• Market Updates
  • Oct 27, 2016
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Christina Dwight closes another deal with the City

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The city spent $6.9 million to buy a three-story, 24-unit walk-up apartment building on Beretania Street to be used for low-income and homeless housing.

The purchase of the building at 1727 Beretania St. — makai of Central Union Church and not far from the high-rise where President Barack Obama was raised — is expected to record today. The seller of the property was not disclosed.

The deal represents the latest project by Mayor Kirk Caldwell’s administration to add affordable housing and create more so-called Housing First units to ease the nation’s highest per capita rate of homelessness.

While Caldwell continues to urge landlords to rent their market-rate units to homeless people, his administration also has now purchased three buildings in town that it will operate as the landlord for low-income and formerly homeless tenants.

The city has selected Housing Solutions Inc. to manage the Beretania Street property, and “Housing First clients will be welcome at the project,” Jay Parasco, the city’s homeless initiatives coordinator, said in a statement.

Under the Housing First model, homeless people are placed in market-rate rentals where they get social service help for their problems, which could include mental illness and substance abuse.

Using lessons learned in Waianae and Makiki — where the city continues to renovate two adjacent school buildings that will provide 42 units for low-income and homeless housing — the city plans to create an advisory committee of neighbors, community leaders and elected officials interested in the Beretania Street project “to make sure the neighbors and everyone is involved,” said Sandy Pfund, who runs the city’s Office of Strategic Development.

The city’s so-called “Hassinger project” in Makiki near Hassinger Street has gotten some pushback from those worried about formerly homeless people moving into the renovated school buildings.

While the Hassinger project continues to undergo renovations for a planned opening in February, the Beretania Street building should welcome its first tenants in mid- to late November, said Liz Char, project manager for the city, who found the building and engineered the sale.

Caldwell said he believes the advisory committee will allay neighbors’ worries about the new residents who will move in.

“If we address their concerns, it’s going to be a good example of how we can do this in other neighborhoods around the island,” the mayor said.

A standard confidentiality clause in both the Makiki and Beretania Street real estate deals prevented city officials from reaching out to neighbors earlier, Pfund said.

If the city’s plans were announced ahead of an agreement, “sellers would not want to be subjected to negative comments and probably would not sell to us,” she said. “It’s important to work well with the seller to make them comfortable in negotiating the transaction with us. So they usually require these clauses.”

The Beretania Street building has 20 one-bedroom apartments and four two-bedroom units. But one apartment representing each floor plan will have to be renovated to comply with the federal Americans With Disabilities Act, Pfund said.

The building had been used as a leasehold condominium until the lease expired and the fee owner took possession, Pfund said, “and put it back on the market vacant.”

Char added, “It’s near grocery stores. It’s definitely very accessible.”

It’s also about 100 yards from where Obama grew up with his maternal grandparents on South Beretania Street.

HSI will begin accepting rental applications in December, Parasco said. Tenants must be experiencing either “sheltered or unsheltered” homelessness and make less than 50 percent of the area median income, which is $35,160 for a single person and $50,250 for a family of four.

The city bought the property through a $64 million appropriation from the City Council aimed at addressing homelessness.

Because there is no budget for operating funds, Parasco said maintenance and other costs will rely entirely on rental income.

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