State selects leasehold partner for rental housing portfolio restructuring and preservation
HONOLULU – The Hawaii Housing Finance and Development Corporation (HHFDC) Board of Directors has selected Nou ka Hale, a joint venture between local developer Stanford Carr Development LLC and Los Angeles-based Standard Communities, as its leasehold partner for the state’s Affordable Rental Housing Portfolio.
The portfolio consists of six affordable rental housing properties with 1,221 residential units and approximately 86,000 square feet of commercial space. The properties include Honokowai Kauhale in Lahaina, 184 family units; Lailani Apartments in Kailua-Kona, Hawaii, 200 family units; Pohulani Elderly in Kakaako, Oahu, 263 elderly units; Kauhale Kakaako in Kakaako, 68 family units; Kamakee Vista in Kakaako, 226 family units; and Kekuilani Courts in Kapolei, Oahu, 80 family units. ?
Rents at the properties will remain affordable throughout the terms of the 75-year ground leases, with maximum rents of no greater than either 80 or 100 percent of the U.S. Department of Housing and Urban Development Area Median Income (AMI) rent guidelines. Additionally, current residents at all of the properties will now be protected from large rent spikes going forward, and they will be allowed to stay in their homes indefinitely.
For current residents at Pohulani Elderly, annual rent increases will be restricted to no more than 2 percent for the duration of the tenants’ residencies. For current residents at the five family properties, annual rent increases will be restricted to no more than 2 percent for the next five years and 5 percent for the subsequent 30 years.
In connection with the portfolio restructuring and preservation, the HHFDC board awarded project-based Rental Assistance Program (RAP) contracts to Nou ka Hale.
The contracts provide rent subsidies for households that currently participate in the program and earn less than 80 percent of the AMI, with the intent that residents will be able to stay in their homes for as long as they choose due to the subsidy. ?
At Pohulani Elderly, HHFDC will provide an initial 20-year RAP contract that increases the maximum monthly subsidy from $250 to $300. ?
At the four family properties where RAP subsidies are currently offered, HHFDC will provide ten-year RAP contracts that increase the maximum monthly subsidy from $175 to $225. In the sixth year of the contract, the maximum monthly subsidy will increase to $500. ?
At Kekuilani Courts, where RAP subsidies are not currently offered, HHFDC will provide a five-year RAP contract through which a subsidy of up to $500 per month will be available to qualified residents beginning in 2023.
Nou ka Hale has committed to a $53.9 million capital improvement program that will include renovations to both apartment units and common areas.
Improvements will include upgrades of finishes and fixtures in the living units. Common areas will be refreshed, and community rooms will be renovated to support additional community programming and activities. In addition, building systems that are antiquated will be repaired.
Additionally, Nou ka Hale will offer to residents a package of community programming that enriches their lives, with focus on after-school academic programming, adult education classes, financial literacy and wellness programming for residents of all ages.
Standard Communities Co-founder Jeff Jaeger said, “We are excited to partner with HHFDC for this transaction to accomplish our shared goal of providing high-quality affordable housing, which these properties will certainly be following the planned renovations, to residents who need it most. This is a rare opportunity to have a positive impact on more than 1,200 families, and we look forward to doing so in the years to come. While we are busy improving these properties, HHFDC will be putting the proceeds of the transaction to work for the benefit of thousands of additional Hawaii families.”