The number of proposed units has been reduced from to 80 units, and the height to three stories.

The news came after the nonprofit developer applied for $3.5 million of city housing funds to help build the tentatively named Lincoln Court Senior Housing at the corner of Lincoln Avenue and MacArthur Boulevard. Thirteen groups have applied for the $10 million the city gives to affordable housing projects every year, said Roy Schweyer, manager of the city's Housing and Community Development division. Meea Kang of Domus Development said she and the site architect were able to come up with a project that looked similar to the original 120-unit development but contained only 80 units.

Kang said the changes came after her group met with Dimond District residents, many of whom opposed the density and thought the building was too tall for the neighborhood.

"We listened to what the community had to say and tried to figure out how we were going to address that," Kang said.

The development will also include street-level senior services from proposed provider Self-Help for the Elderly.

The Hillcrest Motel, a rambling structure blamed for area crime woes, was demolished last month. Neighbors fought the city and motel owner for years to have it cleaned up or shut down.

The City of Oakland followed suit, this time under a 3-year-old law targeting substandard hotels. Hillcrest was the first establishment the Oakland City Attorney's office brought be fore an administrative judge, alleging its owners violated terms of their operating agreement. The Hillcrest owners decided to shut down the motel and put it on the market. Its doors closed the first week of September.

Councilmember Jean Quan (Montclair-Laurel) said she is pleased Kang was responsive to the neighbors' concerns. She said senior housing is one of the best uses for the site.