City embraces role as Makiki landlord

Mayor Kirk Caldwell said the sale closed last week on two vacant Makiki school buildings for $5.5 million for the Housing First initiative that he is banking on to get the homeless off the streets.

"It’s the first-of-a-kind for us," Caldwell told the Honolulu Star-Advertiser in an exclusive interview on Friday in his Honolulu Hale office. "It’s the pioneer that’s crossing the Great Plains."

The empty and adjacent two-story and three-story buildings at the corner of Piikoi and Hassinger streets were previously owned by Island Paradise School and most recently by Loveland Academy for autistic students. They have been vacant since July.

By next summer, as many as 50 "micro" studio apartments could be ready to house a mix of formerly homeless and low-income tenants, according to Sandy Pfund, head of the city’s Office of Strategic Development.

Plenty of details still need to be worked out, including the cost of converting an old school into apartments, the exact number and size of each unit and how many formerly homeless and low-income residents will occupy them.

But Caldwell considers the "Hassinger Project," as it’s currently called, to be just the first of many in Honolulu as island officials face the highest per-capita homeless population in America in one of the country’s tightest and most expensive housing markets.

The city has a $2.1 million annual contract with the Institute for Human Services to find Housing First apartments for homeless people across Oahu. At the end of the first year of the contract, which ended Oct. 31, IHS placed 173 people — including 20 families — in 115 homes.

But the Hassinger Project is the first in which the city will play the role of Housing First landlord. And Caldwell would like to buy 50 more buildings to provide temporary and long-term homes.

The two-story building at 1506 Piikoi St. was built in 1962, according to property records. The three-story building went up in 1964.

"We don’t want to turn it into public housing," Caldwell said.

Under the Housing First model, formerly homeless tenants won’t be required, as they typically are now, to quit drinking or using drugs to get off the street and into a market-rate apartment.

Instead, so-called "wraparound" social services deal with those issues and others, which could include mental illness.

In addition to the homeless, the Hassinger Project also likely would be occupied by low-income tenants.

A toddler play area at the back of the buildings is already in the planning stages.

Caldwell sees the newly acquired buildings fitting into an overall plan: First get homeless people into shelters, then into temporary housing like the Hale Mauliola project on Sand Island that will house 80 to 90 people in shipping containers by the end of the year; then get them into long-term housing at places like the Hassinger Project, where they likely will be allowed to stay for as long as six years.

With the help of social workers, Caldwell said the formerly homeless tenants would then ideally become self-sufficient and able to transition into fair-market permanent homes, freeing up an apartment for someone coming out of transitional housing.

Because the city would be the landlord, Pfund said there’s no urgency to generate rental income to pay off a mortgage.

The formerly homeless tenants probably will be required to pay a portion of the rent, likely from their government-funded benefits. Low-income tenants would likely use their Section 8 vouchers.

Pfund said the rental income needs to generate only enough revenue to pay for a property manager, who might live on site, along with a nonprofit social service agency to run the Housing First program.

The city could also lease the project for as little as $1 a year to an organization such as IHS, which is operating the Hale Mauliola project, Caldwell said.

Just after the sale closed on the former school buildings on Thursday, Pfund briefed the Makiki/Lower Punchbowl/Tantalus Neighborhood Board and received positive reviews, said board treasurer Diane Chong.

No one on the board expressed any opposition, Chong said, but members still want to hear opinions from nearby residents.

"We need it all over the island because homelessness just isn’t in one area," Chong said. "It’s not just in Waikiki, it’s not just in Kakaako. It’s everywhere. We need to have places for them to go to."

The purchase of the Hassinger Project comes amid criticism from some City Council members who insist Caldwell hasn’t done enough with what they say is $140 million the Council appropriated for homeless and affordable-housing initiatives.

Caldwell said the dollar amount is wildly inflated and is actually closer to $64 million. However, he said, his three-person development staff needs more people to hunt down similar buildings across the island to get more people off the streets.

The city was just outbid on two buildings — a $5.4 million offer on an empty 18-room, Chaminade University dorm that received 16 bids; and a $1.2 million bid on a four-unit building on Kapahulu Avenue that got 20 offers.

"Everybody’s demanding that we do something but we need a staff of seven," Caldwell said.

His administration’s request for more staff to deal with homelessness "was all gutted out and taken away," he said.

Council Chairman Ernie Martin said in an emailed statement to the Star-Advertiser: "This is the first I heard of it but it is good to see the city spending some of the roughly $140M the City Council appropriated over the last two budget cycles to address the lack of affordable housing and homelessness. We would like to see the administration’s plan for developing this parcel and serving as the landlord. Is this a one-time deal or are we ramping up our investments in the affordable housing business?"

Martin called the project "a good start, but we need a comprehensive, council district by council district plan, that efficiently blends the diverse array of programs and services available to address the issue of homelessness. The needs in each district are different. This can only be achieved through close collaboration between the private sector, city, state, and federal governments, and nonprofit and faith-based organizations."

The Hassinger Project is in Councilwoman Ann Kobayashi’s district, which already includes a persistent encampment across from Market City Shopping Center and three sprawling homeless areas along the Kakaako shoreline that grew when homeless people were displaced from last summer’s six-week-long sweep of the nearby "Kakaako makai" encampment.

Kobayashi said she wants to hear more details about the Hassinger Project and would prefer renting larger apartments to homeless families, instead of dedicating more smaller units for individuals.

But in general, Kobayashi is glad to see the the Council’s funding turning into results.

"We put money into the budget so projects like this could happen," Kobayashi said. "I’m glad the administration is finally using the money available to begin these projects, because they are needed. We’ll see what happens. But I definitely think it’s a good thing that the administration’s stepping up and using the money that the Council provided."