The state today agreed to sell 1,221 affordable rental apartments at six properties mainly serving low-income residents to a Hawaii and California real estate development partnership for $170 million.
Board members of the Hawaii Housing Finance and Development Corp. unanimously voted to sell the leasehold interest in the properties to Honolulu-based Stanford Carr Development and Los Angeles-based Standard Property Co.
The six properties are Kamakee Vista, Kauhale Kakaako and Pohulani Elderly in Kakaako; Kekuilani Courts in Kapolei; Lailani Apartments in Kona; and Honokowai Kauhale in Lahaina.
The Carr-Standard partnership will receive mostly 75-year land leases for the six properties. At the end of the land leases, ownership of the homes will revert to the state in all but one case.
As part of the deal, the development partnership committed to spend $53.9 million to improve the homes and limit the size of rent increases for 35 years. Still, many residents are concerned that even small increases could make their apartments too expensive.
For most of the six properties, rents will be allowed to move up slowly from low-income levels to more moderate-income levels for existing residents. Rent increases will be limited to 2 percent annually for the first five years, and then 5 percent annually over the next 30 years.
HHFDC agreed to increase rental subsidies it provides to many tenants, and will use proceeds from the sale to help finance more affordable housing and pay off bonds the state used to build the six properties. Net proceeds to the agency are estimated to total $81 million.