Private sector to operate Hawai'i military housing
By Scott Ishikawa
Advertiser Staff Writer
The military in Hawai'i will begin privatizing on-base housing units starting next year at Hickam Air Force Base as part of a push to improve antiquated military family housing across the nation.
A private developer would own, operate and make its own improvements to 1,356 Hickam homes under a proposed deal that is the first step in turning over 11,500 base homes in Hawai'i. Privatization will help reduce the backlog of renovations for many sections of aging military housing.
The privatization plan is good news for the local construction industry, which has helped keep the state economy afloat since Sept. 11, economist Leroy Laney said.
"It's a project not related to tourism, which will help during this particular recession that is tourism-related," said Laney, an economics professor at Hawai'i Pacific University and former chief economist for First Hawaiian Bank.
The private sector is often more efficient in operating programs, and privatization reduces the drain on tax revenue needed to pay for government construction, Laney said.
"It also means we can count on the military to remain here," he said. "Basically, the more outside money pumped into the local economy, the better."
A deal between Hickam officials and a developer could be finalized by the end of the year, with construction to follow six months after, said Hickam spokesman Maj. Stephen Clutter. Clutter estimated that renovation work at Hickam that would have taken about 25 years using federal money would be reduced to eight years under the changeover to the private sector. The Hickam project would have cost the government $170 million in construction, he added.
"The difficulty is you don't know how much money you're going to get each year from the federal government," particularly with the tight economy following Sept. 11, Clutter said.
Clutter said the deal would require developers responsible for the money to build 16 new Hickam units and renovate another 986 existing units. The developer would maintain and manage all units for 50 years and would collect rent from the military families on the two- to four-bedroom units.
Because the units would still be classified as military housing, a cap on rents would continue to make it affordable for military families, who would be responsible for paying rent from their housing allowance.
"(Military personnel) can still live off-base if they want to, but we're trying to make it more attractive here so families can stay on base closer to work, and enjoy the other amenities," Clutter said.
Army officials within the next two years also will begin privatizing nearly all of its on-base family housing units at Schofield Barracks and Fort Shafter.
While a specific time line has yet to be released on the privatization of Army housing — with some of the units dating back to World War II — the process "won't happen overnight and will take a number of years," said Troy Griffin, deputy public affairs officer for U.S. Army, Hawai'i.
The Department of Defense, according to a report on its Web site, said the privatization of another 1,978 military housing units on O'ahu is also planned.
Hawai'i Navy officials said they are conducting a study regarding privatization for their housing on O'ahu, but said the report is in the preliminary stages. The Navy has approximately 7,000 family housing units on the island.
The military began privatizing base homes on the Mainland in 1996 after then-President Bill Clinton signed the National Defense Authorization Act. So far, about 17,400 military homes have been privatized. Renovations began with a pilot project in 1999 of 500 homes in Fort Hood, Texas.
Reach Scott Ishikawa at sishikawa@honoluluadvertiser.com or 535-2429.
