Tenants at Lahaina Front Street Apartments celebrate federal court win to keep rent affordable until 2051

The 40-page decision by Hawaiʻi federal District Court Judge Jill Otake rejected an attempt by the project developer, Front Street Affordable Housing Partners, to end the restrictions set in place to prevent sharp increases in rents or sale of the project unencumbered by the rent restrictions.

The Front Street project was built in 2001 to provide affordable rental housing to low income residents of Maui. Front Street is one of the few affordable housing complexes left on Maui. Currently, the maximum income for four is about $55,000 to rent an apartment at Front Street. In return for $15 million in state funded tax credits, the developer is contracted to keep the apartments affordable for 51 years.

However, after just 15 years, the developer asked the state’s financing agency, the Hawaiʻi Housing Finance & Development Corporation (HHFDC), for permission to end the restrictions.

According to the Hawaiʻi Appleseed Center for Law & Economic Justice, attorneys representing the tenants said the HHFDC agreed to the developer’s request without complying with applicable law. Without the court challenge, the organization says ending of rent restrictions could have led to the doubling or tripling of rents and the eviction of low-income tenants who were unable to pay.

The court ruled that the developer was obligated to honor its commitment to keep rents affordable for the next 31 years, and that an attempted “release” of the low-income restrictions between the developer and HHFDC was unenforceable.