PORT ORCHARD — Ground has been broken on a 38-unit apartment building that will sit behind the vacant K-Mart building in Port Orchard.

Construction of the Olympic View Apartment Homes, at 3410 and 3420 Orlando St., was kicked off Aug. 3 with a groundbreaking ceremony attended by city mayor Rob Putaansuu.

The new apartment complex project is one of the benefits the City of Port Orchard has gained by offering developers building multi family properties in specially zoned areas of the city a tax exemption over eight years. Developers must construct new buildings or revamp structures with 10 units or more.

It also is offering developers a 12-year property tax exemption if they sell or rent 20 percent or more of their units to low- or moderate-income families. The tax exemption, which applies to the value of new or rehabbed units, is applicable only in the city’s designated “challenged” areas. Taxes still must be paid for the land parcels on which the units sit.

The goal of the property tax exemption is two-fold: revitalize underdeveloped or downtrodden areas in the city, and encourage the development of affordable housing. Like almost all Puget Sound cities and regions, affordable rental units are scarce in Port Orchard and South Kitsap, with few signs indicating that an upsurge in supply is near.

Phase 1 of Olympic View Apartments will include construction of the 38 units that builder Ovah, LLC labels as luxury apartments, “with views of the Olympic mountains and 24 garages available to renters.” The apartments are next to the Kitsap Transit bus line, providing tenants with “a great and easy commute to the ferries and local amenities,” the construction company said in a news release.

In a second phase that is expected to start in spring 2018, Ovah, LLC will construct an additional 92 apartment units.

The units will range from 720 to 1,335 square feet and will feature 1 to 3 bedrooms.