Kukui Gardens needs to remain affordable

THE ISSUE Gov. Lingle has assured residents of Kukui Gardens that it will remain affordable for low- and moderate-income families.

EVICTION remains a concern of low- and moderate-income residents of Kukui Gardens following the sale of the complex to a California real estate company. However, the Legislature provided a shield protecting the affordability under the new owner, and Gov. Lingle says she is willing to use the legislation to ensure continued low rents. Tenants should be assured by such bipartisan agreement.

The 2,500 residents of the 857 units were alarmed earlier this year when the Kukui Gardens board of directors put the complex up for sale. It was built as affordable, tax-exempt housing in 1970 under Federal Housing Authority rules.

Carmel Partners Inc. has offered to pay $131 million for Kukui Gardens and has denied that it will convert the complex next to Chinatown into luxury housing. However, plans by the board to pay off the mortgage before its 2011 expiration date could relieve Carmel from the FHA affordability requirements.

That possibility prompted the Legislature to intervene, empowering the state administration with eminent domain to purchase the property at fair market value if Carmel or any future owner tries to abandon the policy of affordability.

The governor has championed the cause of affordable housing, putting her at odds in this case with conservative Republicans who loathe the concept of eminent domain for purposes of social welfare. The only legislative dissents from the Kukui Gardens measure came from the GOP.

Lingle, who signed the measure into law, said she has five months to decide whether to support the plan to prepay the mortgage balance. She said her decision will be based on talks with everyone involved in the project and will depend on "whether or not it will allow this project to remain affordable or not."

Alan Goda, an attorney for Kukui Gardens, told the Star-Bulletin's Sally Apgar that a reason for paying off the first mortgage is that it could then borrow money for needed maintenance and repairs.

In a visit to the 22-acre complex, the governor told residents she will not allow any action that would lead to the units becoming unaffordable, even if that means condemnation. "One thing is clear," she said. "We can't afford to lose 857 affordable units, and we're not going to."

Carmel Partners executive Chris Beda said the company plans to abide by the federal affordability rules "in the short term" while broadly describing its long-term goals as "rental housing."

The city and state should offer the company tax advantages to ensure long-term affordability or consider condemnation of Kukui Gardens and partnership with a nonprofit organization to operate it.