- Special Projects
From his office window on the 31st floor of a downtown Honolulu high rise, Ben Lee can see housing developments the city helped build during his 20 years working under former mayors Jeremy Harris and Frank Fasi.
Lee, an architect by trade, served as city managing director under Harris. He oversaw the re-organization of city government in 1998, in which the city abolished the 100-person Housing Department.
The department had been in charge of building and maintaining affordable housing, such as Marin Tower in downtown Honolulu and West Loch housing in Ewa Beach.
At the time, Lee had misgivings about getting rid of the department entirely, but he says now that he didn’t have much choice, given political pressure from the Honolulu City Council and developers.
The department had come under fire due to a corruption scandal that involved the misuse of millions of dollars of federal funds. Lee recalls developers also argued that city housing projects were competing with them unnecessarily and that the private sector could meet the demand for affordable housing.
Hawaii has the highest rate of homelessness per capita in the nation, and a survey by the nonprofit advocacy group PHOCUSED found more than a quarter of people living on the streets say they couldn’t afford rent.
The crisis has spurred calls for the city to resurrect its housing department, or at least some form of it.
Current efforts to promote and manage affordable housing are fractured across various departments. And while state studies underscore the urgent need to build more housing, there’s no agency within the City and County of Honolulu officially charged with creating any.
It isn’t unusual for cities and counties across the U.S. to split up some housing-related functions. But Ethan Handelman, from the Washington, D.C.-based nonprofit National Housing Conference, said the municipalities that are doing the most innovative work on housing generally have dedicated staff.
Honolulu Mayor Kirk Caldwell has tried unsuccessfully since 2014 to convince the Council to fund an Office of Strategic Development that would take charge of developing city land into housing for homeless and low-income people.
His latest request, for $477,000, would fund eight staff positions within a new asset development and management division under the Department of Community Services. The team would acquire land, select developers and oversee project developments.
But Council members have criticized the mayor for not offering specifics about the purpose of and need for the new division; and several have lambasted his existing staff for not doing enough to address the housing crisis.
Council Chair Ernie Martin, who is considering running for mayor this year, said last week that he’d prefer to beef up the mayor’s Office of Housing, which only has two staff members.
He’s proposing spending $150,000 to add two more positions that office, which focuses on developing policy and coordinating affordable housing efforts across city departments.
Martin said he thinks adding eight new staff positions is “premature,” and that the city should rely more on its current staff.
“In the existing city administration you have two former housing directors who are not serving as cabinet-level positions who were with the city at the peak of housing development,” he said.
The mayor’s spokesman, Andrew Pereira, said in an email that both of those staff members currently lead divisions that manage the Section 8 rental-subsidy program and federal housing grants. Switching them to the new division would create vacancies that the city would need to fill, he wrote.
Some Council members have sought a compromise. In his latest proposed budget amendments, Councilman Brandon Elefante from Aiea suggested spending $180,000 for three full-time jobs in a new division.
Councilwoman Kymberly Pine from West Oahu suggested spending $238,845 to fund four temporary positions in the new division through personal service contracts. Councilman Trevor Ozawa from East Honolulu suggested funding $200,000 for three temporary employees in lieu of the new division.
Council members have until June to finalize a budget to send to the mayor for approval. But it’s unlikely the mayor will get what he wants. The budget request has been a source of tension between Martin and Caldwell, who is running for re-election this year, since the mayor announced the proposal nearly two months ago.
Voters may get to sidestep the politics this fall through the Honolulu Charter Commission, which meets once a decade. The commission is mulling over five proposals to re-establish a city housing department or give that responsibility to existing agencies.
One proposal, submitted by Charter Commission member Keith Mulligan, would re-establish the city’s housing agency. Another, submitted anonymously, seeks to change the Office of Housing into a “department with powers to make things happen.”
Three more proposals by the American Planning Association, Carolyn Weygan-Hildebrand and City Councilman Ron Menor would centralize the city’s housing functions within the Department of Community Services.
A sub-group at the commission is reviewing the proposals and plans to make a recommendation this week regarding whether any should be placed on the ballot.
Lee says it doesn’t matter what form a new agency takes, as long as the team is motivated.
“There needs to be a focus. It needs to be aggressive,” Lee said. “All I can say is, ‘Hurry up and do it.'”
But there are good reasons why city legislators might hesitate to establish a new housing agency.
Apart from raising the ire of developers, the old housing department was notorious for a corruption scandal that cost the city millions.
Former city housing official Michael Kahapea was arrested in 1997 and found guilty in 2000 of theft, money-laundering and forgery, after he embezzled funds intended for revitalizing homes at Ewa Villages.
The scandal fueled calls to reorganize city government to ensure that there would be greater fiscal oversight. To save money and streamline city services, Honolulu consolidated several agencies and abolished the housing department.
Housing Department employees were scattered to other agencies, “with the objective of not getting involved in building and developing new housing projects,” explained Malcolm Tom, who served as budget director during Mayor Harris’ administration during the reorganization.
Responsibilities for developing and managing housing are still split among city agencies.
• Today, the Department of Planning and Permitting manages the city affordable-housing requirements that apply to developers who receive rezoning approval.
• The Department of Budget & Fiscal Services is in charge of fiscal management for federal affordable-housing grants, including the Community Development Block Grant Program.
• The Department of Community Services administers federal grants as well, along with housing loan programs and the Section 8 rental subsidy program.
• The Department of Facilities Maintenance is in charge of property management for existing city affordable-housing properties.
• The Office of Housing, which voters created in 2007, develops policies such as expanding the city’s affordable housing requirement and using Housing First to alleviate homelessness. It has a staff of two: executive director Jun Yang and a secretary.
• Caldwell’s Office of Strategic Development, a two-person team he established in 2014, despite the Council’s refusal to fund it, by using money from vacant positions. The office has been working on identifying land where the city can partner with developers to build homes for homeless or low-income people.
Caldwell’s vision for the new asset development and management division is an eight-person team that would manage the city’s affordable housing properties and partner with developers to build new ones.
A good example of what he has in mind is the proposed senior housing project on River Street that the Council considered and deferred last Wednesday. The city issued a request for proposals to redevelop city-owned commercial property in the heart of Chinatown, and selected Michaels Development to build and manage the housing.
City Managing Director Roy Amemiya said that’s the type of development the new office seeks to do — a model that subsidizes and facilitates housing without saddling the city with management responsibilities and maintenance costs.
Amemiya worked in the Harris administration until 2000, returning to the city in 2015 to work for Caldwell.
“When I returned a year ago, many of the parcels that we should have developed as a city were not developed,” he said at a recent Council meeting. He listed the Aiea sugar mill, Verona Village, and city property in Kapolei. “They’re just going to stay fallow without any development until the city understands that we need people to put those assets into production.”
In addition to facilitating the development of housing, additional staff members would be expected to help oversee property management at the city’s 12 affordable-housing projects, which Amemiya describes as “undermanaged.”
Just three employees, who work in the Property Management Branch at the city’s Department of Facilities Maintenance, currently manage those projects. They also handle maintenance at some city parcels, oversee irrigation systems in Ewa Villages and West Loch, and work with residential and commercial tenants at other city properties including Maunakea Marketplace in Chinatown.
Amemiya said there’s a need for monitoring to make sure all tenants in the city’s affordable housing properties qualify to live in the developments. He also said the new staff could take a look at the existing costs and make sure that the city isn’t over-subsidizing the developments.
The city has been paying $17,500 per month to subsidize Winston Hale, an affordable-housing apartment complex on River Street that is undergoing renovation, and from $10,000 to $12,000 per month to subsidize Pauahi Hale, another affordable housing project in Chinatown.
Mortgage and bond repayments for all 12 properties cost the city up to $7 million per year.
Affordable housing advocates, both locally and across the U.S., say it’s a good idea to have dedicated staff who can identify public lands that can be used for affordable housing development.
“Generally speaking, when a state or locality wants to engage with developers … having dedicated staff who really understand development is powerful,” said Handelman, from the National Housing Conference. “Having an empowered city agency with staff who really know their stuff could make a big difference in creating affordable housing.”
Jennifer Dolin is vice president of operations at the housing nonprofit Mercy Housing, which works in numerous cities, including Los Angeles, San Francisco and Sacramento.
“Each of those jurisdictions does have a very strong arm … that’s dedicated to housing and community development,” she said. “I would say our more successful opportunities in doing (affordable housing) work tends to be when there’s a separate office dedicated to doing that work.”
Using public land for affordable housing development is an increasingly popular strategy in high-cost markets, said Virginia-based consultant Lisa Sturtevant.
“Places that are doing this are places that are really leaders in affordable housing policy,” she said.
Sturtevant noted that it makes sense to prioritize this now that Honolulu is building a $6.6 billion rail project, because the new rail line might drive up property values, and low-income housing near the rail line may increase ridership.
The city owns 417 acres of land within a half-mile radius of the 20-mile planned rail line.
Ali Solis, from the nonprofit Enterprise Community Partners, echoed Sturtevant; but she emphasized that it’s important any new staff members are “part of a larger plan to really provide affordable housing.”
She cited the city of Denver, where the mayor set a goal of building 20,000 new affordable homes in the next decade. In New York, Mayor Bill de Blasio promised to create 80,000 new affordable housing units in the next 10 years.
A spokesman for Caldwell said the mayor’s goal is to maximize $64 million in city capital-improvement funds to create affordable housing. He doesn’t have a set number for how many new units his new staff members would create.
Dean Uchida, a land-use expert at the Honolulu-based firm SSFM International, thinks setting a goal for the number of units a new division would help build would “quell some of the back and forth between the mayor and the Council” and provide some accountability.
“You have to have some measure of performance,” he said. “The public shouldn’t be giving money because people say they are going to try and do something.”
If voters are wondering what a new housing division might look like, they could look to the neighbor islands.
Kevin Carney, an affordable-housing developer at the nonprofit EAH Housing, said the city’s fractured housing responsibilities means there’s a world of difference building low-income rentals in Honolulu compared to the neighbor islands.
“It’s not necessarily any faster on the outer islands, but the people who are working there have a more well rounded base of housing (knowledge) and what developers need,” he said. “The city has that, but it’s segmented.”
Gary Mackler, Kauai County’s housing development coordinator, said his division’s responsibilities vary, and include managing federal grants and helping expedite permits for developers who are providing affordable housing.
Over the last 15 years, the division has sharpened its focus on using public land to build low-income housing, he said.
A senior housing project that will add 30 units to an existing 60-unit development recently broke ground, and another 130-unit project is in the works.
“We are really focused on increasing inventory at every chance we have,” Mackler said. “Without that, we’re stuck in the mud.”
That’s what real estate consultant Ricky Cassiday said Honolulu needs.
“Coming out of the last housing department, no way I wanted one,” he said. But now he’s changed his mind.
“The magnitude of the problem,” he said, “requires taking this seriously.”