in this economy the better," said Debbie Kim Morikawa, director of the city's Department of Community Services. "You're going to get the most bang for your buck. Construction costs are much lower and it's going to create jobs. So this is great news."

Morikawa said the federal Neighborhood Stabilization Program money comes through the state based on county recommendations for projects that she called "shovel ready."

Janice Takahashi, chief planner for DBEDT's housing finance and development corporation, said federal assistance allows for the affordability of the rentals to fall more in line with the actual earnings of those who would end up living in the apartments.

"These are grant monies," Takahashi said. "They don't have to be repaid, so they don't represent the cash flow problems that other 'affordable' rental projects might have with debt. Neighborhood Stabilization Program funds should be that last piece of funding to make it go."

The state request comes after the housing finance and development corporation reviewed the county's final environmental assessment and agreed that the project presented no significant impact. The request for release of funds process still must go through a public comment period before any Neighborhood Stabilization Program funding can be awarded.

Doran Porter, executive director of the Affordable Housing and Homeless Alliance, said he was delighted to hear about Seawinds Apartments. But he said the 50 affordable rental units should be considered the start of a colossal affordable housing and rental movement in the state.

"This is a beginning to a solution for what is a mammoth problem with the lack of affordable housing in Hawai'i," Porter said. "Estimates of affordable units that are really needed here run anywhere from 7,000 to 11,000.

"So we need to do a lot more. And we need a lot more innovative approaches."