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Planned city sales may hurt renters

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Hundreds of city-owned apartments could be converted to condominiums under a plan to sell 12 buildings during the next year, raising concerns that renters could have a harder time finding housing in a hot market.

The plan would give about 400 low-income families in four buildings one year to decide whether to buy their apartments at the same cost as renting them. Rents could not be raised for one year on the remaining units in all 12 buildings.

"I think it's a very balanced approach to what would be condominiums and what would remain rental stock, as well as providing home-ownership opportunities," Deputy City Managing Director Malcolm Tom said.

The rent-to-own program would include interest-free loans and require no down payment from existing low-income tenants of Chinatown Gateway Plaza, Harbor Village, Marin Tower and West Loch Village, he said.

The properties comprise 676 units, according to Tom, and 404 families are expected to qualify for ownership.

The remaining eight buildings have nearly 600 apartments, and the city would not require any of them to remain rentals, Tom said.

It's unlikely they would be converted to condos because many units are very small, and some buildings have financing restrictions that would carry over to new owners, according to Tom.

The plan would require City Council approval. Some members are worrying about the potential impact on the rental market.

Councilman Gary Okino questioned whether some low-income tenants who participate in the rent-to-own program could simply sell their apartments at market rates later. That would eliminate rental units and ownership opportunities for other low-income tenants, he said.

Tom said buyers who choose to sell within five years would have to forfeit any appreciation in value, which would go to the city. After that time, however, sellers could keep any profit.

He said it's likely that units sold after five years would go to other low-income renters, because financing would be available through a revolving loan fund. "Given the loan program, they'd be foolish not to sell it to another low-income person, because it would be easier," he said.

Tom said the city is not under pressure to sell the properties because it needs quick cash. But he said it makes good economic sense to sell now.

"The timing is good because the housing market is very hot," he said. "It's a seller's market."

Proceeds from the sales would pay off debt associated with the buildings and other expenses, and leave $30 million in a special reserve fund for emergencies, Tom said.

The remaining eight buildings that could be sold are the old Bachelor's Quarters in 'Ewa, Chinatown Manor, Kanoa Apartments, Kulana Nani Apartments, Manoa Gardens Elderly, Pauahi Hale, Westlake Apartments and Winston Hale.


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