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Concerns persist over market-rate units in project

Pulama Lana‘i is proposing 150 units with 76 affordable, 74 market-rate

An illustrative rendering of a street view of two-bedroom homes in Pulama Lana‘i’s proposed Hokuao 150-unit rental home project is shown in the project’s final environmental assessment. Munekiyo Hiraga rendering

A high number of market-rate units, proximity to a sewage treatment facility and lack of options to buy are among the concerns of community members for a 150-unit rental home project proposed by Pulama Lana’i.

The company owned by Oracle billionaire Larry Ellison is aiming to develop 150 rental units — with 49 percent slated for market rates and the other 51 percent for affordable rates — under the state’s fast-track process for affordable housing.

The Hokuao residential project would build 76 affordable and 74 market-rate rental homes on about 76 acres of former pineapple fields neighboring Lanai City.

After state and county approvals, along with construction permits, the project would be completed within 10 years, according to the project’s final environmental assessment that was published Sunday in the state Office of Environmental Quality Control’s “The Environmental Notice.”

Several community members, including the island’s elected county official, have taken issue with the project’s market-rate-to-affordable-rental ratio.

“I must reiterate the numerous concerns I received from Lanai residents about the high number of market-rate units,” Maui County Council Member Gabe Johnson, who holds the Lanai residency seat, said in a letter to the applicant. “It is not in our community’s best interest to approve housing that will bring in remote workers from off-island and increase the population of Lanai.”

“Considering the very public vision of Larry Ellison that Lanai be an oasis for remote workers from locations all over the world, residents are concerned of their place in this vision,” added Johnson, who chairs the council’s Affordable Housing Committee.

Several community meetings and smaller focus group meetings have been held over the last five years, and Pulama Lana’i is looking at current market conditions, completed studies, laws, community feedback and other factors when proposing the project, according to project consultant Munekiyo Hiraga.

“The applicant is concerned that the homes in the affordable category will sit empty if the ratio is increased to a higher proportion, due to income qualifications,” Munekiyo Hiraga said in a written response published in the final EA. “Lanai is different than Maui. The main issue is lack of inventory, not necessarily the ‘affordability’ of homes. On Lanai, multigenerations live in one home because there is lack of inventory, not because they cannot afford to relocate.”

The Lanai Planning Commission asked the company why the focus had shifted from a for-sale model to a 100-percent rental community. It added that a strong desire of the community is that new housing projects would be available for fee-simple ownership.

Munekiyo Hiraga pointed out that 40 percent of the occupied units on Lanai are renter occupied, while the other 60 percent are owner occupied, according to a 2019 American Community Survey Housing study.

“There is diversity in the community regarding tenure of occupied units,” the consultant said.

Also, Hokuao would complement other residential housing projects, such as the proposed Lanai City Maui County Affordable Housing Project and the future residential development for the state’s Department of Hawaiian Home Lands, it added.

Citing news reports that said infrastructure cost impeded the county project, the consultant said Hokuao would bring infrastructure closer to the property line of the county project, which could bring the county’s infrastructure cost down.

A large number of Lanai residents also expressed concern over the proximity of the project to a county wastewater treatment plant, according to Johnson. On days with no trade winds, residents report a strong odor wafting out of the facility and into the proposed project area, he said.

“I have been a resident for 42 years. The odor is sufficient to bring tears and a runny nose,” wrote Fairfax Reilly of Lanai City, adding that people with breathing issues are impacted.

The project will have a buffer of 600 feet from the boundary of the wastewater treatment plant, according to the final EA.

Pointing to the extensive air quality section of the report, Munekiyo Hiraga said such facilities are not considered significant sources of air pollution but can result in a release of small amounts of airborne odorous compounds. The types and compounds in the air are generally not considered hazardous to human health, but can smell and constitute a nuisance for nearby residents and businesses.

Hydrogen sulfide measurements were collected during a study, and there were no measurable hydrogen sulfide concentrations at any location along the plant perimeter, according to the consultant.

Hokuao will also include a 1-acre public park, a 1,500-square-foot public community center and 60 parking stalls for Hokuao residents, according to its draft environmental assessment published late last year.

Although the draft EA said two- and four-bedroom units would be constructed, the final EA said due to recent substantial increases in construction costs, the project would construct only two-bedroom homes for all units. Lots would be about 8,000 square feet.

Pulama Lana’i will be privately funding the project with assistance from the county on permitting and procedural requirements, according to the final EA.

The company is seeking fast-track approval under the state’s 201H affordable housing law, which allows exemptions from certain rules if the project is at least 50 percent affordable.

Recently the Maui County Council attempted to pass a hotly contested bill that would have increased 201H affordable housing requirements to at least 75 percent, unless the council finds merit in a project and makes an exception. The mayor vetoed the bill after it was passed by council, which eventually decided not to override the veto.

The Hokuao project requires 201H affordable housing approval from the council and a district boundary amendment from the state Land Use Commission. Also, county grading, building and subdivision approvals are needed.

The county Department of Housing and Human Concerns is the approving agency for the final EA.

To view the two-volume final EA, visit oeqc2.doh.hawaii.gov/The_Environmental_Notice/2021-05-23-TEN.pdf and click on “Hokuao 201H Residential Project.”

* Kehaulani Cerizo can be reached at kcerizo@mauinews.com.

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