Waiahole leasehold
deal passes

The agreement to sell partial
leasehold interest aims to help
residents build homes

The state is making it easier for Waiahole Valley residents with long-term state leases to build their own homes.

The Housing and Community Development Corp. of Hawaii's board of directors approved the sale of leasehold interest to lessees in the Waiahole Valley Agricultural Park and Residential Subdivision yesterday. The residents will then use the leasehold interest to finance mortgage loans.

HCDCH Executive Director Stephanie Aveiro called it "a win-win situation for all parties involved."

Waiahole-Waikane Community Association President David Chinen said it took four years to negotiate the terms of the sale of the leasehold interest.

"I'm glad it's over," he said.

Under the plan, lessees need to pay only 50 percent of the leasehold value. At least 5 percent is due upfront, and the rest is deferred. The lessees can pay off the deferred amount monthly over the 30 years of their mortgage or in a lump sum at the end of the current 55-year lease.

The state will retain the other half of the leasehold interest and share in the appreciated value when the property is sold. If the property remains in the family, the state gets nothing.

"We're really trying to make it affordable," said Marlene Lemke, HCDCH Real Estate Services Section chief.

Chinen said the shared equity provision is an incentive for lessees of agricultural lots to maintain the property for farming.

Lessees had earlier complained they were not able to secure mortgages because they were on month-to-month leases.

Lemke said a few lessees have been able to build homes in Waiahole with the help of family or friends or by mortgaging other property.

The state bought Waiahole Valley in 1977 for $6.1 million from Elizabeth Loy Marks, who tried to evict the 100 families living and farming there to make way for a housing development. The residents' fight to remain in the valley was a rallying cry for 1970s anti-development demonstrations.

After many disputes over long-term leases, the Waiahole residents agreed to sign them in 1995. But the state waited to execute the leases until 1998, after the dispute over diverted water from the Waiahole Ditch was resolved.

In the meantime, the residents continued to pay the same monthly rents to the state that they had been paying Marks.

Last year, HCDCH issued eviction notices to residential lessees who had yet to build a home and agricultural lessees who were not actively farming the land. The state later rescinded the evictions.

There are 54 residential, 36 agricultural and two commercial lots under long-term leases with the state.