Rather than selling its affordable housing projects outright, the city is now looking to hold on to the land under six of its 12 complexes, instead leasing the parcels out for between 30 and 70 years with restrictions to keep units below market rent.

Affordable housing advocates and tenants in city complexes are wary of the proposal, saying it could be a signal the city is pulling back from its pledge to keep the units affordable in perpetuity.

But city housing consultant Cyndy Aylett said leases will fulfill the intent of the mayor's promise to keep the apartments affordable forever, pointing out the City Council would be responsible for renewing the leases — and their affordability restrictions — when they expire.

She added the city wants to keep title to the land under the six housing projects because they are "strategic," and stressed that any plan would ultimately have to be approved by the City Council.

"It's strategic ... where the land is situated," Aylett said. "For example, if we have a property that is very close to a transit stop, we would want to make sure we hold on to the rights on that property. That's the reason we're making different plans."

The new proposal comes as the city and service providers are grappling with a lack of affordable-housing units on O'ahu — a predominant factor in the Island's homeless crisis and one of the biggest social welfare problems facing the state.

The city complexes consist of 1,257 one-, two-, three- and four-bedroom rental units.

Marin Tower, the newest and largest city complex, was built in 1994. The oldest — the Bachelor's Quarters in 'Ewa — was built in 1938. In addition to the five in Chinatown and one Downtown, there are also projects in Palama, Salt Lake, Manoa, West Loch, Ewa Villages and Kane'ohe.

The units represent a sizable chunk of O'ahu's affordable housing inventory, and losing them to market rents — even decades from now — would likely hurt thousands of longtime low- and moderate-income residents and could set a dangerous precedent for other affordable-housing complexes operated privately.

Drew Astolfi, lead organizer for Faith Action for Community Equity, said selling the complexes outright with deed restrictions — as the city originally announced it would do — was believed to be the best way to ensure the buildings would remain affordable in perpetuity. To some extent, he said, the lease proposal "raises questions about the city's commitments to permanent affordability" for the buildings.

On the other hand, Astolfi added, the leases — and their affordability restrictions — would allow the city to retain oversight in the complexes.

GUIDELINES TO FOLLOW

The most important detail in the agreements will be how affordable units in the complexes will be — and for how long, Astolfi said.

Currently, rents at the projects are based on federal affordability guidelines for low- and moderate-income earners. And some city buildings are mandated to follow those guidelines because the complexes were built with federal, low-interest loans.

But some of those mortgages have expired and others will do so over the next several decades, leaving some worried that rents could increase, pricing out the lowest income-earners.

Aylett declined to say which six housing projects the city is considering for the lease arrangements, but advocates suspect they are the five complexes in Chinatown and one in Downtown Honolulu since their properties are so centrally located and valuable.

The current proposed rail transit route runs adjacent to Nimitz Highway, within walking distance of some of the Downtown and Chinatown housing complexes.

For tenants, news about the lease proposal is worrisome.

"It scares me a lot," said Ellan Taylor, the president of Oh-No, a group of tenants in city affordable housing projects across the Island. "Do you know how quick 30 years is? It sure is not perpetuity, is it?"

Aylett said the 30-year guideline is based on a 2004 City Council resolution, passed after former Mayor Jeremy Harris announced a plan to sell the affordable housing properties, which he later scrapped.

She said a 30-year lease is the shortest the city would offer for the land, but added the city is also considering leases as long as 70 years.

That's still not long enough for Bev Harbin, the former state lawmaker who is helping to represent tenants in the housing projects as a consultant with Faith Action for Community Equity.

She said a 90-year lease would give tenants peace of mind, and attract the right kind of buyers — nonprofits committed to affordable housing.

"Thirty years would be totally unacceptable to everyone," she added.

But Aylett said the 30- to 50-year lease set-up could be more appealing to affordable-housing organizations and other nonprofits, which may not have the money to buy the buildings outright.

INTERESTED PARTY

Kevin Carney, vice president of EAH Housing, the affordable-housing nonprofit that offered to buy all of the city's complexes, said he has no problem with leasing the land.

"It's a way of preserving the affordability, while at the same time giving the city some control over the property," he said, adding that his nonprofit would be interested in securing a longer lease.

Still, Carney said he would rather buy the properties — land and all.

"Adding another layer of legalese complicates the deal a little bit more, but again we don't have an issue with that," he said.

Carney also said he would be concerned if the city sold the six properties to a for-profit developer, especially under a 30-year lease.

For Taylor, who lives in Marin Tower, the biggest fear is not knowing what will happen.

Tenants have arranged to meet with Mayor Mufi Hannemann on Aug. 2, after weeks of asking for a sit-down interview and being turned down.

Taylor said she wants to make sure another generation — in 30 or 50 years time — is not again worrying about losing their homes.

"We're not in this just for ourselves," she said. "We want to do it for the future of the people in our same income bracket. We're just saying keep it affordable so people can continue to live here and work here."

The city has declined to release current market estimates for the complexes, but has said the construction costs for all 12 projects totaled about $172 million.

Annually, the city spends about $3.5 million more on maintenance and operating costs at the properties than it takes in from rent and other sources.

The mayor announced in February his plans to sell the complexes off in phases. At the time, he promised the units would be kept affordable in perpetuity through deed restrictions. Meanwhile, Aylett said the outright sale of at least five of the remaining complexes will continue.

The sixth, Kulana Nani in Kane'ohe, is on Kamehameha Schools land. The city is trying to acquire the land, but negotiations are not moving forward and Aylett said it's unclear whether a deal will be reached. She said the city is considering whether to proceed with the sale of Kulana Nani, even if the city does not own the land. Earlier, the city had said it wanted to acquire the land before selling off the complex.

The city's lease for the land runs out in 2048. Kamehameha Schools put the land on the market last year for $6.8 million, but it was not sold.

There is still no timeline for when the 12 complexes will be sold, but Aylett said she hopes to have a rough outline to the mayor within two months.

It is still unclear whether the projects will be sold individually or in batches.

City Councilman Romy Cachola, chairman of the Affordable Housing and Economic Development Committee, said he would have no problem with 30-year leases, "as long as those units remain affordable, that there's continuity."

He also said the lease set-up could be a wiser economic decision, and give the city more profit — and flexibility — in the long run.

Reach Mary Vorsino at mvorsino@honoluluadvertiser.com.