Developers seek to build 750 affordable rentals in Kapolei

Yahoo

a day ago

A master-planned community long envisioned for Kapolei could begin to take shape early next year with initial homes that help ease Oahu's short supply of affordable rental housing.
Developers of the roughly 500-acre project known as Kapolei West between the City of Kapolei and Ko Olina Resort &Marina have advanced plans to produce an initial 17-acre subdivision of 750 rental apartments that would be affordable in perpetuity to households with low and moderate incomes.
Affiliates of Utah-based firm The Wasatch Group are aiming to start construction in February and finish homes in four phases from August 2027 to July 2028.
'We're very excited about getting going, ' said Kip Sheppard, head of Wasatch affiliate Laulima Affordable Housing LLC developing the 750-unit project to be named Aloha Aina. 'It's been a long time coming.'
Aloha Aina's four phases involve 70 units for low-income seniors, 180 units for low-income families and two phases with a combined 500 units for moderate-income households.
The first phase, according to Sheppard, could either be the piece for seniors or 236 units for moderate-income households, depending on whether low-cost financing can be obtained from the state later this year.
Two pools, community gardens, two clubhouses and residential units in eight buildings rising up to six stories are part of the Aloha Aina project, which is expected to cost $447 million and would provide tenants with the lowest utility rates of any West Oahu community due in part to photovoltaic power and construction materials, according to the developer.
If successful, Wasatch will start forming an initial piece of Kapolei West that was first envisioned more than 30 years ago and was previously pursued by multiple developers.
The property for decades was among thousands of acres of sugarcane plantation lands in the area owned by Campbell Estate programmed to become part of Kapolei as Oahu's secondary urban center.
An original version of the community later dubbed Kapolei West by the estate was proposed in 1991 by Ko Olina's initial developer Herbert Horita, who had an option to buy the roughly 500-acre site bordering the resort.
Horita's plan was to produce 3, 500 homes around a second golf course for the resort. But development of Ko Olina stalled under Horita due to the bursting of the Japanese investment bubble followed by an economic downturn in Hawaii that lasted for most of the 1990s.
In 2001 developer Jeff Stone, who with partners acquired the then-mostly undeveloped resort in 1998, announced plans to purchase 324 acres of the Kapolei West site to produce Seaside at Kapolei with 2, 900 homes, a golf course and a 33-acre commercial center.
Financing challenges in the wake of the Sept. 11, 2001, terrorist attacks derailed Stone's plan.
An affiliate of Campbell Estate's successor, James Campbell Co., several years later obtained land-use and zoning approvals for Kapolei West allowing up to 2, 500 homes, a 23-acre regional mall, a golf course and 25 acres of park space.
In 2016 a Chinese company paid Campbell Co. $103 million for the Kapolei West site. But China Oceanwide Holdings Ltd. failed to develop the land amid a Chinese-government clampdown on overseas investment, and in 2022 sold the property to Wasatch for $75 million, according to property records.
As part of land-use approvals, the property owner is required to make 30 % of all homes affordable to low and moderate-income households, with 10 % being affordable to households earning no more than 80 % of the median income and 20 % affordable to households earning no more than 120 % of the median income.
Aloha Aina would satisfy this requirement, though Wasatch is aiming to make its 10 % share, or 250 homes, affordable to households earning no more than 60 % of the median income, including 18 reserved for households earning half that.
Apartments throughout Aloha Aina mostly will range in size from 606 to 1, 218 square feet with one, two or three bedrooms in addition to a half-dozen, 493-square-foot studios.
Maximum monthly rents for tenants earning up to 60 % of the median income can be $1, 596 for studios, $1, 710 for one-bedroom units, $2, 052 for two-bedroom units and $2, 371 for three-bedroom units under state guidelines.
The income level this year equates to $63, 840 for a single person, $72, 960 for a couple and $91, 200 for a family of four.
The other 500 units could have tenants earning up to twice as much, or $127, 680 for a single person, $145, 920 for a couple and $182, 400 for a family of four. Corresponding maximum monthly rents could range from $3, 192 for a studio up to $4, 743 for a three-bedroom apartment.
To finance the 250 low-income apartments, Aloha Aina's developer has applied for about $130 million in combined tax-free bond financing, a low-interest loan and tax credits from the Hawaii Housing Finance and Development Corp., a state agency that helps finance affordable housing.
Such financing is awarded to developers on a competitive basis. If Wasatch's application is approved, the developer intends to proceed first with the 70 units for low-income seniors to be called Maluhia followed by the 180 units for low-income families to be named The Hoku.
The developer also is seeking exemptions from having to pay certain city fees estimated to total about $4.4 million, including a $2 million wastewater system charge, $1.3 million in building permit fees and a $933, 750 road improvement fee.
HHFDC has yet to act on the developer's applications.
If the requested financing is not approved this year, Wasatch intends to proceed first with the moderate-income portions of the project.