BY JIM DOOLEY –With rents at the state’s Honokowai Kauhale affordable housing project on Maui starting at $1,000 per month, 49 apartments that have been vacant for at least the past 12 months cost the state a minimum of $588,000 in annual gross income.

That missing income would cover the $583,752 annual tab paid by the Hawaii Housing Finance Development Corp. to a private company to manage the entire, 184-unit project.

Since August 2010, the number of vacancies at the Kaanapali-area complex has increased to 71, according to property records and interviews.

Kent Miyasaki, spokesman for the HHFDC, said last week that 69 of 184 units are vacant: 32 in disrepair and 37 waiting for occupancy.

Glenn Ishikawa, the former maintenance supervisor at Honokowai Kauhale who was fired two months ago by manager Lisa Faleafine, put the total number of vacancies at 71.

Glenn Ishikawa

Two units have been vacant since mid-2006, he said. Some units were refurbished by state contractors who completed roof repairs on individual buildings at the project 18 months ago but are still vacant, according to Ishikawa, who claims he was wrongly terminated and is appealing his dismissal to the state Labor Department.

The management company overseeing Honokowai Kauhale, Realty Laua LLC, is in line to collect as much as $225,000 in annual fees for managing vacant apartments.

Lisa Faleafine, whose family owns Realty Laua, did not respond to telephone requests for comment today.

The project vacancy rate is pushing 40 percent and contributes to an acute affordable housing shortage on Maui and particularly West Maui, where thousands of service industry personnel work in the area’s many upscale hotels, shops and restaurants

One resident claimed to know of applicants who have waited “six years or more” to move into the project.

Miyasaki of HHFDC said early this week that Realty Laua told the state that the waiting list for the project “has been exhausted.” Tenants dispute that claim and it is now being examined by the HHFDC.

“Since it has come to our attention, we’re looking into it a lot closer,” Miyasaki said, noting that the agency was unaware of the high vacancy figure until contacted about it by Hawaii Reporter.

He also said that HHFDC was without an “asset manager” to oversee its housing projects for an extended period of time and only recently filled the position.

Vacant Unit

Hawaii Reporter asked HHFDC Wednesday how much money has been lost due to vacancies at Honokowai Kauhale and why the problem has grown to such dimensions.

Agency director Karen Seddon referred questions to Miyasaki, who did not respond to written inquiries.

Donalyn Delacruz, press secretary for Gov. Neil Abercrombie, said the administration is “investigating the situation” at Honokowai Kauhale.

Mold Covers One Stairway

At least one official from the governor’s office met with Seddon yesterday, it was learned.

Dane Wicker, an aide to State Sen. Donovan Dela Cruz, said yesterday HHFDC personnel told him the agency has spent $450,000 on repairs at Honokowai Kauhale since 2008 and plans for another $750,000 in repairs are underway.

Dela Cruz is chairman of the Senate Water, Land Use and Housing Committee.

Residents at Honokowai Kauhale, who asked not to be named because they said they fear retaliation, said some vacant units have been cannibalized of appliances and fixtures and others are used to store equipment.

Exterior mold

One resident provided photos of exterior mold covering the stairway and fence at one building and of numerous sections of exterior walls where holes and decay have been patched with plywood sheeting.

Another provided photos of rusted appliances and bathtubs and water-damaged ceilings.

“The exterior walls are made of particle board that expands and decays over time because of wet weather,” said one resident.

“It’s breaking off in chunks in some places,” he said.

The project was built in 1989.

Since maintenance supervisor Ishikawa left, some repair work has been assigned to manager Faleafine’s live-in boyfriend, Iokepa Auwae, who is on parole from state prison for crimes including murder conspiracy, kidnapping, armed robbery and weapons offense.

Plywood patch

Auwae and another convicted felon, Genghis Kaihewalu, are also employed as groundskeepers at the project. Residents and Ishikawa said they patrol the grounds in a small gas-powered vehicle and have master keys that give them access to all units in the complex,

Miyasaki did not respond to repeated requests about whether HHFDC regulations restrict the tenancy of felons and parolees at its housing facilities.

Other agencies permit ex-convicts to reside in public housing, although certain criminals, including sex offenders and amphetamine traffickers, are banned.

The Honokowai Kauhale rental form asks applicants if members of their household have “ever been convicted for any offense against the law” but it is not known how Realty Laua uses that information.

HHFDC owns 1,437 affordable housing units in nine projects around the state, a responsibility it inherited after another state agency, the Housing and Community Development Corp. of Hawaii, was dismantled in 2006.

Most of the earlier agency’s housing inventory – 6,195 units in 81 different complexes around the state — was transferred to a newly created agency, the Hawaii Public Housing Authority.

The remainder, including Honokowai Kauhale, went to HHFDC, an agency originally created to provide financial assistance to private developers willing to construct affordable housing. Housing Projects

Miyasaki of HHFDC said earlier this week he did not know why HHFDC was given ownership and management responsibilities of the nine projects, including Honokowai Kauhale.

Vacancy rates and shoddy living conditions at public housing projects in Hawaii have been the subject of much criticism and scrutiny over the years, but all the examinations were aimed at projects owned by HCDCH and the new Public Housing Authority, not the smaller, lower-profile HHFDC.

In 2002, residents at a Kona public housing project managed at the time by Lisa Faleafine made an emotional presentation to state housing officials about squaid living conditions and mismanagement at the project.

“It was very traumatic,” said then-state housing agency director Stephanie Aveiro in 2003.

“Some of us were literally in tears. I was ashamed by what I saw,” said Aveiro.

Faleafine was transferred to the property management job at Honokowai Kauhale on Maui.

Realty Laua last year received a new, three-year, $1.75 million contract from HHFDC to manage the project.

Honokowai Kauhale

In an audit of the Housing Authority released two months ago, Hawaii Auditor Marion Higa faulted the agency’s oversight of the private companies hired to manage public housing projects. One of the companies is Realty Laua, the same firm managing Honokowai Kauhale for HHFDC.

“We found that the authority’s monitoring of its housing project managers, both state and private, is sporadic,” Higa’s report said. audit

“Both state- and privately-run housing projects have backlogs of repair and maintenance issues. Turnaround on vacant units at both state and privately run housing projects is slow, adversely impacting families on the waiting list as well as rent collections.”

But Higa’s report found that of the Housing Authority’s 6,195 housing units, 233 were vacant because they needed repairs or were waiting for occupancy. That’s a vacancy rate of less than 4 per cent.

Higa’s report noted that Realty Laua has been the manager for the state’s largest public housing complex, Kuhio Park Terrace/Kuhio Homes, and recently agreed to settle federal and state court lawsuits alleging discriminatory treatment of residents there.

Court records show the company agreed to pay $225,000 without admitting wrongdoing.

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Jim Dooley joined the Hawaii Reporter staff as an investigative reporter in October 2010. Before that, he has worked as a print and television reporter in Hawaii since 1973, beginning as a wire service reporter with United Press International. He joined Honolulu Advertiser in 1974, working as general assignment and City Hall reporter until 1978. In 1978, he moved to full-time investigative reporting in for The Advertiser; he joined KITV news in 1996 as investigative reporter. Jim returned to Advertiser 2001, working as investigative reporter and court reporter until 2010. Reach him at Jim@hawaiireporter.com