Barbara Henny is one of many elderly tenants of Front Street Apartments whose life was upended in the last two years.

In 2016, Henny and other tenants found out the rents at their subsidized housing complex in Lahaina will be raised to market rate levels by August  2019 — 32 years sooner than expected.

Henny has since assumed a leadership role among the complex’s more than 250 residents. She runs around sticking flyers on doors and organizes monthly meetings at a nearby church.

Front Street Apartments, built in 2001 using state and federal low income housing tax credits, has also received more than $2 million in property tax breaks.

Courtesy of Anna Barbeau

“It’s always on my mind,” said Henny, 70. “I wake up in the morning and I think ‘Oh my god’ … a lot of us came here thinking this would be the final move in our life.”

These days, she focuses her efforts on mobilizing her neighbors to support Senate Bill 2993, which would allow the Hawaii Housing Finance and Development Corp. to use eminent domain to acquire the property if the state agency can’t find money for rental assistance or strike a deal with the land owner. A similar bill died in committee last session.

“It’s pretty dismal,” Henny said during a March Labor and Public Employment Committee hearing. “People are getting stressed and sick.”

State and county officials say there are no other options to relocate the tenants. Some have signed up on years-long waiting lists for other affordable housing options.

Front Street Apartments, a 142-unit complex, was built in 2001 using low-income housing tax credits that required the developer to keep the units affordable until 2051. Maui County also waived more than $2 million in property taxes during the last 16 years. 

All of the units are affordable to people at or below 60 percent area median income, or an individual in Maui making $36,180 or less annually in 2017.

It’s unclear how the building owner, Front Street Affordable Housing Partners, was able to get out of its 50-year affordability requirement in just 18 years.

State and county officials point to leasehold increases from the landowner, The Harry and Jeanette Weinberg Foundation, which supposedly made the complex too expensive for Front Street to operate on reduced rents.

That apparently justified the use of a qualified contract, the Internal Revenue Code option that allowed the developer to increase the rents early.

Corbett Kalama, the foundation’s vice president of real estate and community affairs, said the foundation has not significantly increased the rent on the developer.

Front Street Affordable Housing Partners declined to comment for this story.

Whatever the case, Maui Councilwoman Elle Cochran of Lahaina said she’s not holding her breath for solutions from the state. She plans to introduce legislation to get an appraisal on the property so the county can consider eminent domain.

Reuben Pali, a tenant of Front Street, has watched about a dozen people move out for fear of eviction, including his own family members.  

Fourteen units already vacated are now rented at market rate, according to testimony provided by Front Street’s attorney to a legislative committee. 

Pali and his wife Ronda watched as a single mother with two children left a two-bedroom apartment across the hall from them. The unit has since been remodeled, embellished with granite countertops.

Eminent Domain An ‘Extreme Solution’

Eleven years ago the state faced a similar situation when owners of Kukui Gardens, an 857-unit complex in Honolulu’s Chinatown, threatened to raise rents to market rate.

The Legislature issued $25 million in general obligation bonds and provided other funding so the state could purchase part of the building and keep 389 of the units affordable.

Even though there is a precedent, HHFDC spokesman Kent Miyasaki calls eminent domain an “extreme solution.”

In testimony opposing SB 2293, William Meyer, a lawyer representing Front Street Affordable Housing Partners, estimates the property’s market value is now between $35 million and $52 million. Maui County’s assessed value for the property is around $24 million.

It’s unclear if the sizable appropriation to purchase the property or offer tenants rental assistance will be included in this year’s Senate bill.

Sen Rosalyn Baker listens to public testimony during death/dying hearing.

Sen Rosalyn Baker has introduced measures the past two sessions in an effort to keep the units at Front Street Apartments affordable.

Cory Lum/Civil Beat

“There’s a blank there for a reason, we need to see how all of this shakes out,” Sen. Rosalyn Baker of Maui said. “There’s a lot of questions that don’t get answered until we go to conference (committee).”

Lawmakers could put the money in the budget during next year’s legislative session.

But the 2019 session ends just three months before the Front Street rents are set to increase. It’s also hard to say if the county will be willing to match the funds because county officials don’t know how much the state will require them to dedicate.

Please understand, I don’t have a crystal ball,” Baker said. “Both leaderships know that it’s very important not to lose affordable housing.”

Nowhere To Move

Miyasaki said the agency is focusing its efforts on building new housing units on Maui.

He pointed to The Villages of Leilalii, a housing project with thousands of units, half of which will be sold to people at or below 140 percent of area median income, or an individual making at or below $84,420.

Ronda Pali worries the state’s pending housing projects won’t cut it for her and other tenants.

“It’s a huge waste of money and so much stress on everybody to try to kick us out of our homes and try to reapply for something we can’t afford,” she said.

Hellen Bullion worries that she and her son James, who is recovering from surgery, will wind up homeless come August  2019.

 

 

There is demand in Maui County for about 14,000 new housing units between 2015 and 2025. About 45 percent of the demand comes from people who make $45,000 or less annually, according to a state housing study

One of the tenants, Helen Bullion pays $975 per month in rent at the Fort Street complex. A big increase will force her out –and she has no idea where she’ll go.

Growing up on Molakai, Bullion, the daughter of an Okinawan pig farmer, says her mother used to offer their house up to strangers who didn’t have a place to stay.

“When we woke up in the morning we always saw a stranger on the floor because she used to bring home the construction workers from the outer islands who didn’t have a place to stay,” Bullion, who is now 77, said.

“It’s just not that way anymore… We’re all in the situation where you’re going to be homeless sooner or later.”

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