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The Honolulu Advertiser

Posted on: Saturday, June 18, 2005

492 affordable homes to be built in Kapolei

By Andrew Gomes
Advertiser Staff Writer

The state has selected Castle & Cooke Homes to develop the last major installment of affordable housing at the state's master-planned community Villages of Kapolei.

Availability of affordable homes

How many: 287 rentals, 205 for sale

For: People earning 60 percent to 140 percent of the annual Honolulu household median income, which this year would be $40,680 to $94,850 for a family of four

When: Homes won't be available until next year

Pricing: To be determined

Castle & Cooke plans to build 492 townhomes for rent and for sale over four years. The sites are three parcels of state land within the A'eloa, Iwalani and Malu'ohai subdivisions, also known as villages 2, 5 and 6.

The project will help ease the overwhelming shortage of affordable rentals and for-sale housing on O'ahu, and nearly complete residential development at the Villages of Kapolei.

According to a study conducted for the state, there is a need for 30,000 affordable-housing units statewide — 17,000 rentals and 13,000 homes for purchase.

Construction is anticipated to start on the first homes in July 2006, with the first units ready for occupancy between July and September 2007. Completion of all homes is forecast for June 2010.

The Housing and Community Development Corp. of Hawai'i in May solicited developers to build affordable housing on the three Kapolei parcels covering 20 acres, seeking the maximum number of units at the lowest expense to the state.

Castle & Cooke's bid, which estimates total project development cost at $108 million, involves private financing with some proposed state tax-credit financing. The state is contributing the land.

Gov. Linda Lingle in a statement said the project demonstrates her administration's commitment to create more affordable housing units. "We are excited to move forward with this project in Kapolei," she said.

About 60 percent, or 287, of the homes will be rental units, with the other 205 sold fee-simple.

The homes are reserved for people with income levels between 60 percent and 140 percent of the annual household median income in Honolulu, which this year equates to $40,680 to $94,850 for a family of four.

Home prices will depend on median income levels and interest rates at the time homes become available.

If they were available today, monthly rent for 143 homes would range from $711 for a studio up to $1,964 for a 4-bedroom unit for those earning $40,680 to about $47,000.

Monthly rent for another 144 units would range from $948 to $1,185 for studios on up to $1,572 to $1,964 for 4-bedroom units for families earning $54,250 to $67,750.

Sale prices for the 205 homes assuming a 6 percent mortgage rate range from about $333,000 to $389,000 for families earning $81,300 to $94,850.

Castle & Cooke said it will not be ready to accept applications from buyers and renters until next year, but looks forward to bringing the homes to the market.

"We are very excited to work with the state in developing affordable homes for Hawai'i's people, and it is something we have been doing for a long time," Alan Arakawa, Castle & Cooke senior vice president of residential operations, said in a statement.

Castle & Cooke developed the first residential subdivision at the Villages of Kapolei, and is also the master developer of Mililani and Royal Kunia.

For the current project, the company's proposal was selected over proposals by Texas-based D.R. Horton's local Schuler Division, California-based Enhanced Affordable Development Co. LLC and another California firm, UniDev LLC.

Villages of Kapolei comprises eight residential subdivisions with roughly 3,000 homes plus parks, a golf course and commercial center on 880 acres of state land.

The last village, Kaupe'a, also known as Village 8, broke ground last year. It is a 326-lot project on 53 acres being developed by the state Department of Hawaiian Home Lands. The first Kaupe'a homes are expected to be complete in spring 2006.

The remaining undeveloped property at the Villages of Kapolei is mainly for commercial development, though there is room for a relatively few more single-family homes. The entire master-planned community is expected to be completely built out over the next five years.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.