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The Hawaii Public Housing Authority is constructing 16 new affordable housing units in Hilo.
The homes are part of Lanakila housing project, and will replace old housing units torn down in 2015.
Ben Park, state housing planner, said the homes should be ready for occupancy by the end of the year.
The state Legislature allocated $7.5 million in 2013 for Lanakila redevelopment.
Work was delayed following the discovery of arsenic in the soil.
Park said a couple feet of soil was removed and replaced. Contaminated areas also were capped.
Applicants must be at or below 30 percent of the area’s median income to qualify for housing.