State agency offers apartment buildings to private investors
HONOLULU — A Hawaii agency has decided to lease six of its apartment properties to a private investor, prompting affordable-housing advocates to worry that the state’s shortage of space for low-income families could become worse.
The properties include a total of 1,221 rental units on Oahu, Maui and Hawaii island, which are currently occupied by hundreds of low-income tenants who rely on state and federal rent subsidies, The Honolulu Star-Advertiser reported.
The Hawaii Housing Finance and Development Corp. is soliciting bids for the properties until today. The properties are being offered without an asking price under what would be long-term ground leases — up to 75 years for five of the properties and 40 years for one property.
The six projects were developed in the early 1990s to cater to moderate-income families earning up to 80 and 100 percent of so-called area median income. And while the agency has a mission statement “to increase and preserve the supply of workforce and affordable housing statewide,” it stated that owning and managing affordable housing is not part of its core function.
The agency stated it is making an effort to minimize displacement, though. It will impose affordability requirements on any new owner, capping annual rent increases at 2 percent for the first five years for current tenants. But after that, rent could increase up to the maximum income caps for five of the six properties.
“HHFDC is not seeking to profit from the sale . but to preserve the affordability and sustainability of the portfolio, and focus on our core mission of facilitating the development of housing,” said Kent Miyasaki, an agency housing information specialist.
The agency plans to pay off $76 million in bond debt that was used to develop the properties. Any net proceeds will be used to fund rental assistance subsidy programs, the agency stated.
Victor Geminiani, co-executive director of the Hawaii Appleseed Center for Law and Economic Justice, said the plan raises concerns about the long-term affordability of the units.
“I question seriously this move within the context of the crisis we have with affordable housing in the state and in view of the projections that we need 25,000 units, of which the majority are needed for 60 percent below (area median income), in order to be able to stabilize our rental housing situation,” Geminiani said. “Any low-income rental housing is next to nonexistent.”
Just fewer than half of the tenants at the six properties, or 581 units, are receiving state-funded Rental Assistance Payment subsidies of $175 a month. Some 140 tenants receive Section 8 housing vouchers designed to assist low-income families.
Gov. David Ige emphasized that the state would continue to own the properties.
“To be clear, we’re not giving up the portfolio,” Ige said. “The state would continue to own the land. We’re looking for someone to make investments and upgrades and manage.”