Council favors end to condo law
By Gordon Y.K. Pang
Advertiser Capitol Bureau
A bill that would repeal the city's controversial mandatory leasehold conversion law for condominiums was given preliminary approval by the City Council yesterday, 7-2.
Andrew Shimabuku • The Honolulu Advertiser
More than 200 opponents of the law held a rally, chanted and carried signs supporting Bill 53 in the City Hall courtyard as deliberations took place in the council's chambers.
Students from the Halau Lokahi Public Charter School were among the community members who appeared yesterday in City Council chambers to show support for a bill repealing mandatory leasehold conversion. The council gave preliminary approval to the repeal, 7-2.
Among those rallying in support of the bill were Native Hawaiian students who say the Hawaiian ali'i trusts that pay for their programs such as Kamehameha Schools and the Queen Lili'uokalani Trust are being hurt by the law.
While the bill still faces a series of committee and full council meetings, yesterday marked the first time a majority of council members voted to reject a law that has been on the books since 1991. The two dissenting votes came from Charles Djou and Gary Okino.
The city's mandatory leasehold conversion law allows those with leasehold interests in condominiums to petition the city to use its condemnation powers to force a landowner to sell qualified condominium owners the fee interest in the land under their units at a price determined by a third party.
Supporters of the law say it serves a public interest and has helped thousands to achieve home ownership by allowing lessees to negotiate a reasonable price with landowners that could not have been achieved otherwise.
OKINO
DJOU
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Opponents say the law abuses the city's powers of eminent domain and helps a few win an unfair advantage in negotiations while forcing law-abiding landowners to give up their interests.
More than 30 people testified about the bill, with a large majority in support of it.
"We are hopeful that this council will cease to be a party to legalized theft," said Vicky Holt Takamine, president of 'Ilio'ulaokalani Coalition, an organization dedicated to preserving Native Hawaiian rights. "We are hopeful that this council will see this practice for what it really is — taking from the poor and the needy children of Hawai'i to fill the pockets of the rich."
Small landowner Phyllis Zerbe called the law "unconscionable" and an abuse of the city's authority, when leasehold condominium units have provided lessees with "fixed, low-lease rents."
Several lessees testified against the bill, arguing that without the law, reversionary or surrender clauses in leasehold condominium contracts could leave lessees out of their homes.
Michael Pang, a real estate agent who handles many conversion applications, urged council members to defer the bill and allow a task force convened by the council to explore changes to the law that would lessen the impacts for both sides.
Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com or at 525-8070.
