Gov. Josh Green announced Thursday that Waiahole Valley residents with state land leases for house lots will have two additional weeks to avert arbitration over rent increases.

Many residents held a roadside protest at the base of the valley Wednesday urging Green to allow mediation for residential lot lessees who did not want to accept steep rental rate hikes that could be mitigated somewhat for low-income lessees.

Around 40 Waiahole Valley lessees with residential lots faced a deadline today to accept the state’s offer or abide by a future arbitrator’s decision that could result in higher rent than what is being sought by the Hawaii Housing Finance and Development Corp., a state agency that owns 91 lots in the valley and leases them to residential, farm and commercial tenants.

“At my request, HHFDC has agreed to a two-week extension for residential-lot families to work with HHFDC on seeking rental relief,” Green said in a statement. “I urge everyone during this time to resolve negotiations before arbitration starts.”

HHFDC is seeking higher lease rent for the next 15-year term under 55-year leases that began in 1998 and had little or no ground rent increases for the first 25 years.

The hike, according to the agency, would allow HHFDC to reduce by half its $1.1 million annual deficit maintaining the subdivision and keep rent for lessees at about half the market rate.

About 12 of 53 residential lot lessees have agreed to new monthly rent, which ranges from $330 to $769 depending on lot size and would rise by $100 a month in both the sixth and 11th years of the 15-year term.

HHFDC also is offering smaller increases for lessees with household incomes at or under 60% of the median annual income on Oahu. Qualifying lessees must indicate their intent to participate in the subsidy program, which has yet to be set up, by the new July 14 deadline.

The agency said the program aims to limit total housing costs for lessees to 30% of their gross income in line with federal low-income housing guidelines. Total housing costs include ground rent, property taxes, maintenance expenses, mortgage payments and other things.

Green and HHFDC stated Thursday that no families will be displaced as a result of the new rents.

“We don’t want a rent increase to be the reason families are displaced from their homes, which is why HHFDC is creating this relief program,” Dean Minakami, the agency’s interim executive director, said in a statement.

To explain more about the subject, HHFDC has scheduled a public meeting for 7 p.m. Thursday in the Waiahole Elementary School cafeteria.