About six dozen low- to moderate-income families interested in helping build their own homes on O'ahu's Leeward Coast are being sought by a team attempting to build a townhouse complex on a site where two previous real estate development plans failed.

A Utah developer is working with a local self-help housing industry official to develop a 63-unit townhome complex called Ma'ili Beach Place envisioned to provide spacious condominiums at below-market prices to buyers contributing sweat equity.

The plan represents a creative attempt to build and sell new homes in a local residential real estate market that has entered a second year of difficulty while aspiring homeowners struggle with effects of a shaky economy.

Affordable housing advocates say self-help housing in general is an especially good model for producing affordable housing in tough times, allowing families in the lower part of the economic spectrum to build wealth and strong communities.

Presently in the housing market, buyer demand has been stymied by more restrictive lending standards, rising unemployment and eroding job stability. And even though home prices are coming down and interest rates are low, many local residents still can't afford a mortgage.

"We think it'll open the (homeownership) door to families," said Mike Sessions, a director and immediate past president of self-help housing organization Hawaii Habitat for Humanity Association who's leading the Ma'ili Beach Place project through a newly formed nonprofit Dreambuilders Foundation.

To be sure, the self-help housing model isn't new. Several projects are under development statewide. Typically however, such projects involve nonprofits working with grants or corporate or government sponsorship that reduce the cost of homes in combination with labor from buyers. Ma'ili Beach Place is kind of a hybrid nonprofit self-help and private development project.

Initially, the 5.7-acre site mauka of Farrington Highway along Ma'ili Stream just south of Ma'ili Beach Park was the site of a planned affordable rental project in the 1990s by local developer Harold Spector.

A swimming pool was built on the property, but the affordable apartments were never built. Spector died in 2005, and his wife sold the parcel to a Utah developer two years ago.

The Utah developer, Robert Slater, with partners set out to build an upscale condo and filed its plan with the state last April. But the real estate market decline scuttled the project.

Sessions said the condo plan had potential for conversion to a lower-priced self-help project, and made a deal with Slater's group. "With the market not being there, they looked at some other options to make the project work, and at least get their money back," Sessions said.

As the deal is structured, Slater's Ma'ili Beach Place LLC will develop infrastructure on the property and then sell the improved land to the 63 condo buyers for around $8 million, or roughly $135,000 per buyer, Sessions said.

Sessions said the deal will allow Slater's group to recover its investment, which includes $5.5 million spent to acquire the property plus planning and infrastructure costs.

After the land transfer, the nonprofit formed by Sessions and an affiliated for-profit contractor working at reduced rates would build the townhomes with help on weekends from buyers.

Sessions estimates that the townhomes, ranging from about 1,150 square feet to 1,350 square feet with three to four bedrooms, can be built for $115,000 to $140,000, which when including the land cost would equal a total cost of $250,000 to $275,000.

The contribution of labor from home buyers working in groups of 12 families is estimated by Sessions at $50,000 to $75,000, resulting in a home worth $300,000 to $350,000.

Sessions said he's applying for a federal grant that, if obtained, would provide a 1 percent mortgage interest rate to buyers earning under 80 percent of Honolulu's median income, or $76,000 for a family of four. However, applications are being accepted from buyers earning up to 115 percent of the median income, or $88,895.

Project broker J.T. Smith, who established Paradise Hawaii Realty last year, said Dreambuilders Foundation will begin taking applications and qualifying buyers Feb. 21 at the Wai'anae Community Center from 3 to 6 p.m.

"This will be the first of several (self-help projects) if we can do it," Smith said.

Claudia Shay, executive director of Self-Help Housing Corp. of Hawai'i, said demand in general for self-help housing is huge, and the model is especially needed in tough economic times.

"It's a tremendous creation of equity for the workforce of Hawai'i," she said. "These are the people that need the housing."

Self-Help Housing Corp. has developed about 550 homes in Hawai'i since 1984, and buyers contribute an average of 1,700 hours of labor during construction.

Shay said one project in the works by her organization — 76 single-family homes to be built in Ma'ili at a cost of $250,000 — has a waiting list of 3,000 applicants. "It's an excellent time for self-help housing," she said.