DEAN SENSUI / DSENSUI@STARBULLETIN.COM With community support and input, the revitalization of Palolo Homes, a 306-unit development constructed nearly 50 years ago, is set to take place through privatization. Eric Musrasrik, 12, rode his scooter yesterday past a mural painted on the side of the facility.

Public housing project in
Palolo becomes privatized

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Associated Press

A state-owned public housing project on Oahu has gone private.

The nonprofit Mutual Housing Association of Hawaii has become the owner and operator of Palolo Homes, a 306-unit development constructed nearly 50 years ago.

"This is truly a momentous occasion for the residents of Palolo Homes," Gov. Ben Cayetano said yesterday. "From this day forward, working with Mutual Housing, residents will have the opportunity to control the destiny of this special community."

The move is expected to eliminate $500,000 in annual deficits, state officials said.

It will also save $8 million in future capital improvements obligations through the infusion of private capital generated from the sale of tax credits, they said.

Proposed monthly rents range from $375 to $850, with the residents' portion limited to 30 percent of gross family income. Federal Housing and Urban Development Project-Based Section 8 vouchers will provide subsidies to cover rental shortfalls.

Other state-owned public housing complexes may be considered for privatization in the future, the governor's office said.