Affordable housing dilemma for County of Kaua‘i

LIHU‘E — Kaua‘i County Council Chair Mel Rapozo will introduce a resolution next month urging the county to buy the Courtyards at Waipouli apartments, following the state’s decision against purchasing the roughly $43 million development for affordable housing.

“This is a project that’s already built. Infrastructure’s in place, tenants are already in there. I would consider this low-hanging fruit,” said Rapozo in an interview with The Garden Island on Tuesday.

Affordable housing advocates have held multiple press conferences over the last couple of months calling for the state to buy the 82-unit housing development, which is currently on the market with a list price of $43 million.

The two-story complex was built in 2009 under the Kaua‘i Lagoons Affordable Housing Agreement, which meant its owner, KD Waipouli LLC, was required to charge affordable rents for 41 — or 50 percent — of the 82 units for the first 10 years after its construction was completed.

When the affordability restriction expired in August 2019, the county declined to purchase the property through a first-right-to-purchase clause.

In February, Ikaika ‘Ohana, a nonprofit affordable housing developer based in Maui, submitted an application to the Hawai‘i Housing Finance and Development Corporation (HHFDC) asking the state to purchase the property through the use of federal and low income tax credits and secure all units as affordable housing for 60 years.

But at the most recent press conference on Aug. 11, Kenna StormoGipson, an affordable housing researcher, announced the application had not been selected by the HHFDC.

“They had about 30 applications, and they only funded six,” said StormoGipson at the event. “So we did not make it this year.”

Rapozo announced his plans for a county resolution to purchase the property during the event, but said the decision lies with the administration.

“I’ll commit to you today, not that we’re gonna get it done because I cannot. But I will commit to you that our council will do our best to make sure we do our best to try to encourage our administration to rethink this,” he said.

However, according to county Public Information Officer Kim Tamaoka, the county administration does not intend to purchase the property and was unaware of the resolution.

“The administration does not have plans to purchase the property and instead supports the purchase by a private entity in efforts to keep these units affordable,” said Tamaoka in an email response.

Tamaoka also said the mayor’s office was not aware of any discussions or proposals from the council to purchase the property until it was contacted by The Garden Island. The mayor’s office has also not seen a copy of the resolution.

Tamaoka added that Mayor Derek S.K. Kawakami was currently unavailable, as he is traveling out of state.

But StormoGipson believes the county is responsible for purchasing the apartments and keeping them affordable.

“The county was the one that originally put the affordable housing covenant on the building,” she said in an interview with The Garden Island after the conference.

“The county absolutely can purchase it, and I think it is the county’s responsibility to basically create affordable housing by any means necessary.”

Purchasing the property would cost the county roughly $525,000 per apartment, which StormoGipson noted is cheaper compared to building new developments.

The approved Kai Olina Phase II, a plan to add a 27-unit apartment building to an affordable housing development in ‘Ele‘ele, will cost nearly $798,000 per unit, and the Uahi Ridge 96-unit development in Lihu‘e will cost over $687,000 per unit, according to their respective project applications.

StormoGipson also noted that building new developments takes more time and resources, compared to using existing structures.

“Construction costs are so high and land is so limited. And now with Maui (wildfires), everything’s going to take even longer. I just hope that they really take advantage of these kinds of opportunities,” she said.

Rapozo also noted the additional efforts, time and costs that come with building new affordable housing developments and added there’s a “sense of urgency” to acquire the 82 units.

“Do we let a private buyer purchase and convert that into short-term rentals or timeshare? Or do we make an honest effort and try to keep it affordable? You know, obviously, my position is that we should do whatever it takes to acquire that property,” he said.

“Ideally, the state and the county could partner and figure out a way to get it done. And that’s the discussion we’ll have when we have the resolution.”

The resolution is scheduled to be introduced at the council meeting on Sept. 20.

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Emma Grunwald, reporter, can be reached 808-652-0638 or egrunwald@thegardenisland.com.