Living on Lanai will be more affordable over the next several years under a plan to gradually expand the housing supply on the island largely with low-income rental homes.

Pulama Lanai, the company established by billionaire Larry Ellison after he bought 97% of the island in 2012, plans to develop 150 rental homes on the former Pineapple Isle starting next year, and just over half the homes would be reserved for low-income households at affordable rents anticipated to be as low as $603 a month.

The project stands to be the first major addition of housing in the community since Ellison acquired ownership of Lanai and most of its housing supply.

The addition also is planned amid a more than decade-old stalled effort by Maui County to produce 425 affordable homes on Lanai.

Pulama intends to develop a subdivision called Hokuao on 76 acres mainly once planted in pineapple just beyond the developed western edge of Lanai City just below the community’s commercial core and Dole Park.

The company disclosed details of the estimated $115 million project in a draft environmental assessment recently published by the state, and said in the report that construction and pre-leasing could begin next year if government approvals can be obtained.

Pulama anticipates building the subdivision over nine years in pace with relatively light projected population growth in the community with about 3,000 residents, though demand for the affordable homes is expected to be oversubscribed.

About 1,480 homes exist on Lanai, and Maui County’s 2016 Lanai Community Plan states that pre-coronavirus increases in economic activity on Lanai heightened demand for affordable housing in a market where inventory is tight and many residences are luxury vacation homes beyond the reach of longtime residents and workers.

“The lack of new housing developments and the limited variety of existing housing prevent working families and short-term contract workers from fulfilling their housing needs,” the community plan states. “New housing choices are needed for singles, the elderly, renters and first-time home buyers.”

Pulama, in its report, called the shortage of affordable housing critical on Lanai and noted that recently only four homes on the island were listed for long-term rent.

“There is a scarcity of homes on the island available for long-term residential rental,” Pulama said in its report. “This is insufficient to provide for general market demands, meeting a diversity of specific tenant needs, and a vacancy allowance capable of servicing the community.”

In a statement, Kurt Ma­tsumoto, Pulama’s chief operating officer, who was born on Lanai, said the planned homes will blend nicely with existing plantation-era residences in Lanai City and deliver housing for workers on the island.

“We look forward to adding new workforce housing inventory on Lanai,” he said.

Of the 150 planned homes, 76 would be reserved for low-income households and are projected to initially have monthly rental rates from $603 to $1,688.

Such households would include those earning as little as 30% and no more than 80% of the annual median income.

For Maui County that equates to $21,540 for a single person or $30,750 for a family of four at the low end, and $57,440 for a single person or $82,000 for a family of four at the high end.

All the affordable homes would feature two bedrooms, 1,080 square feet of living space, 327-square-foot lanai and a car-park pad.

Architecture of the homes would include “gracious” lanai, simple hipped roofs and board-and-batten siding, while interior subdivision streets would mimic existing Lanai City patterns and drain rainwater to side swales without sidewalks or gutters.

“This gives the city a cohesive, balanced appearance throughout the community,” Pulama’s report said.

Of the 74 market-priced rental homes, 59 would be of the same size and designed as affordable units. The other 15 market homes would feature four bedrooms, 1,858 square feet of living space, 470-square-foot lanai and garages.

The subdivision also would include a 1-acre public park and a 1,500-square-foot community center.

Hokuao represents one piece of a long-term master plan by Ellison to grow and diversify Lanai’s economy.

Early changes on the island made by the co-founder of software firm Oracle Corp., whom Forbes recently listed as the fifth-­richest person in the world with a net worth of $88 billion, include transforming Lanai’s two luxury hotels at a combined cost of $150 million to attract wealthier visitors.

Ellison also established a hydroponic greenhouse farm that sells produce statewide, and has invested in community projects that include expanded health care facilities, historic building restorations, natural resource enhancements and improvements to the local theater and community pool.

Future plans include expanding the airport, developing an industrial park, building an observatory for stargazing at the Manele resort area outside of Lanai City, creating an amphitheater at Manele and adding 546 acres to triple the size of Lanai City to accommodate more housing, a university campus, film studios and a tennis academy.

To accommodate much of the growth, Ellison intended to develop a water desalinization plant because Lanai faces potable water constraints, but this plan is in limbo because county officials weren’t willing to permit such an operation for as long as Pulama sought.

Pulama said in its report that there is more than sufficient water for Hokuao, which would need less than 121,700 gallons a day. Pulama said the island’s sustainable yield is 6 million gallons a day, while 1.6 million gallons a day are pumped for use on average.

To move ahead with Hokuao, Pulama needs approvals that include a state Land Use Commission reclassification of the land from agricultural to urban use and Maui County exemptions from some development rules, among other things. Pulama is allowed to seek such exemptions under a state affordable-housing law subject to Maui County Council approval.