The state has an enormous challenge on its hands, one that’s gone unmet for decades. It’s become clear that other hands — those working in nonprofit or other private settings — should be brought into the job.
Fortunately, state officials have started down the privatization path already. The Hawaii Housing Finance and Development Corp. is poised to put a Big Island complex, the 128-unit Kama’aina Hale, on the market. It’s the first of the state-run corporation’s nine properties to be offered to private buyers.
The HHFDC is the arm of the state’s public housing enterprise that’s mandated by law to increase the inventory of work force and affordable housing. The public-private partnerships the corporation has forged have produced nine properties with 1,437 units, so a long road lies ahead for the privatization campaign.
Further, completion of Hale Wai Vista II, 132 units in Waianae, represents another encouraging cooperative venture by HHFDC, with the aid of city and private funds.
This is a start, but the state should push even more. As long as a transfer of ownership can be done without reducing the number of affordable units, state government should opt out of the business of running housing projects directly.
The other state agency grappling with the affordable-rentals issue is the Hawaii Public Housing Authority, which directly oversees more than 6,000 units, a job that has proven an untenable burden.
Marion Higa, the state auditor, in June released a report citing the authority’s managerial shortcomings, including a mountainous backlog of maintenance work. Substandard conditions of buildings also have in recent years sparked lawsuits targeting the most degraded complexes: Kuhio Park Terrace, Kuhio Homes and Mayor Wright Homes.
At the heart of the problem is a seeming revolving door at the authority’s top office. The most recent executive director, Denise Wise, is the eighth to hold the job since 1998, and last week she announced she would be the latest to leave. Wise cited personal reasons for her departure, but yet another turnover at this point is surely going to prolong intolerably the process of putting things right.
The authority’s board, Wise said, is working on a comprehensive review of housing conditions statewide. Clearly the goal should be the reduction of state-run housing inventory. Even setting aside the past decade of managerial upheaval, a government agency like HPHA lacks the incentive to handle the upkeep and rental of units with the efficiency of a private owner with some capital invested in the project.
There is a model in place that the state should watch carefully and, if it is successful in the next few years, replicate for its other holdings. This is the sale of the KPT and Kuhio Homes buildings to Michaels Development Co., a New Jersey company with broad expertise in housing management. It is the lead partner in the site redevelopment and renovations that began in May; the state retains ownership of the land and in the deal set the minimum number of units that must remain affordable.
The city also is pursuing a program of privatization for its stock of rental properties. Advocates such as Faith Action for Community Equity favor this trend, even if the redevelopment includes some market-priced housing, but rightly assert that long-term affordability of the current housing stock should be assured.
Government has played a historic role in the provision of housing for low-income families, but in practice has proved to be less than successful as a landlord. The transfer of this duty to private partners seems a more promising trend for the future, and should move at an accelerated pace.