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Mayor Mufi Hannemann announced today that the City has signed a preliminary agreement that will allow it to purchase the land under its Kulana Nani affordable housing complex in Kaneohe.


The agreement, called a letter of intent, is an important step toward the City’s goal of leasing or selling the land and housing to a private partner so it will be maintained well and kept affordable.


The Kamehameha Schools trust currently owns the 4.26-acre parcel, while the City owns the housing constructed there. The complex consists of 160 apartments with two, three or four bedrooms. Rents range from $536 to $714 per month.


Once the City owns the property, the package of land and housing can be transitioned to a private housing operator, such as a nonprofit group, under restrictions that will protect the residents from drastic rent increases while ensuring the apartments are not converted to privately owned condominiums.


“We recognize that there is a shortage of affordable rental housing on Oahu, and that Kulana Nani residents are very concerned about their future,” Mayor Hannemann said. “As I have always insisted, I will only agree to a sale if the residents are allowed to remain and the rents are kept affordable.”


Dorothea Pale, President of the Residents’ Association at Kulana Nani, said she was very pleased to hear of the City’s intent to acquire the land beneath the complex.


“This is really great news,” Pale said. “The residents are very happy that they can stay here.”


The City plans to acquire the property in exchange for approximately $3.5 million and some City-owned property on Ilalo Street in Kakaako. The purchase, subject to City Council approval, is expected to be financed with money from the Affordable Housing Fund that voters established in 2006 through an amendment to the City Charter.


The City will seek offers for the package of land and housing by issuing a public Request For Proposals, which should be ready by the end of March. The RFP process is expected to take up to one year to complete. The winning affordable housing partner will then assume all responsibility for the management and maintenance of Kulana Nani.


Kulana Nani is one of 12 housing properties owned by the City, which include a total of 1,257 rental apartments.


The City loses approximately $3.5 million each year operating the properties, and has long been moving toward leasing or selling them to responsible private owners who would be required to keep the apartments affordable.


Honolulu voters abolished the City’s Department of Housing and Community Development a decade ago through a City Charter amendment that reorganized City government.


In 2006, the Hannemann administration retained the REH Capital consulting firm to review its affordable housing portfolio. REH confirmed earlier findings by a city Asset Management Review Team and reported that there is an active market of potential buyers that could operate and maintain these properties better than the City.


REH recommended the City transition its 12 affordable housing properties with three major restrictions:

·       The units must remain rental apartments (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.


Following are details about the City’s 12 housing properties:


Property Name (year built or acquired)


No.  Of units

Bachelor’s Quarters (1938)

91-1216 Renton Road


Chinatown Gateway Plaza (1990)

1031 Nuuanu Avenue


Chinatown Manor (1993)

175 N. Hotel Street


Harbor Village (1991)

901 River Street


Kanoa Apartments (1955)

846 Kanoa Street


Kulana Nani (1972)

46-229 Kahuhipa Street


Manoa Gardens (1992)

2790 Kahaloa Drive


Marin Tower (1994)

60 N. Nimitz Highway


Pauahi Hale (1982)

126 N. Pauahi Street


West Loch Elderly (1993)

91-1450 to 91-1480 Renton Road


Westlake Apartments (1973)

3139 Ala Ilima Street 


Winston Hale (1964)

1055 River Street




Contact: Bill Brennan, 527-6928

Wednesday, February 20, 2008

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