63 win chance to buy for less at Keola La'i tower
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By Andrew Gomes
Advertiser Staff Writer
By Andrew Gomes
Kristina Chang wished she was Christine Chang yesterday.
Christine Chang was one of 63 lucky entrants selected yesterday via lottery to buy a unit in the luxury condominium tower Keola La'i in Kaka'ako for a discounted price.
Kristina Chang and 541 unfortunate others drew low numbers in the lottery in which 605 entrants had about 1-in-10 odds of being guaranteed a unit.
"Damn, I'm so bummed," Kristina Chang said after enduring a suspenseful 30-minute drawing when she thought maybe the eighth announced pick, Christine Chang, was a mispronunciation of her name. A sales agent confirmed otherwise.
"It's so hard to find property here, and to find something you like at a price you can afford," said the unlucky Chang, a 26-year-old sales agent for Kraft Food Service who lives with her parents. "It (was) a chance for me to grow up and spread my wings."
Interest in the units sold yesterday demonstrated that in addition to there being a critical shortage of affordable housing in Hawai'i, there is also strong demand for moderate-priced homes.
Applications for the discounted Keola La'i units were accepted from Nov. 26 to Dec. 10. Prices ranged from $275,000 to $375,000 for mainly lower-floor units with one or two bedrooms and 675 to 900 square feet of living space.
The units aren't considered affordable for most local residents, but they are a relative bargain by Hawai'i real estate standards.
Previously owned condos on O'ahu, many of them decades old in less desirable neighborhoods, have sold this year for a median price around $310,000, meaning half sold for more and half for less.
Similar market-priced units in Keola La'i, which has 352 units and is under construction on South Street between Queen and Kawaiaha'o streets, range from $400,000 to $600,000.
The 63 below-market units were sold via lottery under special rules for development in Kaka'ako governed by the Hawai'i Community Development Authority, a state agency.
Under the rules, Keola La'i developer Alexander & Baldwin Inc. was allowed to build the 42-story tower above the area's standard height limit in exchange for selling a portion of units at moderate prices.
The rules aim to provide housing that's affordable for "gap group" residents who earn too much to qualify for government assistance but not enough to qualify for a loan for a market-priced home.
Discounted Keola La'i units were limited to Hawai'i residents who haven't owned a home in at least three years and don't earn more than $84,688 for singles, or $94,850 for a family of two or more.
Kristoffer Pascual, a 29-year-old accountant, was disappointed his name wasn't among the first 100 pulled in the lottery. He had hoped to move with his fiancee from a downtown rental into Keola La'i.
"I might be considering moving to the Mainland," he said. "The (price of) housing is ridiculous here. I don't know how someone is supposed to live."
Of the 605 lottery entrants, about 100 showed up to witness the event inside Keola La'i's sales office at 676 Queen St., next to the rising tower slated for completion in early 2008. But with 1-in-10 odds, most of them didn't fare well.
After calling 60 names, lottery announcer Tracy Yamato, an agent with the project's broker, Coldwell Banker Pacific Properties, asked if anyone present had been called. The audience responded with a collective "no."
"I want someone here to get a number," Yamato said. "I'm trying."
It took another 10 selections from a barrel of entries for Yamato to call someone who acknowledged being picked, drawing applause from the crowd.
Actually, Roland Louie, a retired Verizon employee from Kapolei, received the applause for his son, Arthur Louie, who was the 70th name picked in the lottery.
"I'm so happy he got it," Roland Louie said of his son, a 32-year-old technology support employee for TheBus. "Housing is so expensive. They can't afford it, the young people."
Despite being the 70th pick, Arthur Louie has a good chance that at least seven buyers selected ahead of him won't buy one of the 63 units available.
Under the sales process, the No. 1 lottery pick gets to pick among the available units, narrowing the choice for those who follow.
Unit selections aren't scheduled to start until Jan. 13, but typically some buyers decline to purchase or are limited by mortgage qualifications as to which units they can buy.
Overall, the 1-in-10 odds of buying a discounted Keola La'i unit yesterday was slightly better than 1-in-13 odds for an initial batch of units in the building sold by lottery at market prices last year.
A July 2005 lottery attracted about 1,100 entries for 85 units. Prices at the time ranged from about $340,000 to the mid-$800,000s for one- to three-bedroom units. Prices have been raised since then, and about 30 units remain unsold for $470,000 to $1.2 million.
The slightly better odds for below-market units may have been influenced by income limits and other restrictions that limited the number of applicants for yesterday's lottery.
Among some of the other restrictions are a prohibition on renting the units, and a right for the state to buy the unit back at a below-market price if the unit is sold within two years.
The state also is entitled to a share of proceeds from units sold by initial buyers regardless of time. The share ranges from $93,320 to $127,528 for one-bedroom units, and $92,611 to $216,050 for two-bedroom units.
Reach Andrew Gomes at email@example.com.