LEWISTON – Portland-based Developers Collaborative hopes to use low-income housing credits to build a 20-unit senior housing project in the Birch Street neighborhood.

Councilors agreed to sell two city-owned lots, at 279 and 283 Bates St., to the developers. They’ll combine those with a lot at 38 Knox St. to build the housing complex, on the southern side of Birch Street between Knox and Bates streets.

Developers will pay the city $150,000 for the two lots, about one-third of an acre. The land is assessed at $19,400, according to city officials.

The project relies on getting low-income housing tax credits through the state, as well as $200,000 in federal HOME grants the city already has. Developers will apply for the tax credits in September and should find out if they will get them by March 2008.

Lincoln Jeffers, assistant to the city administrator, said the developer will also ask the city to create an affordable-housing tax increment financing district to help reduce rents. That would take a portion of the property taxes the developers pay for the project and use them to buy down the rents. That TIF district will come before the City Council at the Sept. 4 meeting.

The development will create 18 one-bedroom apartments and two two-bedroom units with rents ranging from $400 to $500 per month.