comscore Sell-off of city’s housing following reassuring path | Honolulu Star-Advertiser
Editorial | Our View

Sell-off of city’s housing following reassuring path

There is reason for optimism about the process under which Honolulu is privatizing its low-to moderate-income rentals. While it may be well into 2012 before any papers are signed, the city seems to be doing its due diligence, for the benefit of the tenants and the taxpayers who have been underwriting a money-losing enterprise for years.

For starters, a series of meetings with the community has begun, giving residents of the 12 affordable rental complexes a chance to get their concerns on the record at an early stage. And city officials have committed to a search for a single leasehold purchaser with the experience and financial backing needed to upgrade the properties and manage them efficiently.

The meetings, which continue today at Winston Hale on River Street, should help to gauge the priority projects needed to bring some of the buildings into shape. The operation of the city’s rentals, about 1,200 units in all, have lost about $3 million annually, which is why the upkeep has lagged miserably.

Of course, the No. 1 concern of especially the lower-income tenants in the projects is the pace and degree of increases to the monthly rent. And the answer to these questions, said Keith Ishida, won’t be known until at least the end of the year, when the city expects to send out its request for proposals.

Ishida took over July 1 as executive director of the new Office of Housing and is headed on the right path toward a better outcome for these properties and the people who live in them. The office has retained consultant CB Richard Ellis, the national brokerage firm that handled the 2007 Kukui Gardens complex sale.

It will be a complex proposal, given the diverse housing needs of people who are now city tenants. Many of the units qualify for federal subsidy programs, but many are for gap-group renters or for people qualified to pay market rates, so the leasehold buyer must show the experience and capacity to assemble financing packages suitable for each project.

The city and its management agents over the years have not generally kept rents where they needed to be to cover costs, said Drew Astolfi, state director of Faith Action for Community Equity, the grassroots organization advocating for tenant interests on various affordable-housing campaigns.

Sometimes they have tried to play catch-up with more drastic hikes, which only succeeded in raising vigorous protests, he said.

The better way to run affordable housing, Astolfi and other advocates agree, is for someone at the helm with skin in the game, the incentive to make sure tenants pull their weight and the ability to use some economies of scale to make repairs and other improvements on a timely basis.

The RFP also should seek a provision that would moderate the increases in rents, at the lower income scale in particular, so that they would remain within reach of the existing residents. Some churn in the established complexes is unavoidable, but keeping communities largely intact would be a benefit.

Fewer prospects are on the horizon for affordable housing — meaning units priced for those earning median income or less. For example, the redevelopment of Kakaako now is unlikely to cater to this group. So the city’s current search for someone capable to take custody and tend its apartment inventory is more important than ever.

Let’s hope that ultimately the right choice is made.

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