The Carlisle administration’s plan to sell the city’s 12 affordable housing complexes to a private company for $142 million in cash and an additional $42 million in improvements at those facilities takes center stage with the City Council this week.
The Council Budget Committee is scheduled to discuss four resolutions related to the sale to Honolulu Affordable Housing Partners LLC at a special meeting at 5 p.m. today at the Mission Memorial Auditorium.
If approved, the measures will be up for a final vote before the Council at 10 a.m. tomorrow.
Administration officials say the proposal will take the city out of the affordable housing business, give the city a much-needed cash infusion and assure the continued viability of the badly needed housing units.
Keith Ishida, executive director for the city Office of Housing, called the agreement with the company a "unique opportunity," noting that several mayors have tried unsuccessfully to have a private developer take over the city’s housing inventory.
But Faith Action Community Equity, one of the early advocates for the city’s divestiture of affordable housing, is raising questions.
"Our main concern is protection of the residents from displacement," said the Rev. Bob Nakata, a FACE member.
The housing complexes would be handed to the company under a 65-year lease with the city retaining ownership of the land. None of the rental units could be converted into sales units under the arrangement. Existing federal housing guidelines that use median household income as a measure for tenant eligibility would need to continue.
"It’s a transaction that will relieve the city taxpayer of the need to continue to subsidize these properties while providing residents with a much better living environment because they’ll get, basically, $42 million in capital improvements over three years," Ishida said. "That’s something our city could never do given our fiscal condition."
Some residents and FACE worry that rents may go up under the new management arrangement. However, Ishida said, "that’s something that transcends this particular transaction. … No matter who buys these properties, rents have to go up."
Ishida noted that many of the units are being rented at market rate and generate income and that many others will be able to absorb a rent increase. An existing rental assistance program can help those who truly can’t afford the increases, he said.
Nakata said assurances from the city and the company that no one would be displaced because of rent issues have been lukewarm.
The developer is being allowed to hand over three of the least profitable buildings to nonprofit groups, specifically Pauahi Hale in Chinatown, Kanoa Apartments in Palama and the "Bachelors’ Quarters" in Ewa Villages.
Nakata said FACE worries about the viability of those complexes if they aren’t being supported by the more profitable buildings.
Ishida said the company will need to fulfill all obligations laid out for all the buildings under the agreement. All transfers to a third party would need approval from the city, he said.
Councilman Ikaika Anderson, chairman of the Council Zoning and Planning Committee, said he also has concerns that a third party could enter the picture without any Council oversight.
"The opportunity is there for the successful bidder to put the blame regarding any problems on that third-party contractor … whomever that may be," Anderson said.
Concerns aside, FACE continues to support having the city sell the properties.
"We see this as a big step forward, and we want to see it work," Nakata said.
