Once the site of a dilapidated structure formerly used for recovering substance abusers, the city-owned Halona Road property in Waianae is home to three completed modular units that will house working homeless individuals and homeless families with children.

The project will relocate homeless people, most likely from the Waianae Coast, into permanent housing and isn’t considered an emergency or transitional shelter. It is being lauded by city officials as a step in the right direction.

The modulars — a one-bedroom unit compliant with the Americans With Disabilities Act and two two-bedroom units measuring about 500 square feet each — were showcased at a press conference Friday by Mayor Kirk Caldwell and City Councilwoman Kymberly Pine, along with other officials and several Waianae Coast residents.

“We’re standing here in a place that’s been reborn, a place that’s about the future and about giving hope to families of this area,” Caldwell said Friday. “We want to see how it’s (modular housing units) received and how it’s managed and how it’s used so that perhaps we can do this in other parts of the island.”

The units, equipped with kitchen and bathroom facilities, cost about $109,000 each and were delivered to the site at 86-537 Halona Road in August. Units are expected to last more than 20 years.

Site work, contracted through Ideal Construction Inc., on the 7,500-square-foot lot cost about $425,000, which included demolishing the dilapidated structure. The two-bedroom units can house up to five people, and the one-bedroom unit can fit one or two people.

The city, which has owned the property since 1990, had initially said the units would cost about $35,000 to $50,000 each but found that the chosen contractor, Hawaii Modular Space, provided the best product.

“We really wanted to get into the business of building hope and building homes,” said Pine, who represents the Leeward Coast. “Today marks a new beginning for the city where we’re ending the old way of dealing with homelessness and building these homes where people can be very proud of.”

Kealahou West Oahu, a nonprofit that services unsheltered, sheltered and at-risk homeless families, was selected to manage the property. Tanya Tehotu, Kealahou’s executive director, said tenants will be helped with finance management, workforce development and health concerns among other things.

A case manager can meet with tenants once a week, Tehotu said. Shellz Ohana Realty LLC will help select tenants and assist them in finding long-term housing in the future, she said. Tenants are slated to move in at the beginning of November.

Monthly rent for the two-bedroom units will be $1,050 plus utilities, while the one-bedroom will rent for $950 plus utilities. Tehotu said tenants who pay their bills on time will get $125 per month reimbursed when they move out. Because the units are considered permanent housing, there is no limit on how long tenants can stay, she said.

Gary Nakata, director of the city Department of Community Services, said they chose Kealahou West Oahu after reviewing proposals submitted by service providers, with priority given to those with experience working on the Leeward Coast. There are no city funds allocated to manage or operate the property, he said. Instead the city allowed Kealahou to use the facilities in return for offering services to tenants, similar to an agreement at the city’s Pauahi Hale in Chinatown, which is operated by Mental Health Kokua, Nakata said.

But Twinkle Borge, leader of the “houseless” encampment near the Waianae Boat Harbor, said only one of the estimated 25 families at the harbor could probably afford the rent.

“I can see the families being happy,” Borge said, “(but) I’m worried about the finances. This might be able to help a few of them. I hope it works.”

Marc Paaluhi, chairman of the Waianae Coast Neighborhood Board, raised similar concerns, adding that the units would be more affordable if monthly rent and utilities were below $1,000 for a family of four. But he added that it is a good idea that tenants can get some money back if they pay their bills on time.

“It helps them to take more ownership of the units themselves rather than looking at it as a temporary thing,” Paaluhi said. “All in all I think the project is a success.”

City officials presented the project to the Waianae Coast Neighborhood Board last year, drawing several area residents to speak out against the proposal. Residents maintained that the location was not right for the project. They also questioned the city’s communication with neighbors and raised concerns about how the project would affect property values and whether tenants would be screened and monitored to ensure the community’s safety.

Other neighbors have supported the project, saying that homeless individuals and families need a place to live and that the property looks better since crews cleared it and installed the units.