The first phase of a 320-unit affordable rental apartment complex in east Kapolei could break ground at the end of this year or early next year, Michaels Development Co. officials say.

The project, dubbed Keahumoa Place, calls for one- to three-bedroom apartments in two-story buildings on a 20-acre, state-owned parcel near the Salvation Army Kroc Center. Units will remain affordable for 65 years and would be offered to households earning between 30 and 100 percent of the area median income (AMI).

The first phase of the project would feature 75 one- to two-bedroom rental units offered at up to 60 percent of AMI, which was about $60,300 for a family of four last year. For a family of four earning 60 percent of AMI, rent would be about $1,350 a month for a two-bedroom unit.

The one-bedroom units would be about 540 square feet, two-bedrooms would be 700 square feet, and three-bedrooms would be 800 to 1,000 square feet. Of the 20 acres, open space is planned for about 4 acres.

The 20 acres are owned by the Hawaii Housing Finance and Development Corp., a state agency facilitating affordable housing development. Michaels is leasing the land and will manage the property, which is zoned agriculture. HHFDC is allowed to develop or assist with projects that are exempt from some statutes and rules — such as zoning — given certain conditions, including that there is a primary focus on affordable housing.

The City Council would need to approve a development agreement via a resolution for the project to proceed.

“We have a lot of at-market housing developments, but very few opportunities for affordable rentals,” said Councilwoman Kymberly Pine, who represents the Leeward Coast. “I will reserve my final judgment when I see the final details. But in general I am in favor of affordable rentals in my district, and it is something I will be pushing for around the whole island.”

Elizabeth Char, a development officer with Michaels, said construction of the 75 units would take about 18 months and is slated for completion in 2019. The timeline to build the remaining units depends on when the company can secure financing, which Char said it has applied for this year.

“This is designed for the working families. This is designed to help them,” said Char, who presented a project update to the Ewa Neighborhood Board on Thursday. “We do have a huge, huge affordable housing crisis here.”

Char said company officials also plan to present an update at the Makakilo/Kapolei/Honokai Hale Neighborhood Board’s meeting later this month. Michaels officials made presentations on the project to both boards in 2014 and 2015.

Last year HHFDC approved three pieces of financing, totaling $21 million, for construction of the project’s first phase. The project is part of a state master plan known as East Kapolei II, which spans 400 acres and is largely undeveloped.

At Thursday’s Ewa Neighborhood Board meeting, some raised concerns that too much housing is planned for the area, including the nearby 11,750-unit Ho‘opili development by D.R. Horton-Schuler Homes.

Rodney Boucher, Ewa Neighborhood Board vice chairman, said although there is a significant amount of housing in the area, the project is different in that it would offer affordable rentals. He said other than the concerns raised at Thursday’s meeting, he has not heard feedback from other residents about the project so far.

“People are outpriced as far as buying homes,” Boucher said. “Rentals, I guess you would say, are a viable option until they can afford it (homes).”

Similar concerns were brought up at a Makakilo/Kapolei/Honokai Hale Neighborhood Board meeting in 2014, as well as questions on impacts to traffic.

“It’s hard to go against something like that. But at the same time, it’s more traffic,” said Kioni Dudley, the board’s vice chairman and an opponent of rail and Ho‘opili, on Friday. “It ought to be going elsewhere, and by elsewhere, I mean in town. That’s where the jobs are. That’s where people will be going.”