Keep going on city housing sale

The City Council leadership has proposed a nuclear option to resolve what should be negotiable differences over how money from the sale of city rental properties will be spent.

Council Chairman Ernie Martin has introduced a pair of resolutions up for consideration today, one of which would rescind the Council’s earlier approval of the Honolulu Affordable Housing Preservation Initiative.

Embodied in that initiative is the sale of 12 city-owned, subsidized rental apartment complexes, proceeds from which will help finance the city’s "Housing First" program for the chronically homeless and meet some other municipal needs.

The second resolution would authorize the city administration to cancel the sale agreement with the prospective buyer, Honolulu Affordable Housing Partners LLC. Alternately, the measure would allow the postponement of the sale closing.

Mayor Kirk Caldwell is, with good reason, worried that this kind of late action will endanger the deal, because the eleventh-hour intervention leaves the prospective buyer feeling quite shaky about the whole thing.

The plan to privatize the housing projects has a solid rationale — the city is better off getting out of the landlord profession — as long as it doesn’t cause displacement for qualified families and individuals living there. The initiative, which has been in the works even before Caldwell took office, seeks to avoid that outcome.

There is certainly room for debate over how the money from the $143 million sale is being spent, beyond the $72.6 million to pay off the city’s bonds. There is about $35 million in federal Community Development Block Grant (CDBG) funds for various purposes, including $7.5 million to underwrite Housing First.

That program, for example, deserves a healthier share of the proceeds. Housing First is an approach that addresses the social-service and health needs of the most vulnerable homeless populations by first getting their shelter needs settled, which stabilizes their living situation and gives various treatment and rehabilitation efforts a better chance to work. Another allotment is proposed to go to the nonprofit U.S. VETS organization, an agency with a record of working with the chronically homeless, particularly those formerly in the armed forces.

Still, the administration should do a better job explaining how such a relatively modest amount is sufficient to move enough of the homeless from the streets as part of Housing First, the signature program for Caldwell’s first term.

Chairman Martin’s legislation further raises the concern that some of the projects being underwritten in the initiative have not been fleshed out fully, which means the city will need an extension of a federal deadline for encumbering the funds. He noted that if the extension isn’t granted, that missed deadline could endanger the city’s chances for future CDBG funds.

This is a rational point of contention, but the fix for it — putting the whole deal on ice — would be premature. The city intends to seek an extension, and there’s no reason to think the federal authorities wouldn’t allow more time if a clearly articulated plan is in place.

There’s flat disagreement over whether or not the administration involved the Council sufficiently in its project plans. The Council has a tough case to make there, given that the initiative already received approval.

Whoever’s right on that score, the Council resolutions would not advance the public interest, in the final analysis. Some tweaking of the spending plan should be possible. However, adding many more months to the already long planning timetable means that there will be very little progress toward a solution for Oahu’s most acute homelessness problems, not to mention dealing with the city’s dire budget needs. That should be everybody’s focus, from Council chambers to the mayor’s office.