Where a sliver of a dirt lot existed only months ago, a newly completed three-story walk-up for low-income renters now stands.

Developer partners Paul Lam, Greg Thielen and Evan Amakata say their 26-unit Makiki-area development is Hono­lulu’s second, but their first, affordable rental housing project constructed under the auspices of Bill 7.

That 2019 city measure relaxed private development standards and provided incentives — such as property tax exemption for 10 years, and no fees for the city application process — for qualifying developers’ projects.

Constructed in prefabricated concrete in under nine months, the building at 1427 Ernest St. will offer 24 studio apartments and two one-bedroom units, on a more than 5,300-square-foot property.

“Nine months ago, the lot behind me was empty,” Lam said during a ribbon-cutting ceremony Tuesday morning. “We are humbled to be part of the solution that allows these new members of our community to find a place they can afford here in Honolulu, rather than leaving Oahu because of the cost of living.”

Lam noted his company — Lam Capital LLC — has five more affordable rental projects in the pipeline, including a 90-unit project planned on Pensacola Street.

Within the Ernest Street building, studio units are 260 square feet, while its one-bedroom units are 430 square feet. Monthly rents for studios start around $1,500 — including all utilities like gas, water, trash and electricity, while one-bedroom units will lease for about $1,900, with all utilities included, the developers said.

To qualify, a single-person household requires an annual income of less than $73,360, or an annual income of less than $83,840 for a two-person family.

Meantime, Tuesday’s event drew state and city officials.

Gov. Josh Green and Mayor Rick Blangiardi both praised the project as an example of the city and state’s joint effort to build more affordable housing for all income levels.

“Let’s commend Paul and Mayor Blangiardi, and both their teams, for a job well done,” Green said. “They’ve delivered.”

The governor added “like many of you I’m surprised at how fast this project was completed in just nine months.”

“It goes to show you that you can actually get things done if we come together as a family, and provide just a little bit of help to one another,” Green said. “This was a public and private sector endeavor, the community worked together, and now we have housing for local families, which is just amazing.”

The units “are going to go to our teachers, firefighters and nurses,” he added.

“When the mayor and I came together, not just as colleagues but as friends, we meant it when we said that housing is our largest challenge and our top priority,” Green said.

The governor stressed that these affordable housing projects will “add up, they will add up very quickly, especially if they can do this inside a year.”

“This is the same kind of collaboration you’ll see from mayor and I as we tackle those who are living on the streets,” Green said. “As we tackle that challenge together … in areas in the urban core, just to decrease suffering a little bit.”

For his part, the mayor said he too was amazed at the speed of the project’s construction, which first broke ground two days before Christmas.

“We were here on Dec. 23 for the groundbreaking,” Blangiardi said, noting he thought this project would be a “nice Christmas present” to add to the city’s affordable housing stock. “What has also not been talked about is that blocks like this, right in the urban core — that have electricity, sewer and water and everything else — can facilitate development (and such work) is also a beautification of our city.”

Later, kahu Kathleen Thurston, owner and president of construction firm Thurston Pacific Inc., presided over a Native Hawaiian blessing of the affordable rental project.

Afterward, Green and Blangiardi assisted in cutting a lengthy, dark green maile lei before they jointly toured the complex.

Inside one of the building’s studio units, Thielen, the project’s construction manager, told the Honolulu Star-Advertiser that the Makiki walk-up will soon be ready to occupy.

“I think we have as many applicants as we have units,” he said, adding that new tenants may move in by next week. “We’re hoping for Nov. 15.”

But Thielen admitted that even though he and his partners have more projects pending — including a planned 25-unit rental at 1226 Kinau St. which broke ground in October — there are still “a lot of headwinds.”

“I mean, the lending environment has gotten so bad since we started this one, in terms of both the interest rates and the amount of leverage that banks are willing to support,” he said. “So having to come up with more capital is the real challenge.

“We would love to be able to keep on doing this, but ultimately we’re going to have to find other people” to invest in these projects, he added. “Because at a certain point we just can’t put more money up.”

Other factors impact these projects as well.

Although the city touts affordable housing development under Bill 7, the pace of development under the measure — which had a goal of producing 500 affordable rental units per year — has been markedly slow.

Since the measure’s passage into law over four years ago, the city says only nine Bill 7 projects have materialized.

In August, Dawn Takeuchi Apuna, the city Department of Planning and Permitting director, told the Star-­Advertiser those projects — offering 229 units — were among a total of 43 projects that fall under Bill 7’s purview.

“While the number of approved projects has not met expectations, there are 34 applications that are still being reviewed by DPP,” she said via email. “If all are approved, they will result in nearly 1,300 affordable rental units available to our residents.”

She asserted that part of the reason for delays in advancing Bill 7 projects was effectively due to Bill 7 itself.

“Bill 7 is not the easiest law to work with because it tries to strike a balance between life/safety issues and providing more flexibility for cost savings for these smaller developments,” she said.

In spite of the slow pace, Takeuchi Apuna said the city’s commitment to Bill 7 and its affordable housing projects will continue for years to come, albeit in a new form.

“The City Council believes there is a future for Bill 7 projects, and therefore approved the extension of the waivers and incentives for another seven years,” she said, alluding to the fact that the law was set to expire by 2024. “On June 1, Mayor Blangiardi signed Bill 8, which extended Bill 7 for another seven years.”