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A conversion of what had been downtown Honolulu’s biggest office tower to residential use is about to enter a new phase with a lottery for affordable workforce apartments.
The owner of Bishop Place has made applications available for an Oct. 19 lottery to select tenants for more than an initial two phases of apartments reserved for households that meet requirements including largely moderate income limits.
Douglas Emmett Inc., a California-based real estate investment trust that owns the high-rise at 1132 Bishop St., will accept lottery applications through 5 p.m.
Oct. 12 and anticipates that the highest-picked entrants will be able to move into
20 units Nov. 1.
A second phase with
26 apartments also subject to the lottery is expected to be ready for tenants between November and February.
The lottery is part of a roughly $80 million plan
announced by Douglas Emmett in 2019 to turn the 25-story tower into The Residences at Bishop Place with 493 apartments in phases through early 2024 as office tenant leases expire, followed by remodeling.
Under a deal approved last year by the City Council, the developer agreed to have 51% of the apartments — 252 of 493 — meet city affordable-housing guidelines for households with largely moderate incomes for 30 years, mainly in return for regulatory fee waivers.
In some cases, however, rents for affordable workforce housing units in the tower are higher than some market-priced units, of which more than 150 have been occupied to date.
The Council granted Douglas Emmett waivers from paying certain fees, including about $4.8 million for park dedication and $186,000 for building permits, along with deferral of $1.2 million in wastewater system facility charges, in return for the affordable-housing commitment.
Under an agreement with the city, Douglas Emmett must reserve 99 of the 252 affordable units for households earning no more than 80% of the median income in Honolulu, with the other 153 affordable units reserved for households earning no more than 120% of the median income.
At the 80% level, monthly rent is $1,433 for studios, $1,577 for one-bedroom units and $2,073 for two-bedroom units. All these rents are less than the lowest comparable market-priced Bishop Place units.
But that isn’t the case at the 120% level. Here, affordable monthly rent for a studio is $2,538, compared with market rates that start at $2,000 and go higher depending on features of specific units, including views.
For one-bedroom units, affordable monthly rent is $2,720, compared with the lowest market rents, which begin at $1,920 or $2,600, depending on features including configuration, and go higher.
Two-bedroom unit rent in the affordable category is $3,264, compared with the lowest market rents, which begin at $2,850 or $2,950,
depending on features, and go higher.
Stuart McElhinney, vice president of investor relations for Douglas Emmett, said it’s not uncommon for market-price rent at buildings across Oahu to be below what is allowed under city guidelines for affordable housing tied to 120% of the median household income.
Ricky Cassiday, a local housing market analyst, agreed.
“It happens,” he said.
Douglas Emmett describes Bishop Place as modern, stylish apartments with 567 underground parking stalls, a fitness center and other amenities in the heart of urban Honolulu which will mainly fill a need for moderate-priced rental housing.
To qualify for affordable units, the income limit at the 80% level equates to $67,680 for a single person, $77,360 for a couple and up to $104,400 for a family of five.
At the 120% level, respective figures are $101,520, $116,040 and $156,600.
Applications are available at douglasemmett.com and must be hand-delivered to the on-site property management office between
9 a.m. and 5 p.m. Monday through Friday. It costs $50 to apply, and there is also a $75 nonrefundable eligibility certification fee that must be paid to the city.
The lottery is being used to find tenants for up to 161 of the 252 affordable units as they become available. If the lottery doesn’t produce enough applicants, eligible renters can be selected in the order they apply after the lottery entry deadline unless the director of the city Department of Planning and Permitting allows some other change.
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