Real People at Rowan provides supported accommodation in Taradale for 19 Hawke's Bay people under 65 with a physical disability.
Fundraising, communications and marketing manager Graeme Milne said the project would cost $2.3 million and should be completed by June 25, 2010.
"While a long term loan will cover most of this cost, we hope the community will come forward with 25 per cent ($575,000) of the building cost so that we can rebuild Rowan," Mr Milne said.
Mr Milne said the building was worn out and needed to be rebuilt.
"It was built to regulatory standards of the time but needs to be elevated," he said.
"There have been two significant floods in the past seven years where the stormwater system failed."
This is the largest disability service project undertaken by Presbyterian Support East Coast and will be completed in three stages.
Stage one is already underway with the demolition of the old, kitchen, dining and two bedrooms.
Each stage will mean relocating the occupants to the rebuilt new section, taking roughly four months.
The building did not comply with new residential care standards, but had a dispensation to operate.
"The building has institution like narrow corridors that are difficult to navigate in the newer wheelchairs," Mr Milne said.
"Today's flatters have higher care needs and are less mobile than two decades ago. More (and larger) wheelchairs are in use; they have no storage or battery recharge area for these.
"Bedrooms have little space for time out, personal hobbies or visitors. Utility rooms are too small for flatters to use without help from staff," he said.
The building design made it difficult to manage infection control.
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