‘Bold’ plan to develop leasehold condos on state land renewed

Report author Hawaiʻi Appleseed Center for Law & Economic Justice found that many program provisions could address housing needs of middle-income residents priced out of local homeownership.

Another positive finding was that demand for such homes is likely high.

On somewhat of a downside, the study concluded that the state could produce leasehold condos with two bedrooms and two bathrooms for $400,000. This still would be affordable to households earning about $80,000 a year, or 80 percent of the median income in Honolulu.

By comparison, a similar market-price unit would cost about $600,000 from a private developer largely because of land cost, higher financing expense and profit, the study said.

The biggest drawback identified in the analysis is that using public land for leasehold housing is controversial.

“While the ALOHA Homes model needs work, the concept of affordable leasehold housing has great potential to fulfill an important housing need for local residents,” the report said.

[A]s in prior years, the Office of Hawaiian Affairs objected to ALOHA Homes, mainly over concern that the program will vastly diminish Native Hawaiian claims to ceded lands from which OHA is supposed to earn revenue for beneficiaries.

OHA has suggested ways to tweak the bill that addresses its concern.