The decision was made during Tuesday’s City Council work session at City Hall, 410 Abbot Road.

The Virginia Avenue project, also known as the Avondale Square project, calls to demolish the homes on the 600 block of Virginia Avenue and replace them with 30 modernized residential units. The city hopes to have the project completed by February.

“It’s part of our commitment to make sure East Lansing continues to have a diverse population,” Mayor Sam Singh said.

Many of the residences on Virginia Avenue are occupied by students. The developing units are intended for the use of families and other permanent residents.

The average sales price of the six units is about $167,000, but the city is targeting families that can afford a monthly payment on a $130,000 mortgage, said Stephanie Gingerich, an East Lansing community development analyst.

This grant would fill the financial gap, enabling families to afford the units, she added.

“The MSHDA grant would make up part of that difference of what these families can afford and the actual price of the homes,” Gingerich said. “It makes the home affordable to buyers.”

Several months ago, the city decided that 12 of the 30 residential units would be set aside for low and moderate-income families.

The city plans to request another grant for the other six units in 12-18 months, said Tim Dempsey, East Lansing’s community and economic development administrator.

“This type of work can be competitive, and it’s easier to compete for a smaller number of assistance grants at any given time, so we’re breaking it up,” Dempsey said. “Also, we don’t expect to sell all 12 of the homes immediately, so we’re basing our application process on when we think sales will occur.”