The state plans to sell the 119-unit Wilikina Apartments in Wahiawa, hoping a new owner will be able to address a $6 million backlog in repairs while keeping rents affordable.

Wilikina residents welcome the proposal, saying a nonprofit with access to grants, loans and tax credits will likely be better able to address longstanding maintenance concerns.

"I wish they would just fix this place up," said Wilikina resident Ed Vance, who had to move with his severely ill wife and two grandchildren from a third-floor apartment after water started leaking through the walls from a pipe, damaging his unit and spurring mold growth.

Several other units are vacant for the same reason.

The Wilikina sale comes as the city is also preparing to put its 12 affordable housing properties on the market, and follows a national trend of privatizing public housing as government agencies struggle to maintain aging complexes with dwindling resources.

Housing advocates say successful sales could spur the state Public Housing Authority to consider selling other projects, especially those with big repair issues.

And, they add, privatization could be a positive development.

"It's mostly good to privatize," said Drew Astolfi, the lead organizer for Faith Action for Community Equity, which has pushed to both retain and build more affordable housing in the state. "But any privatization should have a bunch of limitations on it."

SHIFT IN POLICY

The national trend toward selling off public housing complexes, advocates say, signals a shift in public policy dating to the Great Depression, when the government pledged to provide a safety net — through low-cost housing and financial subsidies — for its citizens.

Though advocates say private entities — especially nonprofits — are better able to manage affordable housing properties, they also say any sale of affordable properties spurs concerns.

Those worries are perhaps nowhere more acute than in the Islands, where the lack of housing for low-income families is a major factor in the homeless crisis and one of the most pressing social welfare issues facing the state.

For now, the state housing authority says there are no plans to sell other buildings.

The agency is by far the largest affordable housing property owner in the state, with 67 federally subsidized and 14 state-subsidized complexes in the Islands. On O'ahu alone, there are 43 state and federal housing projects with a total of about 4,900 rental units.

Many of those projects were built in the 1960s and '70s, and are now facing big repair bills. A 2002 Housing Authority study estimated the state would have to spend about $655 million to address all the backlogged repairs at public housing complexes statewide.

The state spends about $12 million a year in capital improvements at public housing projects, but has recently received additional funding from the state Legislature for major projects, such as fixing elevators, garbage chutes and fire alarms at Kuhio Park Terrace in Kalihi.

The city, too, is suffering from backlogged maintenance — one of the main reasons cited for a phased sell-off of its affordable buildings, starting with Kulana Nani in Kane'ohe.

LOSING PROPOSITION

In 2006, the city got about $11 million in revenues from its 12 complexes, but spent about $14.5 million on operating expenses, maintenance costs and loan payments.

The last time the state sold a project was in 2002, when Mutual Housing Association of Hawai'i took over a portion of the Palolo Homes project. With grants and loans, the nonprofit was able to spend more than $13.5 million on the 306-unit complex. The complex, with its bright new roofs, graffiti-free walls and manicured lawns, now stands in contrast to its neighbor — the state-managed end of Palolo Homes, which has had no major work.

But Dave Nakamura, executive director of Mutual Housing, pointed out that privatization of affordable housing cannot work in all cases. Most importantly, a sale has to have the support of tenants — as they will be asked to take a bigger role in the complex, either by helping with cleanups, neighborhood watch programs or other volunteer programs.

The nonprofit was interested in taking over the remaining state-managed end of the Palolo complex, but dropped the plan after failing to get enough support from residents.

Nakamura said nonprofits or even for-profit entities are better able to manage public housing as they can access a variety of grants or other sources of money, which the state may not be able to get. He also said the state is often forced to pay more for services and maintenance work because of procurement laws and labor agreements.

RETAIN AFFORDABILITY

Chan U Lee, a San Francisco affordable housing consultant who is working with the tenants of the city-owned affordable housing complexes, said the ideal situation is to sell public housing properties to nonprofits that specialize in affordable housing.

"They do it well and they do it efficiently," she said, adding that any sale of affordable complexes should have strict regulations and should retain the same level of affordability.

The state plans to put Wilikina on the market as early as December, after a consultant finishes an appraisal of the property and determines the best way to sell it, said Linda Smith, a senior policy adviser to the governor and a member of the public housing authority board.

Smith said the state will lease the land under the building with restrictions to ensure it remains affordable. The state bought Wilikina in 1993 for $7.5 million, and also took over its $3.1 million mortgage. The mortgage has been paid off through revenues from rent.

"The purpose is not to make money," Smith said. "The purpose is really to turn this building over to a recognized entity that will keep this building affordable."

Wilikina was built in 1977.

State housing officials have said the cost to repair water pipe problems at Wilikina are estimated at $6 million. The building also needs extensive interior renovations.

Wilikina tenant Michael Slosek is looking forward to repairs.

Water has seeped through his walls, causing several large spots of mold damage. His bathroom sink nearly fell off the wall last week, and is being held up with large buckets.

"It's a lot of little things," said Slosek, who lives at Wilikina with his wife and three daughters — 14, 4 and 2 months. The family has been there for seven years, and now pays about $600 a month. Slosek said he applied for a Section 8 voucher and tried to move elsewhere a couple years ago, but couldn't find a new place within his budget.

"I'd like to stay," said Slosek.

Reach Mary Vorsino at mvorsino@honoluluadvertiser.com.