Maili residents sue to block affordable housing project

A little less than a year from now, 51 Hawaii families could be moving into some very affordable new rental homes in Maili with projected monthly rents as low as $526.

But some neighbors of the largely state-financed project called Hale Makana O Maili have sued the developer in hopes of stopping construction on the two-story apartment complex they consider out of place and not rightly permitted.

The group of neighbors formed the nonprofit Na Kiai O Maili Inc., and filed a lawsuit against the city and the apartment project’s developer, Laulima Development, in November after construction began in October.

Members of the group whose name means “protectors of Maili” contend that their property values and well-being will be diminished if the Hale Makana project is built. The group of roughly 20 nearby residents also claim they weren’t sufficiently notified of project plans that date back to 2016.

“Basically what we’re saying is it’s not appropriate to have such a large development relative to the neighborhood’s size,” said Hayden Burgess, an attorney who represents the group and is also known as Poka Laenui. “They’re going to change the character of the neighborhood.”

Kali Watson, a former state Department of Hawaiian Home Lands director who heads up the project for the nonprofit Hawaiian Community Development Board, said the lawsuit lacks merit and that his team tried to be sensitive to the character of the neighborhood by limiting building heights to two stories.

“We’re building affordable housing for the people of Hawaii,” he said. “What’s the harm? The (project) is going to be nice.”

Hale Makana O Maili will be more dense than the surrounding area, but Laulima Development obtained a zoning exemption from the City Council under a state law that allows such waivers for affordable housing.

The project site, which previously contained 10 homes, is 2.8 acres that abut part of a single-­family home subdivision.

Zoning for the property, a category known as R-5, allows only one home per 5,000 square feet of land, or up to 24 homes for the site.

Laulima Development is keeping six existing homes on a portion of the site and building 52 new homes, including one manager’s unit, spread among six new two-story buildings each containing eight to 12 apartments. A park and community garden on 5,720 square feet and a 71-stall parking lot are also part of the project.

To obtain the zoning exemption and financing from the state and city, Hale Makana O Maili must maintain affordable rents for low-income residents for 65 years.

Monthly rents for the units were projected last year to range from $526 to $1,115 for one-bedroom units, from $619 to $1,326 for two-bedroom units and from $703 to $1,519 for three-­bedroom units depending on tenant income.

To qualify, households may earn no more than 60% of Honolulu’s median income, which last year equated to $50,640 for a single person, $57,840 for a couple and $72,300 for a family of four. Ten units are also reserved for households earning no more than 50% of the median income, and five are reserved for households earning no more than 30% of the median income.

The developer anticipates that tenants will be households with roots in the community.

The lawsuit contends that the developer and the city violated Hawaii’s law permitting such affordable-housing projects, but doesn’t specify how. The lawsuit, which didn’t name the project, also contends that environmental issues weren’t sufficiently addressed and that the City Council resolution approving the zoning exemption is unconstitutional because it misstated the name of one road abutting the project.

The city filed a response to the lawsuit last month rejecting all allegations and seeking reimbursement for attorney fees and costs.

Laulima Development also disputed the lawsuit’s claims in a motion to dismiss the case it filed last month.

“The complaint fails to allege any facts in support of its conclusory allegations for all counts and is generally unintelligible,” the motion said.

Watson noted that the development partnership, which also includes Pacific Development Group and Leaf Holdings Inc., participated in extensive reviews that included public meetings and public hearings. City and state agencies also mainly financed the $22 million project.

The meetings included presentations to the Nanakuli-Maili Neighborhood Board and Waianae Coast Neighborhood Board in 2017. The City Council also held public hearings on the zoning exemption in 2018 and approved a resolution waiving about $156,000 in fees for the project.

Over the past two years, the Hawaii Housing Finance and Development Corporation, a state agency that facilitates affordable-­housing production, held public meetings related to financing the project with a $4.7 million loan and tax credits worth about $10 million. The city also chipped in $3 million.

The developer also produced an environmental assessment in 2017 that invited public comment.

Burgess said nearby neighbors weren’t aware of these events and should have been directly notified of plans because they live so close to the project site.

Watson said he doesn’t expect the lawsuit to derail construction that to date has involved preparing the site for foundation work. If construction proceeds without interruption, the apartments could be finished by Christmas, Watson added.