The city recently purchased a McCully Street apartment building that it will rent out to lower-income families, Mayor Kirk Caldwell said Tuesday.

The three-story, walk-up building at 754 McCully St. contains 10 units, four of which already have been rented out, city officials said.

To qualify, a person, couple or family needs to make 60% of Honolulu’s area median income or less, as determined by federal housing criteria,“very hard to find in this city and very hard to find in the center of town,” Caldwell said.

For 2020, 100% median income for a family of four in Honolulu is $125,850.

Randeatte McEnroe, regional property manager for Hawaii Affordable Rentals Inc., said apartments are being rented at $1,522 a month for two-bedroom units and $1,287 for one-bedrooms. More than 100 applications already have been received, and only one-bedroom units are now available. Email HAPIHawaii@gmail.com to receive an application or call 589-1845, ext. 11.

Tenants include single- parent households, seniors and working families who can’t afford market rents, McEnroe said.

The property was acquired in May as a “turnkey” structure for $4 million. City Land Management Director Sandra Pfund said the property was purchased from a person who had been hoping to fix it up and “rent these units at very high market rates.”

Instead, her agency worked with the seller to purchase the property.

Since 2016 the city has added 1,328 affordable rentals to its inventory, “almost doubling” what it previously had available, Caldwell said. “We’re not going to stop. We’re going to continue to acquire buildings like this.”

Last week Caldwell and other city officials broke ground on a three-story, 58-unit modular housing rental complex in Ewa.

The mayor last year pushed a bill through the City Council that provides various financial incentives to owners of smaller properties in hopes of stimulating the affordable rental market. So far, the Department of Planning and Permitting has received only two applications to date.

Caldwell said a follow-up bill that the Council recently adopted should ease some of the reservations that property owners had about signing up, he said. He’s been told by developer Marshall Hung that he anticipates 10 to 12 new applications soon that will add 500 affordable rentals to the city’s inventory.

“I don’t think we get to the affordable housing units that we need without the private sector building,” he said. “We’re not going to get to the critical number of thousands upon thousands unless you really work with our private-sector partners.”