The state Land Use Commission has provided conditional approval for urbanizing 272 acres on the Big Island, advancing a plan to develop 2,330 homes initiated by the state to provide work-force housing.

Last week’s decision, opposed strongly by the property’s former owner, advances the estimated $734 million master-planned community called Kamakana Villages at Keahuolu for consideration by various Hawaii County entities, including the County Council.

On Friday the LUC filed an order to convert the land from agricultural use to urban use after a 7-2 vote by commission members.

However, the approval was granted subject to several conditions.

One condition is that the production and distribution of affordable homes be agreeable to the county.

Developer Forest City Hawaii LLC has proposed providing 1,169 homes — or just over half of all Kamakana homes — at affordable prices under federal guidelines.

The developer has committed to providing 1,138 multifamily homes and 31 single-family homes at prices estimated between $200,000 and $400,000, though about 400 homes would be rentals.

Market-price homes at Kamakana would include 531 multifamily homes and 630 single-family homes at estimated prices from $300,000 to $700,000.

Another condition is that the developer produce a traffic impact analysis report that is approved by the county and state Department of Transportation, and that the developer implement any mitigation measures recommended by the government related to direct impacts from the project. Also, the developer must contribute its fair share of regional transportation improvements.

The traffic mitigation issue was a main point of objection to the project from the Queen Liliuokalani Trust, which expressed concerns that other landowners and taxpayers would be left to make traffic improvements necessitated by adding so many homes in the area.

The trust also argued that the state, which bought the property from the trust in 1992 under threat of condemnation, originally wanted the site and neighboring land for a broader range of public uses, including a University of Hawaii campus and a sports complex.

A state agency charged with facilitating affordable-housing development, the Hawaii Housing Finance and Development Corp., initially advanced the conceptual plan for Kamakana, and selected Forest City to develop the state property with assistance of a $25 million loan.

HHFDC said Kamakana will help meet an acute need for affordable housing in West Hawaii and reduce regional highway traffic that is bad in part because many workers at nearby hotels commute to the area from far away.

The development agreement between the agency and the developer requires that at least 50 percent of the homes be sold at prices affordable to people earning no more than 140 percent of the Big Island’s median income, or $65,370 for a single person or $93,380 for a family of four.

Forest City has proposed making 58 of the 1,169 affordable homes affordable to residents earning up to the maximum limit. Another 286 homes would be affordable to those earning 100 percent to 120 percent of the median income, and 825 homes would be affordable to those earning between 80 percent and 100 percent of the median income.