Mayor: Sale of 12 city housing projects in jeopardy

Published On: Dec 09 2013 06:28:00 PM HST

“If the rents go up, there are people who are going to become homeless," said Richard Elstner.

The downtown resident  worries he'll be one of those people if the sale of 12 city housing projects to a private entity prices him out of his building.

Click here to watch Catherine Cruz's report.

Elstner doubts he can afford couple of hundred dollars more a month.

The mayor today said he's worried too.  But for him, it's about the millions taxpayers will lose if the deal does not go forward.

The city council is poised to do an about-face either rescinding or delaying the sale.

The mayor says it isn’t fair to the buyer.

"To spend the kind of Monday they are have spent. To waste the time they are now spending and to go through this process with just three or four months left to close and to have the whole thing yanked from them is bad precedent,” said Honolulu Mayor Kirk Caldwell.

The sale would raise money to fix the aging structures in exchange for tax credits and the commitment of keep rents affordable.

"$50 million from this sale will be plowed back into the units to make sure they are upgraded and improved," Caldwell said.

The city's managing director says two other losing bidders on the deal have been making noise about the deal.

But the sore spot between the council and the administration is over a grant spending plan linked to nonprofit groups.

”There is no body to step in at this late date, if this deal does not go forward and this buyer pulls out," said Ember Shin.

The mayor says if the council cancels the project it will initially cost taxpayers  $3.4 million but could grow to $121 million.

The sale is also tied to a Housing First initiative to deal with our growing chronic homeless problem.

"My fear is we will lose this first priority if this sale is flipped, and I really don’t think that we can do afford to do that," said the state’s homeless coordinator Colin Kippen.

“The sale must take place under the structure of a sound plan for using its proceeds.  Until such time, it would be irresponsible to put public funds at risk,"   said Council Chairman Ernie Martin.

He added that the mayor’s spending plan is far from acceptable to the council.

The city council takes up the two resolutions at its meeting on Wednesday.


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