The idea of building affordably priced apartments above a state court-run shelter for underage runaways and other minors in custody for noncriminal offenses puzzled members of the Ala Moana-Kakaako Neighborhood Board.

“I’m just really having a hard time understanding how these two concepts are put together on the same plot of land,” board member Susan Oppie said at a meeting last month.

But it makes perfect sense to state officials and affordable housing advocates looking for new ways to address Hawaii’s severe shortage of affordable living units.

The neighborhood board was looking at plans for a 1.5-acre site at 902 Alder St. near McKinley High School, on prime real estate that’s just a 10-minute walk from Ala Moana Center in an area where luxury condo towers are more the norm.

An unusual partnership between the Hawaii State Judiciary, which owns the land, and the Hawaii Housing Finance and Development Corporation, a state housing agency, proposes to replace the decades-old buildings with a high-rise of 200 affordable units — atop the Judiciary’s shelter and offices.

The project developer, the Kobayashi Group, still needs to secure financing and gain approval from the Honolulu City Council to build slightly higher than the area’s zoning would normally allow.

The apartments would be affordable to people making 60 percent or less of area median income (an individual in Honolulu earning $49,020 or less), with a few units reserved for people making 30 percent or less of AMI.

“(The Alder Street property) can be a model because it’s taking different state agencies and finding a way to build affordable housing and meet the needs of the agency.” — Betty Lou Larson, Catholic Charities Hawaii

Despite a development boom in the Ala Moana neighborhood, few of the towers slated for construction offer apartments for rent at such low income levels.

The Alder Street project combines state offices and housing near one of the 21 planned rail stations that are part of the city’s elevated rail project.

The state is the largest landowner along the rail line with about 1,900 acres distributed among various departments and agencies. As the rail project inches closer to its planned terminus at Ala Moana Center, officials are looking at aging buildings that could be redeveloped for more than one use – especially to address Hawaii’s affordable housing crisis.

“We really feel that (the Alder Street property) can be a model because it’s taking different state agencies and finding a way to build affordable housing and meet the needs of the agency,” said Betty Lou Larson, legislative liaison for Catholic Charities Hawaii. “This is a way that two missions can be served.”

Youth Offenders And Low-Income Renters

The Alder Street project is estimated to cost $87.6 million, and Kobayashi Group still needs to apply for low-income housing tax credits as well as money from the state’s Hula Mae bond program and the rental housing revolving fund. The tax credits and bonds are “very available,” said Elton Wong, the project manager for Kobayashi Group.

So is money from the rental housing fund now that lawmakers pumped $200 million into the fund during the 2018 legislative session, Wong said.

The building’s design would separate the Judiciary’s shelter and offices from the apartment complex, said Dee Dee Letts, coordinator of the court system’s Office of Project Management. She doesn’t foresee any issues arising between the mix of tenants.

The shelter provides minors a place to stay while the court finds a suitable home for them.

“I want to see more projects like this move forward because land is really hard to come by for affordable rental housing and for family services,” Letts said.

An estimated 25,847 additional housing units need to be built on Oahu before 2025, according to a state Department of Business, Economic Development and Tourism report.

And most of the people who will or already do need those units are making 60 percent or less of AMI. The need is especially great for people making 30 percent or less, according to a state Office of Planning report on rental housing.

Construction on the Alder Street property is set to start in January 2020 and wrap up in July 2021.

Planning For Growth

Lawmakers passed three measures in 2016 that made it easier for the state to build and finance mixed-use projects on state land. After years of meetings, reports and plans, some of the ideas are coming to fruition.

“You would think that different departments of the state or the county would have no problem working together in putting something like this together, but it’s not a simple thing,” said the Rev. Bob Nakata, an affordable housing advocate. “There really are silos all over the place.”

Nakata, a former state senator, said departments and agencies can be possessive of land they have jurisdiction over, making collaboration difficult.

The state Department of Education is showing interest in such collaboration. Plans are in the works for a residential high-rise in Kakaako with a public elementary school on the bottom floor. 

And the Hawaii Public Housing Authority is making plans to redevelop Mayor Wright Homes, one of the state’s largest public housing complexes located in Kapalama near a planned rail station, into a mix of commercial space, affordable and market-rate housing on the upper floors. 

For state Sen. Donovan Dela Cruz, who has pushed measures that encourage development along the rail line, the projects are long overdue.

In 2016, Gov. David Ige designated the state Office of Planning as the agency in charge of leading development plans along the rail line. But Dela Cruz said departments have no incentive to abide by the office’s plans because they report to the governor.

“That’s not how the pecking order works,” said Dela Cruz, a member of the Hawaii Interagency Council on Transit-Oriented Development.

The state would benefit, he said, from a designated transit-oriented development czar under the governor’s office.

The city is upgrading infrastructure near the rail line, especially in Iwilei and Kapalama near central Honolulu, to accommodate future development. In August, the city planning department published its plan to revamp infrastructure in Iwilei and Kapalama, an area ripe for redevelopment with a concentration of state landholdings.

The city is focused on regional upgrades to sewer and electric infrastructure to allow development, but it’s up to individual landowners to finance projects and see them through to completion.

“I’m starting to get optimistic that more affordable housing is going to happen in this kind of way,” said Nakata, the affordable housing advocate. “Not just within the state but across city and state boundaries, affordable housing is going to get built and it’s taken a while to get things to that point.”