The city and the development's owners, White Street Partners, have an agreement on the price. But such a move would require approval of two referendums from voters, one to borrow the money and another to buy the property.
City Commissioner Jimmy Weekley, who first proposed the idea, said it would keep the two-bedroom units at Peary Court available to people who work in Key West.
"The city is in dire need of affordable housing," he said. "The people that are living there now are paying affordable rents for middle to moderate income families."
The people who now live and rent at Peary Court are essential to the community, Weekley said.
"We're losing police officers, firemen, teachers, nurses," he said. "That's basically who's living in those units. If we lost that housing, these people have nowhere else to go."
Weekley said the rents from the 157 units would pay back the debt the city would need to take on to buy the property. The units would remain as rentals and would be managed by the Key West Housing Authority.
Peary Court was built in the mid 1990s as a Navy housing area for junior officers. Two years ago, it was sold to private developers, who once planned to remake the property.
Those developers could still add 48 units to the area — but they would be required to remain affordable in perpetuity, Weekley said.
The City Commission is scheduled to discuss the proposed purchase after its budget workshop on Monday. If they approve putting the question to voters, it would be on the ballot for local elections in October, Weekley said.