LIHU‘E — The largest affordable housing project ever undertaken by the County of Kaua‘i received a major financial boost on April 26 with the county council’s approval of a $25 million bond issuance.
Construction crews will break ground on May 9 on the first vertical construction at the Lima Ola project in ‘Ele‘ele, starting work on 26 units of supportive housing for families transitioning out of homelessness.
When completed, the entire project will include between 530 and 620 multi-family and single-family housing units, all of which will be affordable in perpetuity. It will be built in four phases, the first of which will include 111 multi-family rental units, 38 single-family homes and a community center.
The $25 million private activity bond approved by the council will be loaned to Lima Ola development partner Ahe Group, which also worked with the county on the Lihu‘e affordable housing project at Pua Loke.
In a presentation before the council, County Housing Agency Director Adam Roversi described the funding method as “cutting-edge,” adding that Kaua‘i is the only county in the state using these sorts of bonds.
Private activity bonds are a special category of federally approved, tax-exempt bonds that can be issued for specific qualifying purposes, including affordable housing.
Rather than the county, the developer is on the hook to repay the bond.
“These bonds will not burden county taxpayers,” said Roversi. “(They) will be payable by the developer, not by the county itself, so it’s not going to affect our bond rating.”
They are also automatically paired with state-administered Low Income Housing Tax credits, which can provide millions of dollars in additional financing to the project.
The county council unanimously approved the bond issuance resolution.
“This is a really big deal, and I’m glad that we’re the first county to be going after these funds in this way,” said Kaua‘i County Council Vice Chair KipuKai Kuali‘i. “This is absolutely moving us in the right direction.”
The Lima Ola project has been in the works for the better part of a decade, under the administrations of both former Mayor Bernard Carvalho and current Mayor Derek S.K. Kawakami.
In 2018, the county broke ground on infrastructure at the project site. Millions of dollars have already been invested into infrastructure at Lima Ola, and the sections of the project set to begin this year alone come at a total estimated cost of more than $75 million.
Kaua‘i plans to break ground on about 400 units of affordable housing this year — 149 of which are a part of the Lima Ola development — which will make a dent in the needs of a county struggling with a housing affordability crisis.
A housing demand study conducted by the state Department of Business, Economic Development &Tourism determined that Kaua‘i requires about 2,500 additional housing units by 2030.
Those on the county homebuyer list will be given first priority to purchase homes at Lima Ola. In order to get on the list, applicants must be Kaua‘i residents and need to complete homebuyer education classes.
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Guthrie Scrimgeour, reporter, can be reached at 808-647-0329 or gscrimgeour@thegardenisland.com.
Source: The Garden Island
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