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Raising Cane Rob Perez |
Kapolei land still vacant
as housing market soarsOahu is in the midst of the hottest real estate market on record. Home sales are soaring, and developers can't build fast enough to satisfy the insatiable appetite of buyers taking advantage of historically low mortgage rates.
Yet the state, master developer for the Villages of Kapolei, the still-unfinished West Oahu community, is missing out on the action.
Dozens of acres of vacant land earmarked for hundreds of homes sit idle in the villages. Some of that property is overgrown with weeds and brush, detracting from tidy neighborhoods of manicured lawns and small parks.
While home builders in communities surrounding the villages are reaping the benefits of the super-heated market, the state isn't even certain what it will do with the land, which is slated to hold up to 1,500 single and multi-family homes.
The new administration is reevaluating the planned uses to determine if they still make sense in today's market. On top of that, the state Housing and Community Development Corp. of Hawaii's goal is to wrap up its Kapolei work as quickly as possible.
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One of two vacant lots, above, along Namahoe Street in Kapolei, illustrates a missed opportunity as other area housing projects ride a lively market.
"It has been a challenge to go through a down market and now an up market," said Robert Hall, acting executive director of the agency. "But no one more than us wants to complete the development of Kapolei."
Given the pace in which state bureaucracy moves, however, that goal is still years away. And Kapolei residents are frustrated. You can't blame them.
They have been urging the state agency for years to complete the villages, but say their pleas have gone largely unanswered. They have seen plans for various projects, including day-care and church facilities, that were supposed to go out to bid but never did. They have witnessed parking violators and speeding motorists in their neighborhoods go unpunished, largely for reasons related to a slow-moving bureaucracy.
What really bothers residents, though, is that the agency seems ill positioned to capitalize on the hottest real estate market in years.
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Kapolei Kai homes under construction sold out in about three months. With the exception of a handful of self-help residences and a 204-home project in the works, no new development is on the horizon.
"They're sitting on their hands doing nothing," said John Riggins, a real estate agent and Kapolei homeowner.
"Everything seems to have come to a complete stand-still in terms of the development of the villages," added Warren Wegesend, general manager of the Villages of Kapolei Association.
Under the state's original plans, the 5,000-home Villages of Kapolei, which welcomed its first residents around 1990, was supposed to be completed within a decade. Today, only 2,774 homes (of roughly 4,300 now projected) have been built, and with the exception of a handful of self-help residences and a 204-home project in the works, no new development is on the horizon.
A big reason for the dearth of activity is that a major sewer line in Makakilo is at capacity and no new Kapolei projects will be allowed until a new transmission line is constructed, according to the state, which is working with private developers and the city to get the piping installed by mid-2005.
Yet private developers, which like the state was stung by a depressed housing market in the '90s, have been nimble enough to recover from that downturn and are building despite the sewage capacity issue. They are erecting homes in Kapolei, Makakilo and Ko Olina, all within minutes of the vacant village parcels and all approved for connection to the existing sewer lines.
The homes have been selling at a brisk clip. With demand far outpacing supply, some builders have resorted to lottery drawings and other measures to select would-be buyers.
At Kapolei Kai, the 204-home subdivision under construction in the villages, the project essentially sold out in three months instead of the three years originally anticipated, according to Kathy Inouye of Makai Village Partnership, Kapolei Kai's developer.
"I would love to have another parcel to develop," Inouye said.
But don't expect to see other villages' developments any time soon.
After the Lingle administration took office late last year, the HCDCH, still dealing with the effects of a federal investigation dating to the previous administration, began reevaluating the planned uses for the remaining undeveloped land in the villages. About 85 acres is earmarked for housing.
Hall said the agency is talking with the Department of Hawaiian Home Lands and other potential developers about the properties. Any land targeted for sale to private developers would have to go through a public bid process, which would mean months before even the first nail is hammered.
Residents have been so frustrated by the lack of development in recent years that they persuaded Sen. Brian Kanno, who represents the area, to introduce a bill last session requiring the housing agency to finish the villages within five years. "It's been a very slow and frustrating process for the community," Kanno said.
An amended bill, requiring completion by 2011, was unanimously approved by the Legislature. But to the disappointment of homeowners, Gov. Linda Lingle vetoed the measure last month, saying factors beyond state control could make the completion date impossible to meet.
Now residents aren't sure what to expect, despite assurances from the Lingle administration that completing Kapolei is a top priority for the housing agency.
Part of the residents' frustrations stem from the agency's poor track record in managing its Kapolei properties. Because the project has taken much longer than anticipated to complete, the agency in effect has become a property manager -- a role it never intended to assume and, in many respects, is ill equipped to perform.
Not a single street or sewer line within the villages, for instance, has been turned over to the county yet, largely because the county won't accept the infrastructure until it meets county specifications.
That means the housing agency has to maintain the facilities, a responsibility that grows more costly as the systems, some more than a decade old, continue to age.
And because the agency isn't set up to be a property manager, that can create its own set of problems -- and expenses.
Take street lights.
Residents say it used to take nine months for burned-out lights to be replaced, in part because the agency waited until about 50 lights went out before ordering replacement parts from a supplier in Italy. Why Italy? No one I talked to knew the answer.
Now that the agency has experience dealing with street lights, it keeps an inventory of replacement parts on hand, cutting down on the wait time.
The streets present another challenge. Because the county doesn't own them yet, the police, employed by the county, technically don't have jurisdiction to issue parking or speeding tickets in the villages, according to the state and the association. (Police, however, do respond to crimes).
The result? Motorists sometimes speed or park illegally without fear of being ticketed. One concerned officer became the talk of the villages a few years ago when he issued a slew of tickets, some of which later were overturned because of the jurisdiction question.
The solution to many of these problems will come as the state agency completes its work in Kapolei, exiting the development and property management business there.
By then, the state should have learned a costly lesson. Despite all the so-called affordable housing built in the villages, it has no business being in the development business.
See the Columnists section for some past articles.
Star-Bulletin columnist Rob Perez writes on issues
and events affecting Hawaii. Fax 529-4750, or write to
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu 96813. He can also be reached
by e-mail at: rperez@starbulletin.com.
