Anything to save a bad sale?

The Chinatown Gateway Plaza Tenant Association (CGPTA) is very disappointed that the city proposes to seller finance this particular deal to sell city-owned housing.  The CGPTA never opposed transitioning these properties to the Right Buyer to preserve our affordable homes, but this bad sale preserves neither gap- nor low-income affordability while destroying the deliberate mixed-income structure of Chinatown. 

Please consider the following points:

(1) The city rushed to accept an inflated bid without understanding the underlying assumptions or math of a bid based on raising low-income rents to gap-income levels, raising gap-income rents to market-rate levels, and replacing all residents displaced by these unrealistic assumptions with new low-income residents only, thus eliminating all gap-income units entirely from all properties;

(2) The city marginalized housing and finance professionals and resident and community voices warning of the dangers of these unrealistic assumptions and rushed to budget and spend the proceeds of this inflated bid before it had the money, which is stunningly fiscally irresponsible;

(3) The city rushed to embrace eliminating all gap-income units from these properties, collapsing their deliberately established mixed-income structure in favor of uniform low-income “projects,” which is a worst-practice community-building and governance model from a previous century;

(4) The city jumped the gun as early as 2012 to begin renting only to low-income new residents, now rapidly creating vacancies at least in Chinatown Gateway Plaza because the sale’s target customers do not exist—there are no 20-30-40% AMI incomes that can afford HUD-recommended 60% AMI rent levels, see item (1) above;

(5) It cannot be true that this sale has to soak up all the low-income housing financing before we can finance other low-income housing projects, rather than apply low-income housing financing directly and effectively to other projects without going through this bad sale first;

(6) The recent public declaration that the city would “do anything” to save this sale is possibly the worst negotiating technique ever—the administration just surrendered all the bargaining chips to the buyer, who is now going to have its way with Honolulu unless City Council intervenes;

(7) The city is now rushing to seller-finance a bad sale that clearly preserves neither gap- nor low-income affordable housing, and with no indication of understanding why commercial lenders have not touched this deal after almost a year and a half, again demonstrating fiscal irresponsibility and why housing is not a core competence of this city.

We call upon the City Council to stop allowing city administrations to steamroll and stonewall us all due to a lack of transparency and accountability in city governance.  Rather than “do anything” to save a bad sale, please, do anything to:

  —save responsible and effective city governance,
  —do honest math thoroughly and publicly before making public decisions,
  —preserve genuinely affordable housing for all in Hawaii, and
  —stop spinning Reso 08-108 to appear to endorse eliminating all gap-income units, and preserve the current mixed-income structure that is deliberately established and widely acknowledged (e.g., HUD, the city’s own TOD guidelines) as necessary for healthy economies and healthy communities.