This proposal has the potential to bring billions of dollars to the rail financing program – at least almost $8 billion – despite taking a little more than 30 years to accumulate by building permanent affordable housing as rail stations. In the process, my proposal has the potential to solve other problems as well such as acquiring and retaining great educators, solving the feral cat problem by expanding the Honolulu Zoo, creating jobs, extinguishing the Section 8 waitlist, and emptying homeless shelters to make room for the truly vulnerable in the community.
Sounds a lot better to me than a GET tax increase on everyone, forever, if I do say so myself.
The idea is to find investors in the form of formal venture capitalists, current business owners, or crowdfunding to own shares in the commercial and hotel space on the rail station level of the building. The residential space revenue would be dedicated to the support of rail completion to UH Manoa while housing tens of thousands of people permanently.
Upon review of the literature available at the HART office regarding the railway construction, I noticed that the Civic Center Station is to be located at Halekauwila and South.
Google Maps indicates that the block is 500 feet on each side. It is currently under construction to become Keauhou Place, an affordable housing building developed by Stanford Carr and Kamehameha Schools. So far it seems everyone is on the right track (pun intended), but I want to think BIGGER.
Here’s my proposal for moving forward:
I envisioned a rail station like Disney’s Contemporary Resort in Florida, in which the monorail goes right through the middle of the hotel.
Five floors would be dedicated to the rail station. The other 40 would provide 2,560 Studio apartments that are 250 square feet,1,280 2-bedroom apartments that are 500 square feet, and 1,920 3-bedroom apartments that are 1,000 square feet for a total of 5,760 units at each of a total of 4 buildings, for a grand total of 23,040 housing units and 43,520 bedrooms!! That’s a lot of keiki off the street!!
Multiple rail station Super-Concourse Complexes could be used to fund the existing rail project, as well as the extension to UH Manoa, with buildings at planned rail expansion station locations at McCully, Date, Mo’ili’ili, and perhaps a special building at the UH Manoa terminal specifically for people that work in the education sector.
Now, I’ll show you the money:
I calculated the base rent from the cost of the absolute cheapest place to live in Honolulu, Waikiki Health’s Next Step Project. At $60 per month for a four foot tall, 30 square foot cubicle (24 square feet proper plus an allowance of extension approximately one foot past the wall) plus a roughly six square foot storage cubbyhole, NSP is valued at $1.67 per square foot. (Cubicles in the family section are larger, and families pay more than $60 per month.)
At this rate, a studio in my building would start at $417.50 per month, a 2-bedroom in my building would start at $835 per month, and the 3-bedroom would be $1,670 to rent.
In this “efficiency housing”, rent would be determined as a function of the lessee’s gross income. Each year’s monthly payment would be set at the base rate, or 33.7% of gross income, whichever is higher. 33.7% is based on the rate someone working 40 hours per week at Hawaii minimum wage, which was $7.75 per hour in 2016 when I initially developed this plan, would pay to rent a studio apartment. To qualify for an apartment, the lessee or lessees would need to meet the base rate at 33.7% of their gross income. Coincidentally since the minimum wage increase to $9.25 per hour as of 2017 an individual minimum wage earner would only need to work 33.7 hours per week at minimum wage to qualify. (Less than 40 hours per week is typical of minimum wage jobs.) The base rent for a 40 hour per week minimum wage earner is now $498.76; I used this base rate to calculate the low-end revenue estimate after 30 years for the rest of this proposal. The base rate for a 2-bedroom would be $997.52 per month, and the base rate for a 3-bedroom would be $1995.04 per month.
It is highly likely, however, that many residents would be paying more than the base rate due to their income. For example, I gross $2016 per month, which means that my cost to rent a studio would be $679.39, not $498.76. I would not qualify to rent a 2-bedroom until I met the income requirement of at least $2,477.75 per month. This is still an incredibly attractive offer to me, and probably many others struggling to pay market rent right now.
Lease-to-own would be the most attractive aspect of my proposal for many people that qualify. A non-refundable deposit would be required as down payment in order to initiate the agreement, which would be a 30-year non-transferable, non-subleasable mortgage. In addition to rent, GET tax would be added as sales tax. The mortgage financing rate would be the GET tax rate again (which is higher than the current mortgage rate for regular home buyers). Property tax would also be applied, but would be used to maintain the building. If every unit is sold at the base rate, the total amount of money per month all-inclusive is $27,999,770. Per year is $335,997,240 (I believe this is close to the amount the GET tax increase brings in per year). After 30 years, the total revenue is $10,079,917,200. That’s over $10 BILLION as a LOW-END estimate!! Subtract approximately $2 billion to construct the stations, and you’re left with about $8 billion for the rail completion to UH Manoa.
I have also envisioned public parks occupying the open ground space at the center of the building, with pavilion areas or walking/running/biking tracks underneath the rail. A feral cat rescue sanctuary could be established on one of the rail station concourses as a special project of the Honolulu Zoo and Aquarium in alliance with the Hawaiian Humane Society. Perhaps the greatest appeal of my proposal to investors is that the four 5-floor rail concourses provide almost the same amount of retail space as Ala Moana Center, and what could be 4 four-floor hotels that at just $100 per night would generate an estimated additional $1.728 billion dollars in gross revenue over 30 years.
Let’s get creative about solving our problems!! Let’s think bigger, bolder, and brighter!!