LYNN — A proposed seven-story, 66-unit affordable housing development at 20 School St. was approved by the Site Plan Review Committee on Tuesday, clearing another step toward construction.

The committee approved the project with several conditions. Developer Harborlight Homes must protect — and, if necessary, replace street trees, submit a construction management and traffic plan before obtaining a building permit, and revise its utility design to meet the city’s water and sewer department requirements.

The project would replace a vacant lot where a one-story commercial building was recently demolished.

The revisions also require Harborlight Homes to redesign its stormwater system to provide more on-site storage and tie into a manhole and the main line, instead of connecting to the back of an existing catch basin, to accommodate a future sewer separation project.

Harborlight Homes received a letter from the city’s water and sewer department outlining requirements that must be met before construction.

The building, which previously received a special permit from the city, is designed to comply with the underlying zoning for the central business district.

While the central business district typically calls for retail space, city officials granted a special permit allowing a community room in its place.

Plans call for 66 affordable housing units at a range of income levels, an 18-space open-air garage, a community room that will be available for public use, a playground and a fitness center. While the development will not include retail space, project officials said the community room is intended to serve neighborhood needs.

“It’s a great location. It’s very walkable and bikeable,” said Kristin Carlson, Harborlight Homes’ senior project and design manager. “We have an indoor bike room to support biking. It’s right next to the temporary MBTA station, but it’s walking distance to the permanent location, to lots of amenities, shopping and bus routes.”

Carlson said the development is intended to address the region’s growing housing shortage.

“We know the need is massive, and this is one project to help create homes for people,” she said.

Harborlight Homes, a North Shore nonprofit that develops and manages affordable housing for seniors, families and other residents, said the School Street project is part of its broader effort to expand affordable housing across the region as rents and home prices continue to rise.