A cluster of nearly century-old homes in Moiliili is slated for demolition next month to make way for high-density affordable housing serving seniors with low incomes.

The planned six-story apartment building with 105 residences is expected to take 17 months to build, and is the product of a more than 2-year-old effort led by the local nonprofit affordable-housing development firm Hawaiian Community Development Board in partnership with California-­based 3 Leaf Holdings Inc.

Earlier this month the partnership received state approval to sell $22 million in bonds to help finance the $40 million project, after previously arranging a package of state and federal financing and obtaining City Council approval for project density and fee exemptions under a state affordable-housing law.

“We’re ready to move forward,” said Kali Watson, Hawaiian Community Develop­ment’s executive director, who once led the state Department of Hawaiian Home Lands. “It was a long process.”

The project, named Hale Makana O Mo‘ili‘ili is slated to provide studio and one- bedroom apartments with projected monthly rents from $521 to $1,226 for low-income residents age 55 and up.

Of the 105 units, 92 will be reserved for tenants with household incomes up to 50% of the median in Honolulu, which equates to $42,300 for a single person and $48,350 for a couple. Six units will be for households earning half as much, and six will be for households earning up to 60% of the median income. One manager’s unit also will be in the complex.

The developer anticipates seeking tenants shortly before the project’s February 2023 projected completion.

Affordable rental rates tied to incomes will be in place for 60 years under conditions for financing that included a $13.6 million state loan along with state and federal tax credits worth $20 million, which will replace some of the bonds and was approved by the Hawaii Housing Finance and Development Corp. in 2019.

HHFDC is a state agency that helps private developers produce affordable housing with financing and an opportunity to obtain zoning and government fee exemptions under a state affordable-housing law known as 201-H after its statute numbering.

The City Council is tasked with considering 201-H projects, and in March granted the Moiliili project about $1.2 million in fee waivers primarily represented by a park dedication fee. The Council also provided a zoning exemption allowing a high-density building in an area zoned for medium- density apartment use.

The developer has characterized its project as an example of “smart growth” that doesn’t exceed the area’s 150-foot height limit or alter the character of Moili­ili, an area with a major mix of businesses and multifamily buildings that include the 15-story McCully Villa condo nearby.

On the project site itself, 27 residences including one single-family home and several low-rise apartments date to around 1928.

The owner of the property, a real estate invest­ment company that bought the site in 2018 for about $4.5 million, is selling the parcel to Watson’s partnership for $6 million.

Watson said tenants on the property received assistance to find replacement housing, including one person who had to be removed with the help of police, and that relocation was successful though challenging.

Supporters of the project included the McCully-Moiliili Neighborhood Board and advocacy group Faith Action for Community Equity.

“We strongly believe that affordable housing development must be a priority of our community and acknowledge that certain development standards are difficult to satisfy while also prioritizing the needs of our low-income residents,” Faith Action said in written testimony to the Council. “The proposed project is one small and necessary step to meet the housing needs of low-income people.”