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FOR IMMEDIATE RELEASE February 8, 2007
Release No. M-15-07
CITY WILL SEEK BUYER FOR KULANA NANI HOUSING
Mayor Mufi Hannemann today announced the City will attempt to sell its Kulana Nani apartment housing complex in
When Hannemann took office in 2005, he ordered an independent mayor’s review of the City’s finances and operations, as he had promised in his campaign. That review led to an Asset Management Review Team that recommended the City get out of non-core functions such as residential property management, where it has little expertise, and divest itself of non-essential property.
Kulana Nani would be the first of 12 affordable housing properties the City attempts to sell, based on the City Council’s adoption of Resolution 06-194.
“We know the Kulana Nani residents are very concerned about their future. Let me assure them we will do our utmost to make it clear that the buyer will keep rents at Kulana Nani affordable,” said Hannemann. “We will work with Kamehameha Schools, which owns the land under Kulana Nani, to achieve this objective.”
Kulana Nani consists of 160 two-, three- and four-bedroom apartments. Rents range from $425 to $625 a month.
“As I said in the past, I will only agree to a sale if the tenants are allowed to remain and the rents remain affordable,” said Hannemann. “Clearly, fiscal responsibility and the will of the electorate demand that the City get out of the housing business.”
Almost a decade ago,
Last year, the Hannemann administration retained REH Capital, a consulting firm, to review its affordable housing portfolio. REH confirmed the Asset Management Review Team’s findings and reported there’s an active market of buyers for these assets that could operate and maintain these properties better than the City can. REH recommended the City sell its 12 affordable housing properties with three major restrictions:
· The units must remain rental apartments (so they cannot be sold off as condominiums).
· Rents must remain affordable at the current levels based on federal Housing and Urban Development standards of median income.
· Annual rent increases will be limited.
“Those restrictions would help us achieve our goal of ensuring these properties remain available to the people who need them most,” said Hannemann. “A sale would mean the tenants would benefit from a new private sector owner to make necessary repairs, with capital and experience in property management to better maintain these facilities. Taxpayers would benefit as we remove these financial burdens on the City.”
The City loses an estimated $3.5 million annually on the 12 properties, which consist of a total of 1,257 rental apartments.
“We look forward to working with the Council, and in particular their newly formed committee on affordable housing, to make this sale and the ones that might follow work for the tenants and the taxpayers of
The City would not seek to sell its other 11 affordable housing properties until after Kulana Nani is sold, in order to apply lessons learned from this initial project, including the development of schedules that will take advantage of available tax credits.
Here are the City’s 12 affordable housing properties:
Bill Brennan, 527-6928
Mark Matsunaga, 527-5767
|Thursday, February 08, 2007|