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The Honolulu Advertiser
Posted on: Friday, March 10, 2006

Sale could worsen O'ahu homeless crisis

By The Rev. Bob Nakata

The 857 families who live in the Kukui Gardens complex in downtown Honolulu, more than 3,000 people, can look across the street at 'A'ala Park to see the fate of many of them as they are displaced from affordable rentals into a housing market that has devastated the lower-income population on O'ahu.

Kukui Gardens is an 857-unit, federally subsidized, privately owned affordable-housing complex. The Housing and Urban Development mortgage subsidy allowed the owners to build the complex at no cost to them, and in return the owners agreed to keep the property affordable for the entire term of the mortgage.

The project was built in the late 1960s and is an important housing resource for Chinatown. The Clarence Ching Foundation and the charities it supports benefit from the project. The HUD mortgage is set to expire in 2011 and with it any affordability restrictions.

Kukui Gardens is now in the process of being sold to the highest bidder. Its broker began collecting purchase offers for the property last month and was instructed to narrow the field of current bidders to a smaller select group this week.

Similar projects around the country have been preserved by nonprofit and/or for-profit buyers. A good local example is nearby Kukui Towers. Unfortunately, transactions that prioritize affordability require a complex assembly of private and public dollars and take time commonly six months to a year to complete.

The owners and board of directors of Kukui Gardens have refused to slow down the sale to allow a nonprofit or a for-profit aimed at keeping the place affordable to make an offer.

While a nonprofit or for-profit prioritizing an affordability sale is feasible and could be competitive with most for-profits, the terms that the sale is proceeding under will not allow any deal that preserves affordability to occur.

The owners have been quoted publicly as saying that the proceeds of the sale will go to recapitalize the foundation, which supports a number of worthy local charities, including prominent healthcare and educational institutions that have a direct legal and controlling interest in the sale.

No matter how worthy the recipients of the profits from the sale of Kukui Gardens, they will be benefiting at the expense of 857 families.

No matter how laudable the work of these charities, it will be at the expense of 857 families and adding to O'ahu's homeless population.

No one is objecting to the sale of Kukui Gardens or that it is sold for a sizable profit. Just that the sale be slowed down to allow a nonprofit or for-profit prioritizing affordability the time to put together the complex assembly of private and public dollars to compete in making an offer.

The charities that will benefit financially from this sale must demand the owners and board of directors slow down the sale process to reasonably allow those who would keep the rentals affordable to compete.

The possibility of continued affordable rentals should be a priority for any charity. No charity should finance good works by fueling O'ahu's growing housing crisis and making families homeless.

The Rev. Bob Nakata is an advocate for the homeless. He wrote this commentary for The Advertiser.