A group of tenants has been living on residential and farm lots in Waiahole Valley for decades, paying rents well below the market rate and depending on taxpayer subsidies to maintain basic services, including a water supply system that needs an overhaul.
Now the landlord, the state Hawaii Housing Finance and Development Corp. (HHFDC), wants to raise their rents by roughly sixfold. It sounds like a lot, but it’s not entirely unfair — at least from a financial point of view.
HHFDC argues that the increase — from $98 monthly to $648 for a median-sized, half-acre residential lot, for example — is still about 50% below the market rate. The ground rent for residential lots hasn’t increased in 10 years. Farm lot lessees haven’t seen an increase in 25 years.
Meanwhile, the agency says it has absorbed financial losses of $1.1 million annually to maintain the community’s infrastructure, which the abnormally low rents don’t cover.
This status quo is unacceptable and unsustainable. It’s only fair that the 100 or so households involved absorb more of the cost to support their own community. But how much more, and under what circumstances?
Tenants in the valley have fought for years to keep their rents low. Beginning in 1977, when the land was privately owned, residents and their supporters blockaded Waiahole Valley Road and later Kamehameha Highway to protest rent increases and to stop the delivery of eviction notices.
To make peace, the state bought the land, with HHFDC eventually becoming the lessor for 93 long-term ground leases, among them 57 residential and 34 agricultural.
The state’s goals then and now are commendable: to keep rents affordable in support of local agriculture in the valley. The state’s investments should advance these goals — and not merely subsidize residents who don’t want to pay more. Still, the solutions will require more than singular focus on the balance sheet.
The state should pursue raising the rents, although perhaps in a more graduated way. Longtime tenants, especially those at retirement age, may be hard-pressed to come up with a sixfold increase in rent all at once. But they should recognize and accept the necessity of an increase.
The state also should complete a delayed strategic plan to build sustainable agriculture in the valley, and to reconsider which agency should take the lead. HHFDC’s primary mission is to develop and finance low- and moderate-income housing projects and administer homeownership programs. Farming, not so much.
What should not be considered is a moratorium on increasing rents, as two bills in the Legislature would do. It’s long past time to implement necessary changes; putting them on hold is not a wise option.
