Posted on: Friday, January 21, 2005

ISLAND VOICES

By Ray Soon

The debate over forced condominium leasehold conversion continues to stir strong emotions from everyone affected by the issue. On Wednesday, the City Council will hold a third and final hearing on Bill 53, which would repeal Chapter 38. The time has come to put an end to this ordinance.

Forced conversion is unjust and unfair. Chapter 38 continues a painful practice of forcing private landowners to sell their lands to other private citizens. This injustice is compounded because the people it hurts most are small landowners and Hawai'i's ali'i trusts, which rely on the income from properties for a wide range of vital programs that improve the lives of thousands of Native Hawaiians.

The case against this egregious injustice has been made by others. But there are also several other good reasons we should repeal this ill-conceived law:

• Chapter 38 wastes taxpayer dollars. Since 1991, the City and County of Honolulu has, under this law, had to pay well over $1.2 million to reimburse the legal fees of landowners who successfully fought efforts to condemn their property. Taxpayers' money eaten up by this frivolous Chapter 38 litigation could have been spent instead on things that serve the public — improving traffic signals and street lighting, constructing new bus stops, and improving community park and recreation programs, to name just a few.

The courts have found blatant attempts by lessees to abuse the law. For example, one of Chapter 38's requirements is that lessees pursuing condemnation may not own any other fee-simple property. Yet, some lessees have tried to get around this by concealing other property they own. In one case, a couple made a $1.2 million profit by selling a Makiki Heights residence while at the same time trying to force the condemnation of their leasehold condominium unit. In another case, several lessees who owned and rented out multiple residential units in Windward O'ahu filed for condemnation of leasehold property on which they resided. The court dismissed these and many similar cases.

When cases such as these are dismissed, the city is obliged to reimburse the landowner's defense fees. Over the years, this has created substantial legal and administrative costs for Honolulu's taxpayers. Until Chapter 38 is repealed, these costs will only continue to grow.

• Chapter 38 benefits few people. Of the 104,000 condominiums on O'ahu, only 23,000 are leasehold. And of that, fewer than 1,200 units qualify for condemnation under Chapter 38. And with no new leasehold projects being built today, there is no need for Chapter 38. In Honolulu, condo conversions can and regularly do take place voluntarily.

• Chapter 38 hurts more people than it helps. On the other hand, small landowners face potentially devastating losses when they lose their property. For many families, land assets are their sole source of income. What are they supposed to do if they are forced to sell their property? Chapter 38 also threatens the legacies of Hawai'i's charitable organizations, which serve thousands of people each year with educational programs and social services. The continuance of these programs serves a far greater public purpose than keeping alive a law that, at best, might benefit a handful of people.

A paramount task lies ahead for our City Council leaders. So much has been said and written about Chapter 38, both good and bad. We understand this is a difficult decision to make. But the time has come to take action. It's time to repeal Chapter 38.

Ray Soon is vice president for community relations and communications, Kamehameha Schools. He wrote this article for The Advertiser.