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FOR IMMEDIATE RELEASE                                                                          
October 23, 2007

Release No. M-108-07





            Mayor Mufi Hannemann today reported on the progress his administration is making on its affordable housing initiatives.


            Mayor Hannemann said, “Among the earliest actions of my administration was the appointment of two blue-ribbon panels: the Mayor’s Affordable Housing Advisory Committee and the Asset Management Review Team to assess our core competencies.  I’m very happy to report that we’re making good on the recommendations of both groups, particularly with regard to affordable housing.”


            He lauded Chairman Craig Watase and the members of the housing panel, whose recommendations his administration has been implementing.


            Among the proposals was to provide more incentives for private developers to build affordable units, which the City has accomplished with the introduction of a Section 108 program that uses federal money for loans to developers.  Another was the hiring of a housing liaison to coordinate and oversee City involvement in housing; Raenette Gee has been retained by the mayor for that purpose.  Third was assistance with infrastructure, which the City is accomplishing with its massive sewage and wastewater capital improvements plans and partnerships with entities like Kapolei Property Development.  Fourth was expediting planning and building approvals, which the City is employing using a process spelled out in Chapter 201H of the Hawaii Revised Statutes.


            Another key recommendation of the committee was for support of transit-oriented development.  The Hannemann administration has been active in this regard, holding two public meetings on the process and introducing enabling legislation to the City Council today.


            The mayor said, “Transit-oriented development centered around stations along the rail route, such as in Waipahu and Kalihi, will provide an exciting opportunity to bring about housing and other desirable development options in the community.”


Housing Inventory


            Mayor Hannemann announced the City will be soliciting proposals from private or non-profit housing organizations to take over ownership and management of the 160-unit Kulana Nani apartment complex in Kailua.  Kulana Nani is one of 12 properties owned by the City, representing a total of 1,257 rental apartments.


            While the City is preparing to divest itself of Kulana Nani, preparations that include negotiations with land-owner Kamehameha Schools, it will be spending $2.8 million for repairs and maintenance, including replacing an elevator and reroofing.


            Hannemann said, “If there was a common recommendation of the Mayor’s Affordable Housing Advisory Committee and the Asset Management Review Team, it was that we divest ourselves of our affordable housing inventory.


            “While the City had the best of intentions in establishing a housing program, its duplication with State government efforts, ever-changing real estate market conditions, and mismanagement eventually led to voters calling for the end of the City’s foray into housing back in 1998.  We’re now attempting to make the best of a bad situation—particularly a very low rental income stream that costs taxpayers $3.5 million a year and failure to invest in basic maintenance over the years—by turning over the properties to non-government organizations that have the resources and experience to properly manage these projects.”


            Hannemann said that Kulana Nani would be a test of private management.  He reiterated that all City properties would remain as rental units, would stay affordable based on federal income standards, and would have limited rent increases.


Audit Findings


            In response to a recently released report on the City’s housing program by the City Auditor, the mayor pointed out that the auditor’s inference that the City had raided the housing special fund should have made very clear that raids occurred during previous administrations, and that the Hannemann administration has had a strict policy against such actions.


            He said that the City has received praise from outside auditors for the integrity of its financial system, and even earned the designation of “low-risk” in a recent assessment by Nishihama and Kishida, CPAs.


            Hannemann also disagreed with the audit finding that the City was not enforcing its unilateral agreements with developers.  The mayor said, “The City has been diligent in ensuring that developers meet their obligations to build affordable housing, and any allegation to the contrary has no basis in fact.”


City Support for Housing


            Mayor Hannemann noted that while the City has been seeking to divest itself of its housing properties, it has been aggressive in using federal money to help underwrite affordable housing.


            The mayor said, “We’ve been quite successful in using federal HOME, Community Development Block Grants, and other sources to partner with private developers and the State government in building housing.


            “Since taking office, my administration has completed 184 affordable rentals for low-income seniors.  By next year, we anticipate construction to begin on an additional 609 affordable rental units.  In addition, there have been 2,200 affordable units put on the market, of a total of 5,400 units constructed islandwide.


            “So while the City has not assumed the role of developer, that hasn’t meant we are not aggressive in supporting the expansion of Oahu’s inventory of affordable housing with federal resources and our unilateral agreements with developers.”





Bill Brennan, 527-6928


Tuesday, October 23, 2007

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