Another proposed housing development for the homeless has hit an obstacle because of neighborhood opposition.

The Dallas City Council delayed voting Wednesday on a $10 million project to build 120 efficiency-style apartments for homeless people after residents raised concerns about the project.

LifeNet Community Behavioral Healthcare wants to build the apartments in the 2600 block of Merlin Street, near Fair Park. Many of the potential residents would have mental illnesses and addictions, for which they would receive treatment.

The council postponed the vote until a committee studies the issue of where to locate housing for the homeless across the city. Dallas has a goal of creating 700 additional units of housing for the homeless by 2014, but other neighborhoods also have rejected similar projects.

Another developer dropped plans in March to convert the Plaza Hotel south of downtown into apartments for the homeless after residents in the Cedars fought the project. And the Lake Highlands Area Improvement Association launched a petition to defeat the conversion of an Army facility on Northwest Highway into housing for the homeless in 2007. Despite some opposition, a downtown project for the homeless and low-income residents is expected to open later this summer.

Mayor Tom Leppert said a lot of residents have the perception that housing for the homeless will have a negative impact on their neighborhoods. But he said the city must find a way to build this type of housing or it cannot solve chronic homelessness.

"If we continue to dodge it, we're not going to be where we need to be," Leppert said.

Developers of the current project must pass several hurdles. They need council approval to build at a higher density than the city currently allows on the property. They are seeking nearly $2 million in city financing. The project also depends on state-issued tax credits, which can be sold to investors to help finance the project. A decision on the tax credits is expected later this year.

Some in the South Dallas neighborhood question whether the apartments would bring more problems to an area struggling to revitalize. The vacant lot where the project would be built already attracts homeless people who appear to be living there.

One of the residents near the proposed project, Alva Baker, said neighbors are sympathetic to the needs of the homeless. But she said they still have unanswered questions.

Baker, president of the South Boulevard-Park Row Historic District Neighborhood Association, said residents are concerned that the project is too dense. She also questions whether it's in the best place given the efforts to redevelop the nearby Grand Avenue corridor.

"It's not a situation where this neighborhood is just saying NIMBY [not in my backyard]," she said. "We need to take a good hard look at what we're doing, and does it make sense and how does it affect future economic development?"

Liam Mulvaney, LifeNet's president and chief executive, said he finds it all "a little bit frustrating."

"The people in North Dallas don't want it; the people in South Dallas don't want it," Mulvaney said. "I am concerned. How are we going to get homeless people homes if nobody wants it built near them?"

He said the council's decision to delay gives him more time to talk with residents about their concerns.

"I truly believe this could spark economic development for the area," he said.

Council member Carolyn Davis, who represents South Dallas, stressed the need for housing for the homeless to be built in all parts of the city.

"I'm asking other council members to share this burden with me," she said.

Council member Steve Salazar, who will work on the committee to study homeless housing, emphasized that the residents will no longer be homeless once they have an apartment.

"If we do not produce the units, we will still have homelessness," he said.