What Happens To Your Affordable Housing When Income Rules Run Out?

Lynda Lydon spent a year on the waiting list before moving into a seven-story building on Queen Street in Kakaʻako that she hoped to call home for the rest of her life.

A friend living there had encouraged her to relocate to Honuakaha. It was reserved for seniors over 62 with incomes less than 60% of Honolulu’s median income, which at the time, in 2020, meant under about $52,000.

Lydon, now 73, decorated her 350-square-foot, third-floor studio with Endless Summer prints and family photos. Volunteered at a cat care charity. Became a regular at Ala Moana Beach Park. Paid her rent — which started at $600 a month and covered electric, water and sewer utilities — on time every month. 

“When I walk out the door, I just think ‘I'm the luckiest person in the world, I live in paradise,’” said Lydon, a former Boston cop who went to college in Hawaiʻi.

But inside Honuakaha, things have taken a turn for the worse this year. 

The building was developed and owned by the Hawai‘i Community Development Authority, whose headquarters are directly next door. It was built with federal low-income housing tax credits that came with a condition: its senior citizen apartments had to remain affordable for 30 years. That commitment expired last December, leaving the complex no longer set aside for seniors, with no limits on rents aside from what the market will bear.

The change has spurred growing uncertainty among Honuakaha's elderly tenants, as questions swirl about rent increases and what the future holds. Many fear they’ll be priced out of their building. 

“Seniors here are trying to find other senior housing because we know we are pretty much at the edge of what we can afford,” said Lydon, whose rent jumped by 16% this year. Authority officials blamed that increase on a management mistake that had allowed her to pay less than she should have.

Around the state, affordability requirements will expire over the next three years for at least 600 units in seven other buildings — some reserved for seniors and others that aren't — built with the same federal tax credits that financed Honuakaha. It's a daunting prospect in a state where affordable housing is at such a premium.

Since Honuakaha is owned by a state agency responsible in part for affordable housing policy, that adds an expectation that the government should protect the kūpuna who call it home.

The authority was created in 1979 to plan and manage development on certain state lands, including in Kakaʻako, where its mission also includes overseeing urban redevelopment and infrastructure.

Officials with the development authority have pledged that no Honuakaha tenants will have their rents raised or be evicted as a result of the affordability requirements expiring, and rent increases will only be made to keep pace with building expenses.

“Our normal yearly rent increase due to rising costs, which really is about 3% or 4%, that will happen,” Craig Nakamoto, the authority's executive director, told Civil Beat in June — a statement at odds with tenants' recent experiences with spiking rents.

At the same time, the development authority, freed from income and age restrictions, plans to rent units that come open and those now empty — 30 were reported vacant in August — for hundreds of dollars more than current elderly tenants are paying. 

Some in the housing policy arena say that's a tested model and a realistic way to keep rents affordable for the remaining renters, who at last count occupied roughly 120 of 150 units. But they acknowledge that will gradually reduce the number of affordable units and that without a guaranteed limit on rent hikes, the seniors who live there now are on unstable ground.

Tenants also worry the building’s new management company and a new mix of tenants will make Honuakaha less kūpuna-friendly. And while the development authority insists the transition has been smooth, the new property manager has raised hackles by discouraging socializing in the lobby and telling tenants they must change their own lightbulbs.

To top things off, many residents also have been hit with steep bills for back rent. Last week, that message was driven home by letters taped to tenants' doors around the building announcing what they owed and threatening them with a collection agency unless they contacted building management and paid in full by Monday.

“They’re doing this so they can get seniors out of the building and rent it at retail rates,” said Roy Lim, a nine-year tenant born and raised in Honolulu. “They’re trying to make our lives miserable. The tension and stress is horrible.”

Higher Rent Increases

Even though Nakamoto told Civil Beat that going forward yearly rent increases would likely run in the 3% to 4% range, Honuakaha tenants received bigger rent hikes even before the affordability covenant expired, and they have been hit with much higher ones since.

Many of those increases have been part of an ongoing, halting effort to address longstanding financial problems at the development. In 2021, the authorityʻs board was informed that the project was running a $25,000 monthly deficit and owed $800,000 in unpaid maintenance fees. Rents had not been raised between 2013 and 2021 — even though federal law allowed hikes of up to 10% — numerous units were in disrepair or vacant and large repairs had not been properly budgeted for in more than a decade, a board committee found.

The authority started raising rents in January 2022 — a board committee had recommended a 5% annual increase and also that vacated units should be rented out at closer to prevailing market rate — but the actual increases have been inconsistent while the building cycled through multiple management companies and the authority tried to get the building in the black.

Authority officials have acknowledged that publicly.

“Rent increase is directly a function of the expenses,” Garet Sasaki, the authority's chief financial officer, told the board last December. “Whatever bills we foresee haven’t been paid in the following calendar year, the rent income has to cover that amount. This year, based on the projected budget for 2026, it was 10%.”

For some, the rent hikes have been even higher.

When Derek Miyasoto — a former cook whose kitchen and hallway walls are hung with pots, pans and fishing rods — moved in four years ago, he paid $635 a month in rent, he said. 

It then went up 5% to $662, then 8% to $715. Then, in January, it was hiked by 16% to $826, more than half his monthly Social Security Disability income.

“I will become homeless at the rates they charge,” Miyasato said. 

Lydon received the same increase from $715 to $826. Then — like Miyasato — she was told she owes money because the previous building manager had entered her rent incorrectly in the automated payment system and she was supposed to have been paying $751 a month. 

She is now fighting a bill of nearly $1,000 that she says is unjust because she was never told she was paying an inaccurate amount.

More: This Elderly Woman Was Threatened With Eviction — Over 50 Cents

In July, the building’s new property manager, Paramount Properties, told Miyasato he owes $2,950 in back rent and other fees. He hasn’t paid any of it yet and he said that ever since being told about the debt, he has experienced extreme anxiety. 

“They’re trying to get rid of us,” he said. “But I have nowhere to go.”

Mistakes, miscommunication and confusion over rents thread the experiences of Honuakaha tenants through the years, adding to tenants' mistrust of the building's owners and managers and uncertainty over future developments. 

In addition to the increases, at least four tenants had their rents recalculated this year in the opposite direction — lowered to $1,100 from $1,187, an amount Nakamoto said they had been paying since a previous property manager's error.

“I was floored,” said Ruth Tong, 77, a tenant whose rent was dropped. “It’s never happened to me in my life.”

Patricia Shields is another example of the haphazard way the authority and its management companies appear to have administered the rent schedules.

By November 2024, she was paying rent of $834. That month, she was told that her rent would be raised to $1,100 in the coming year — one of numerous such letters that went out to tenants. 

Shields’s reaction: “Is this real?” She banged on the door of the manager at the time to find out, she said. Indeed, it turned out to be a mistake.

A new letter arrived. It said her increase was actually to $876, a 5% raise instead of 46%. Then, a year later, another letter arrived: her rent was being lowered to $826. She had been paying $50 more a month than her actual rent. Now she's due what she overpaid since April 2025.

While the refund would be welcome, nobody has offered it yet. It feels like the authority and its string of property managers are treating elderly tenants carelessly, at best, because of their age, said Shields, a former Waikīkī neighborhood board member who moved into Honuakaha in 2020.

 “We’re living in a time when seniors have been discounted or forgotten probably because we don’t have the money,” Shields said. Referring to the authority, she added, “None of us are seeing any evidence that they care.”

'I Can't Stop Them From Worrying'

Nakamoto said the agency he leads has the interests of Honuakaha’s elderly tenants at heart and is doing what is necessary to keep their rents lower. 

 “We're not, the state is not, in the business of trying to increase the rent by so much that it's going to force people out,” Nakamoto said.

He said that message was delivered clearly at a meeting the authority held for tenants this past June to prepare them for the latest change in property management.

“It was stated at the meeting by my staff that there was going to be no evictions, no impact on them, no rent increases as a result of this,” Nakamoto said. “I can only tell them that, I can't stop them from worrying anyway.”

But Honuakaha's senior tenants are in a vulnerable position, and rent increases at variance with what they were told to expect don't help, said Arjuna Heim, director of research and housing policy at Hawaiʻi Appleseed, a progressive think tank and advocacy group. 

“Those seniors are at risk of a sudden price shock and there is no sort of accountability or barrier to prevent that from happening,” Heim said. “If they're telling the seniors they're not going to raise their rents more than X, then they should not raise their rents more than X.”  

The plan to rent open units for market rents — Nakamoto said $1,400 is likely to be the starting rent — is intended to keep Honuakaha affordable for the existing senior tenants and also make up financial ground.

“We're trying to keep those rents the way they are," he said. "We try to keep it minimal, even though we've got to try to keep up with inflation. But we have to do certain things to keep the project viable because if this project is not viable in the future, those people have nowhere to stay.”

Being able to rent to anyone regardless of age or income, Nakamoto said, “really opens up the rental pool. We hope that will fill up the vacancies … thereby improving the financial stability and outlook in the short term.”

That is a plausible way to safeguard Honuakaha's senior residents, Heim said: “Increase costs in certain units so that you can keep other units at a lower cost. That's the thesis of inclusionary zoning,” a pillar of government efforts to encourage private developers to build more affordable housing.

And $1,400 for a studio is an affordable rent that could make a desirable neighborhood more accessible to a broad range of prospective tenants, Heim said, supporting the agency's aims to develop a densely populated urban neighborhood. 

“For the seniors there, it's tough because of the increased risk of displacement,” she said, “but there's also a huge benefit for a young person who wants to live in Kakaʻako and walk to work in a neighborhood where more things are happening and you have more access to groceries and don't need to rely on a car.”

Heim added: “Every downside has a benefit in this situation, right? But it's a question of how outsized the downside impact on seniors will be, and that's going to remain to be seen.”

'Political Will And Money'

Kim Coco Iwamoto is skeptical about the authority's approach. The state representative — whose House District 25 includes Honuakaha — said Nakamoto told her in August there were 30 vacant units waiting to be rented out. As of last week, Iwamoto said, her staff could find none that had been listed.

“It's hard to hear that you're raising rents when you're also sitting on empty units,” said Iwamoto, who has scheduled a meeting with tenants in late September about their concerns. “The operational dysfunction is putting the burden on the most vulnerable population.”

She added: “What we do know really clearly is that when we jack up the rent, it means less money for food, which means kūpuna are going hungry.”

The authority faces a clear choice, said one prominent Hawaiʻi developer, Stanford Carr, who in 2019 bought six affordable housing properties from the state under an agreement to reserve them for 75 years for tenants with incomes up to or below 80% of the state's median income.

“They should either sell the building under a new 75-year ground lease to a qualified developer or seek an appropriation to renovate the property,” said Carr, who bought a 263-unit Kakaʻako senior housing project, Pohulani, in the 2019 deal. The development authority and the Hawaiʻi Housing Finance and Development Corporation — the state agency that finances affordable housing projects — partnered to build Pohulani using state bonds and federal housing tax credits. The authority was not involved in managing the property after it opened in 1992.

Carr said he invested about $20 million to upgrade and renovate Pohulani. Tenants who lived there prior to the sale pay rent based on a formula involving 30% of their income, a monthly subsidy of up to $300 from the stateʻs Rental Assistance Program, and the unitʻs contract rent. While all Pohulani units are for people making up to 80% of the area's median income, to keep the complex affordable he charges rents that are approximately $600 below the maximum allowed, and raises rents 3% a year.

“Political will and money” are required to keep Honuakaha affordable, he said, noting that the 2019 deal came about because the state did not have the $85 million necessary to upgrade and modernize the six properties. He suggested it may suggest a lesson for the development authority.

“These properties require the personalized attention necessary to upkeep with recurring maintenance and to address repairs including budgeting for replacement reserves,” Carr said.

The authority board has discussed selling Honuakaha, and Nakamoto said in the long term it intends to “sell the building or transfer this to some other party, like a nonprofit housing group, to run.” That isn't feasible with the building running such a deficit and with the vacancies it has, he said.

Asked when that might happen, he said, “We're not there yet.”

Iwamoto would prefer to help the property get in the black instead of selling it. She said she has asked Nakamoto repeatedly what the agency would need to keep Honuakaha as affordable senior housing and can't get an answer.

“Why would the state give away this incredible asset that houses so many kūpuna who need housing?” she said.

For Lydon, while she still enjoys living at Honuakaha, developments at the building have taken their toll.

Over the years, amenities have been removed such as shared lanais and a garden where tenants once grew vegetables and socialized. Catholic Charities caseworkers once stationed in the building's recreation room to help tenants with questions and concerns are no longer invited around. The rec room is often locked nowadays. The elevators break regularly, most recently for weeks before and after Hurricane Lala, forcing residents who couldn't negotiate the stairs to cancel appointments and call for help getting groceries.

Lydon has no hot water after 5 a.m.; management says to run the water for 20 minutes to heat it up. Parking fees, too, just went up by $25 a month, which she only learned in September, she said, after she paid her regular $100 fee and was told that she was two months in arrears.

The current state of affairs is on the authority's shoulders, she said.

“They didn't manage it properly and it fell into disrepair and they no longer care about the original reason it was built in the first place,” Lydon said. “They should be ashamed of themselves. The salaries they make and they couldnʻt run one building.”

Meanwhile, her rent ticks upward. It's roughly two-thirds of her Social Security income at this point. A small pension covers her remaining expenses, she said. 

“It went up $100 this year. If it went up $100 next year and the year after that, that would be it for me. I could no longer afford to live here. It's scary,” she said. “My kids say, ʻOh, you're exaggerating, you can always live with us.' And I'm thinking, ʻThat's not how I pictured my retirement, you know?' Having to live with my children because I can't afford rent.”