Committee forwards Hualalai Court workforce housing exemption to full council

The Committee on Legislative Approvals and Acquisitions voted to forward Resolution 51-25 with a favorable recommendation to the full Hawaii County Council after presentations and public testimony supporting a 104-unit workforce housing project in Hilo.

Resolution 51-25 would authorize exemptions to certain county code requirements pursuant to section 201H-38 of the Hawaii Revised Statutes for the Hualalai Court Affordable Housing Project, a proposed 3.292-acre development at 364 Hualalai Street in South Hilo. The exemptions requested include changing lot-size zoning standards from single-family residential to multifamily to permit higher density and waivers of county permit plan-review and permit-fee provisions (Hawaii County Code sections 5-7-1 and 5-7-3) to reduce production costs for 104 affordable residential rental units.

The project developer, Carlo Morales, identified himself as CEO of Hololai Court and said the team received $25,500,000 from the state's tier 2 workforce housing fund and intends the project to serve households earning roughly 60% to 100% of area median income (AMI). He said the award made the project financially viable and that the overall project budget is about $55,000,000. DeMarco Morales, business manager for Hololai Court, described plans for workforce units near the Hilo police station and Saint Joseph High School and noted a planned 53-year affordability period.

Public testimony at the committee meeting was strongly supportive. Damon Ogata, who said he recently moved off-island because of housing costs, told the committee he supports more affordable housing across the island. Patrick Kearney, director of housing development for Hope Services, and Damian Waikaloa, chapter lead with Hawaii YIMBY, each urged approval; Waikaloa cited a Holomua Collective survey reporting that 66% of respondents identified housing costs as the top contributor to their cost of living and that nearly half expect they may leave the state within five years due to housing unaffordability. Shirley David, representing St. Michael the Archangel Parish in Kailua Kona, also testified in support and said families on both sides of the island are affected.

Council members asked about site conditions and long-term affordability. Council member Onishi asked whether the site is in a flood-prone area; the developer said their civil engineer secured an NPDES permit from the state Clean Water Branch and that stormwater is being managed for the project site. Onishi also asked who would manage the rental property; Morales said a third-party private property manager will be contracted and that management and reserve budgeting are lender and state requirements. Morales said the project must remain affordable for 53 years under its funding commitments.

Council member Onishi raised concerns about future operating costs and whether residents on fixed incomes could be protected against rising expenses; the developer said required property-management reserves and oversight by lenders and the state are designed to maintain operations and affordability for the 53-year period. The developer also said earlier plans had included project-based vouchers but those were relinquished when the financing changed to the tier 2 workforce fund, which targets 60% to 100% AMI, and thus the vouchers no longer fit the income targeting.

A motion to approve Resolution 51-25 and forward it to council with a favorable recommendation was made by the committee (motion text in the record). The clerk recorded seven ayes; Council members Kirkowitz and Connolly E. Kleinfeld were excused. Resolution 51-25 was approved by the committee and forwarded to the full council.

Votes at the committee were recorded as seven in favor and none opposed; the committee did not adopt additional amendments during the hearing.

The full council will consider final action on Resolution 51-25; the committee record shows local supporters, state funding and a private development team pushing the project forward under the state 201H workforce program.