Lanai Draws Tenants In Lottery For First Affordable Housing Project In 30 Years

Susan Howell

On Saturday, Makana Nuesca’s 5-year-old daughter crossed her middle and pointer fingers and flapped her arms like wings in a plea for luck.

Lanai locator map

“I told her we have to hope,” said Nuesca, 24, as she waited with jittery anticipation outside the Pulama Lanai leasing office where an affordable housing lottery was about to start.

It’s been nearly 30 years since an affordable housing project has been built on Lanai, where workforce housing is in short supply and families sometimes bunk together to keep a roof over their heads.

Workforce housing was inadequate on Lanai long before tech billionaire Larry Ellison bought 98% of the tiny island, including a third of its housing, for $300 million in 2012. But the problem has been intensified by an influx of hotel and construction workers employed by Pulama Lanai, the management company that oversees Ellison’s monopoly stake in the island.

Members of the Nuesca family at the drawing for housing in the new Pulama Lanai's Hokuao housing on Lanai.
The Nuesca family won an affordable housing lottery for a two-bedroom home at the planned Hokuao Housing Project on Lanai. Due to the island’s housing crisis, the family of four recently had to share a two-bedroom, one-bathroom home with five other relatives. Cory Lum/Civil Beat/2022

Until recently, Nuesca said she and her family of four lived uncomfortably in a two-bedroom plantation home with five other relatives until they could find a home to rent on their own. So when her family won an opportunity to rent a home at below market rate in the housing lottery Saturday morning, she declared the news a game changer.

“When else are we ever going to get the chance to rent a house?” Nuesca said.

Privately funded for an undisclosed price by Ellison, the creation of 76 units of affordable housing at the future Hokuao Housing Project marks a historic investment in the production of homes for low-income residents.

It’s also an investment in Ellison’s redevelopment plans for a 140-square-mile island plagued by staffing issues. Some employees of Lanai’s twin Four Seasons resorts, for example, reside in luxury hotel rooms — a symptom of the housing crunch. Construction workers from other islands routinely catch a ride to a job site on Lanai on a private plane owned by Ellison.

The purpose of the development is to help meet the island’s employment needs, said Noemi Barbadillo, Pulama Lanai’s director of commercial and residential properties.

“It’s not going to be the only one solution,” Barbadillo said. “But it’s a start. We really need to have the county, with their parcel, start moving along.”

Pulama Lanai Hokuao affordable housing units.
The 150-unit Hokuao Housing Project on Lanai aims to shore up a workforce housing problem that has made it difficult to attract professionals to move to the island and fill positions in fields ranging from hospitality and construction to human resources and health care. Cory Lum/Civil Beat/2022

A decade ago the county came up with a plan to develop more than 400 affordable units on the outskirts of Lanai City. The county appeared to abandon the project in 2015 because of the high costs to build sewer and water lines to service the undeveloped property. 

But the long-stalled plan to create homes for low-income residents has recently gained new momentum.

The Maui County Council this year made substantial increases in real property taxes on non-owner-occupied residential properties. By hiking up tax rates, the council was able to expand the county’s affordable housing fund to $58 million, the largest sum in its history. 

But it’s the mayor who is responsible for translating that funding into action.

“This is a developer’s dream,” said Maui County Councilman Gabe Johnson, who lives on Lanai and chairs the county’s affordable housing committee. “All we need now is the mayor to put this out to bid.”

Last summer Johnson went door-to-door to survey nearly 400 households in Lanai City to ask questions about people’s income and whether they would like to rent or own a home. Nearly 70% of 391 respondents said someone in their family unit is in need of affordable housing with a near-even split when it comes to favorability of the following options: rental, rent to own, for purchase, rent to own and then purchase.

“On Lanai, grandma lives with the kids and the kids’ kids,” Johnson said. “So this will enable us to spread out a little bit. But a lot of these homes are going to go to off-island construction workers that Pulama needs here. We also don’t have a dentist. So all those kinds of people coming here from off-island, this housing is for them, as well.” 

“It’s not perfect,” he continued. “No project is. But we need affordable rentals. We haven’t had affordable rentals in 30 years. So it’s due.”

Eight of the 76 affordable two-bedroom units at Hokuao will be rented out for $1,064 to $1,329 monthly, depending on the tenant’s earnings. Fifteen units will have a monthly rent between $1,330 and $1,594. And 53 of the affordable units will have monthly rent that falls between $1,595 and $1,860.

Ten of these affordable units are reserved for teachers, a stipulation that aims to correct a teacher shortage, imposed on the project by the Maui County Council.

Affordable housing options on the island are currently limited to the 39-unit Iwiole Hale apartments owned by Ellison and the 48-unit The Courts apartments. Hokuao would nearly double the affordable housing stock to 163 units.

Hokuao will also include 74 market-rate units. Occupation is one factor that may influence who gets to move in, according to Harrilynn Kameenui, Pulama Lanai’s senior vice president of administration and legal affairs and general counsel.

“It’s difficult to get people (to work) here if you don’t have a place for them to stay,” Kameenui said. “But in line with that are the needs of the residents here. Many of them are in multigenerational homes and they need their own space. We don’t have that right now. So this meets a combination of everybody’s needs.”

Pulama Lanai Director of Commercial and Rental Properties Noemi Barbadillo assists Council member Gabe Johnson in a raffle of folks that applied for affordable housing in the Pulama Lanai's Hokuao's housing on Lanai.
Maui County Council member Gabe Johnson reads the names of winners in an affordable housing lottery as Noemi Barbadillo, Pulama Lanai’s director of commercial and residential properties, assists him with a microphone. Cory Lum/Civil Beat/2022

The project is not, however, without criticism. Originally pitched to the Lanai community as a development of homes for purchase, homes at Hokuao are now only available for rent, a change that has led some residents to condemn the project for catering to off-island workers more than the island’s roughly 3,000 deeply rooted residents.

There are also a lot of rules and limitations.

All of the units come fully furnished down to the art on the walls. There are two standard bedroom furniture options — two king beds or a king bed and two twin beds.

There are no children-sized beds or cribs available. Small personal furniture items may be brought in by tenants with permission.

Each unit comes with two planter boxes on the back lanai. Additional planter boxes can be requested, but tenants may not put plants in the ground and potted plants are not allowed.

Renters may have a maximum of two indoor cats or dogs weighing 45 pounds or less with a pet deposit equivalent to one month’s rent. 

Rent includes electricity (the roof of each unit will be equipped with Tesla solar shingles, as well as battery storage), wifi, water, trash, sewer and landscaping. Every unit will have three 85-inch televisions and a detached two-car garage. Amenities will include a community center and a one-acre park.

The first phase of Hokuao homes — a mix of affordable and market rate units — is expected to be ready for move-in early next year. Construction of the 150-unit project is expected to wrap up in 2024.

So far, about 160 applications have come in for the project, with nearly 60 families applying for the affordable units.

Civil Beat’s coverage of Maui County is supported in part by grants from the Nuestro Futuro Foundation and the Fred Baldwin Memorial Foundation.

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