Rent Spike Scare Highlights Anxiety Over Displacement

Feb 7, 2018

Tenants at Na Lei Hulu Kupuna, an elderly affordable housing complex in Kaka'ako, got quite the scare last week when they received letters from their new property owner saying the their rent was going up in less than six months.
Credit Ku'uwehi Hiraishi

Kūpuna in an affordable housing complex in Kaka‘ako were given quite the scare last week. They received notices that their rent would soon increase – some would even double. HPR Reporter Ku‘uwehi Hiraishi has more.

89-year-old Damiana Vierra has lived in Nā Lei Hulu Kupuna, an elderly affordable housing complex in Kakaʻako, for the past 18 years. 

89-year-old Damiana Vierra outside Na Lei Hulu Kupuna. The elderly affordable housing complex has been her home for nearly 20 years.
Credit Ku'uwehi Hiraishi

In that time she’s paid a little over $500 a month for her 300-square-foot studio. But last week she received a letter from property owner Mark Development saying her rent will nearly double in less than six months.  

“The rent increase is impossible for fixed income seniors,” says Vierra.

The letter generated a lot of anxiety and confusion in the 76-unit complex. Kūpuna even mobilized in protest yesterday outside their Cooke Street building, all fearing displacement.

“They’re very edgy. They’re losing sleep. They’re not eating well. They’re nervous,” says 89-year-old Paul Le Brasca. He’s lived here since the complex was built 26 years ago.

“It’s not a happy situation with these people,” says La Brasca, “You never know what they’re going to do and now they have us all upset with this rent increase.”

89-year-old Peter La Brasca poses over stencils being used to make signs for a protest by tenants of an elderly affordable housing over what they thought was going to be a sudden increase in rent.
Credit Ku'uwehi Hiraishi

What tenants didn’t realize is their current rental rates are not tied to their income. Craig Watase is the President of Mark Development. He says a majority of the tenants will see a rent increase over time to fall in line with federal guidelines but that won’t happen for another year. To help with the transition, Mark Development is subsidizing the increase for the first year.

“You know and it’s not forever,” says Watase, “But it’ll encourage our tenants to go get the rent supplement or to get other forms of subsidies to help them.”

Mark Development purchased the complex from the state three years ago. One of the challenges for the private developer is rents have not increased for years. This leads to a backlog of maintenance problems that couldn’t be covered with rent revenue.  

The 76-unit elderly affordable housing complex was developed by the Hawai'i Community Development Authority in 1991. Rent has been raised only once since then, which resulted in a backlog of maintenance and improvement needs.
Credit Na Lei Hulu Kupuna

“We need to raise more money to make improvements to fix the place up because it had a couple million dollars of deferred maintenance,” says Watase, “But the only way to raise that money was to increase rents or go out and get the grants and stuff, which we did.”

They secured nearly $4 million in affordable housing funds from the city. This also preserved the project as affordable housing for another 60 years.

The rent increase scare highlights a broader anxiety over displacement in Hawaiʻi’s affordable housing complexes. Victor Geminiani is co-executive director of the Hawai’i Appleseed Center for Law and Economic Justice. He says privatization of public affordable housing can work but a culture of inclusion is key.

Pohulani Elderly, a 263-unit affordable housing complex for kupuna in Kaka'ako, was sold to a private developer by the state Hawai'i Housing Finance and Development Corporation last year. Pohulani was one of six projects sold in the deal and the only one housing kupuna.
Credit Pohulani Elderly

“Everything ought to be extremely transparent when you’re talking about the availability of limited numbers of affordable housing units in this state,” says Geminiani, “And before you turn them over to anybody, there ought to be explored in a lot of different ways, from a lot of different lenses, from a lot of different perspectives to find out whether this is really the best way of doing it. And if so, make sure you have built-in protections for the tenants.

He says this issue isn’t limited to Honolulu. Tenants in an affordable housing complex in Lahaina are bracing for displacement following the owner’s decision to institute market rate rents. Another 1,221 tenants on Hawaiʻi, Maui, and Oʻahu are in the midst of transitioning from public to private ownership of their affordable housing rentals.