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Hawaii’s public housing agency is pursuing an ambitious plan to add at least 10,000 more homes to its portfolio over the next decade or so.
The Hawaii Public Housing Authority anticipates picking a private master developer partner within 60 days to redevelop nine of the agency’s low-income rental housing subdivisions on four islands where all 1,187 existing apartments would be replaced while also adding potentially 10,880 more homes for low- and middle-income households.
If successful, the initiative would redevelop about a third of HPHA’s public housing, some of which dates back to 1953, and come close to tripling the size of the agency’s inventory with mixed- income housing and many homes near city rail stations.
Yet the plan could be difficult to realize given HPHA’s troubled recent history of redeveloping a few of its largest public- housing projects with private partners under long-term land leases. The plan, which is named Ka Lei Momi and means “The Pearl Garland,” also relies on state agencies and the Legislature to help fund redevelopment.
Hakim Ouansafi, HPHA executive director, told members of Senate and House committees on housing during a Thursday briefing that the plan will make better use of underutilized public-housing properties as part of a state effort to address Hawaii’s affordable-housing crisis.
“This is crucial, as any time we open our waitlist, thousands do apply,” he said. “There is a tremendous amount of need for the folks who are most vulnerable.”
Ouansafi said a master developer is expected to reduce costs by obtaining materials in greater bulk, which will be simpler than HPHA having to work with different developers for each property or phase of work.
“Instead of having 20 or 30 developers working on 20 or 30 different properties, this process that we have selected will allow us to have a single point of accountability,” he told the two committees.
High density
Most of the plan is concentrated at four HPHA projects in Kalihi and Aiea where 997 public-housing units are to be replaced and 9,120 homes added.
The biggest increase is slated for Kamehameha Homes, where 2,950 new units could be added to the 16-acre property in Kalihi where 221 existing apartments built in 1939 and rehabilitated in 1997 also would be replaced with new units.
Adjacent to Kamehameha Homes is the 152-unit Kaahumanu Homes community, where HPHA envisions replacing existing apartments and adding another 1,550 on the 7-acre site.
Another Kalihi property in the plan is Mayor Wright Homes, a 70-year-old complex with 364 units that would be replaced while adding another 2,450 homes on 15 acres.
Also among the four biggest properties in the Ka Lei Momi plan is Puuwai Momi, a 260-unit complex in Aiea where 1,550 additional homes are envisioned along with replacement of existing homes that were built in 1969 on 12 acres.
Five smaller properties in the plan are Hale Laulima with 36 units in Pearl City on 4 acres, the 36-unit Nanakuli Homes on 4 acres, a vacant 10-acre piece of Lanakila Homes in Hilo, the 82-unit Kahekili Terrace on 5 acres in Wailuku and a 36-unit complex on 4 acres simply called Kapaa after the town on Kauai.
HPHA could substitute one or more of the nine properties for others in its portfolio under its plan.
Seeking a master developer, which could be a team of development firms, to take on multiple redevelopment projects at once represents a new strategy for HPHA. In the past, the agency has in some cases used state grant money to contract planning work for individual properties, and in other cases selected private developers through competitive bidding to redevelop individual properties with mixed results.
Problematic P3s
HPHA, which controls 6,270 rental housing units at 85 properties across the state, has had a difficult time with public-private partnerships, or P3s, formed to redevelop individual public- housing projects.
Previously, the most ambitious P3 for HPHA involved Mayor Wright Homes.
The agency in 2014 tentatively picked a team led by Texas-based Hunt Development Corp. to turn the old low-rise complex into a new community with 2,500 apartments mainly in towers with very low- to market-price rents, a central park, rooftop recreation decks, a community center, retail stores and an early-childhood public school.
However, the $1.7 billion project’s construction timetable got delayed, and in 2020 HPHA terminated its development agreement with the Hunt group over design, budget and other issues.
Trouble also has plagued a P3 formed to add about 450 new low-income rental homes to what is already the state’s largest public- housing project, Kuhio Park Terrace and Kuhio Homes in Kalihi.
New Jersey-based development firm The Michaels Organization in 2012 helped renovate HPHA’s twin 16-story towers now known as The Towers at Kuhio Park, but ran into problems with the agency carrying out a second phase to build 450 new homes in place of 176 obsolete units in sections of the property known as Kuhio Homes and Kuhio Park Terrace Low-Rise.
HPHA terminated the agreement in 2017 and intended to seek new proposals, but in 2019 revived and amended the partnership, which now calls for Michaels to develop up to 650 new homes.
Michaels is trying to obtain financing, and expects construction can begin in July 2024.
Another drawn-out, but less strained, HPHA partnership involves California- based nonprofit development firm Retirement Housing Foundation building 800 homes reserved for low-income seniors on the agency’s Liliha-Palama administrative campus.
The nonprofit was selected in 2016 and expected to finish building the first of three towers in January 2024. However, construction has yet to start in part because design problems inhibited permitting approvals, and the nonprofit complained in February that HPHA has been unable or unwilling to pay an equal share of increased pre- development costs.
Ouansafi said at Thursday’s briefing that HPHA is seeking a legislative appropriation to cover its share of increased costs and that construction is expected to begin by the end of this year.
Broader tack
HPHA’s more ambitious new effort to redevelop nine public-housing projects was partly the result of a task force that examined the agency’s redevelopment work. Under the initiative, the agency expects a master developer could arrange for other developers to carry out individual projects.
HPHA expects that about 9,000 of the envisioned additional units will be rentals serving households making 0% to 120% of the median income, and that federal rent subsidies will be available for many units. On Oahu this year the annual median income is $91,500 for a single person and $130,600 for a family of four.
Another roughly 1,000 units are envisioned to be leasehold condominiums for sale with 99-year land leases.
HPHA anticipates that the first project redeveloped out of the nine will be Mayor Wright Homes because environmental studies, much planning work and community engagement have already been done.
Ouansafi said at Thursday’s briefing that an initial phase for Mayor Wright Homes with 350 rentals and 300 leasehold condos is envisioned and that HPHA expects to seek a legislative appropriation in 2024 to help fund this phase.
The agency’s board has expressed some skepticism over Ka Lei Momi but in January unanimously approved issuing the request to seek a master developer.
Leilani Pulmano, board vice chair, questioned whether a master developer earning a fee for having other developers redevelop HPHA properties would be something that agency staff could do, according to minutes of the January meeting.
Board Chair Robert Hall described the initiative as a very aggressive action with a lot of uncertainty on implementation, according to the January meeting minutes.
At Thursday’s briefing, Rep. Troy Hashimoto, chair of the House Committee on Housing, wondered whether the master developer approach is such a big undertaking that it risks failure, compared with breaking up the effort.
“It’s a grand plan,” said Hashimoto (D, Wailuku- Waikapu).
HPHA embraces the challenge. “It is absolutely an ambitious undertaking, but we have a housing crisis,” Benjamin Park, the agency’s chief planner, said in a statement. “It’s a big problem that requires a big solution.”
REDEVELOPMENT PLAN
The Hawaii Public Housing Authority aims to replace 1,187 existing homes and add 10,880 more homes at nine of its public- housing projects on Oahu, Hawaii island, Maui and Kauai.
PROPERTY NAME / LOCATION / AGE IN YEARS / EXISTING HOMES / ADDITIONAL HOMES
Mayor Wright Homes Kalihi 70 364 2,450
Puuwai Momi Aiea 53 260 2,170
Kaahumanu Homes Kalihi-Palama 64 152 1,550
Kamehameha Homes Kalihi 25 221 2,950
Hale Laulima Pearl City 41 36 700
Nanakuli Homes Nanakuli 53 36 500
Lanakila Homes Hilo N/A 0 250
Kahekili Terrace Wailuku 57 82 200
Kapaa Kapaa 36 36 110
Source: Hawaii Public Housing Authority
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