LIHU‘E —An affordable housing researcher is advocating for the Waipouli Courtyards to become cooperative housing, outlining a plan that involves a roughly $10 million county purchase to keep the apartments affordable.
However, county administrators have maintained they have no plans to purchase the property themselves.
Kenna Stormogipson, who has been urging for the public purchase of the property for months, spoke to The Garden Island about the possibility of converting the Waipouli Courtyards from private rentals to cooperative housing on Thursday.
The plan comes after the Hawai‘i Housing Finance and Development Corporation declined to purchase the property through the use of low-income and federal tax credits by passing over an application from affordable housing developer Ikaika Ohana earlier this year.
“The problem is, is that it didn’t get selected. That application was not chosen,” Stormogipson said.
“But when that happens, you have to go to Plan B. … How else can we make this affordable?”
Last month, the county passed a resolution urging the county to acquire the apartment complex.
Under the co-op plan, the Waipouli Courtyards would be converted from private rentals to a housing cooperative, where the county would need to purchase the land for roughly $10 million.
Another entity would then spend approximately $30 million to buy the building’s leasehold rights, which would last for 99 years.
As the county would be the landowner, they could put a limitation on the building to reserve the units for local workforce housing.
“Because the county owns the land, (the leaseholder) would have to abide by what the county wants,” Stormogipson said.
If this plan were to be implemented, people would need to be working on Kaua‘i in order to qualify to live in the units. Bylaws would set the exact qualifications needed to live in the building, but remote workers would not be able to live there.
Stormogipson estimated that roughly 70 percent of the building’s tenants would remain eligible to live there under a co-op model.
She also noted that 16 of the 81 units would be reserved for Section 8 voucher holders, a federal government program for assisting very low-income and disabled families.
“Doing a co-op allows for it to be mixed income,” she said, adding that there are two doctors interested in becoming part of a co-op model. “I don’t know how much money they earn. But they can afford these rate increases. It’s to their benefit to keep their costs down.”
Stormogipson said she has spoken with people from 24 different units that are currently on board with a co-op model. Tenants in five or six units have declined due to the possibility that they might start a remote job or they are planning to move off-island within the next year.
According to Stormogipson, rents range from approximately $2,500 for a one-bedroom, $2,800 for a two-bedroom and $3,000 for a three-bedroom.
Those prices are an increase from when the building was first built in 2009 under the Kaua’i Lagoons Affordable Housing Agreement, which meant its owners, KD Waipouli LLC, were required to charge affordable rents for 41, or 50 percent, of the 82 units for the first 10 years upon its construction.
That affordability restriction expired on Aug. 19, 2019, and the county declined to purchase the property through a first-right-to-purchase clause.
But the complex is currently on the market for $43 million, and Stormogipson is looking for public funding to be made available before a private buyer purchases the building.
“If it sells to a private owner, it just wouldn’t make financial sense for them to keep it as a rental,” she said, noting that the buyer would get a much bigger return on their investment by converting the units to timeshares.
“That’s why there’s this rush to try to put together a publicly financed deal in some way, shape or form,” she said.
She spoke to The Garden Island as she was heading to the 2023 Opportunity Finance Network press conference in Washington D.C. this weekend, an event she was attending in hopes of finding possible investors for the project.
“It’s a great model for housing. And so we’re just looking for potential sponsor lenders,” she said.
Stormogipson estimated that if a co-op agreement is made, it would take between three to six months to go into effect.
“It’s not like it happens overnight. But considering that you’re making permanently affordable housing, three to six months is not that bad,” she said.
County administrators repeated statements first told to The Garden Island in August in an email response on Thursday.
“The administration does not have plans to purchase the property and instead supports the purchase by a private entity in efforts to keep these units affordable,” repeated county spokesperson Kim Tamaoka.
“We understand that the Department of Hawaiian Home Lands and Ikaika ‘Ohana — a Maui-based affordable housing developer — have expressed interest in the property. Please reach out to those entities directly for more information,” she said.
Stormogipson also spoke of the Department of Hawaiian Homelands possibly looking to become involved in the project, but the department could not be reached for comment.
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Emma Grunwald, reporter, can be reached 808-652-0638 or egrunwald@thegardenisland.com.
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