Highridge Costa Development will lead a mammoth effort to create 10,880 affordable homes in Hawaii.
The firm has been named the master developer responsible for replacing part of the state’s aging public housing inventory with new mixed-income developments for extremely low-income individuals, growing families, and workforce employees.
The Ka Lei Momi Redevelopment Project calls for the redevelopment of nine properties on four islands.
“This falls consistent with our mission statement,” says Michael Costa, president and CEO of HIghridge Costa. “We’re most interested in changing lives.”
The project is important because several properties are severely distressed and need to be replaced or rehabilitated, he says.
The addition of nearly 11,000 new units also comes at a time when the median price of a single-family home tops $1 million in many areas of Hawaii, and high rents are putting apartments out of reach for many workers. It’s also troubling that Hawaii has one of the highest rates of homelessness in the country with 41 people experiencing homelessness out of every 10,000. Nationally, about 18 of every 10,000 people were homeless on a single night in 2022.
“The Ka Lei Momi Project is the start of our journey to revitalize multiple communities within our public housing inventory,” says Hakim Ouansafi, executive director of the Hawaii Public Housing Authority. “Redevelopment presents an exceptional opportunity to close the gap between the need and supply of affordable housing in Hawaii while also transforming our existing low-density public housing properties into modern mixed-use, mixed-income, transit-oriented communities. The only option to serve the waitlists and give choices to our residents to remain near their ohana is to build more housing, especially in areas where there is concentration of poverty.”
The Ka Lei Momi Redevelopment Project is believed to be the single-largest affordable housing transaction in the state. Typically, housing agencies will work on one property at a time, but the Hawaii Public Housing Authority decided to bundle multiple sites to address the need for affordable housing.
Headquartered in Gardena, California, Highridge Costa beat out several other national affordable housing firms for the job.
Its growing presence and experience in the state likely helped the firm. The company entered Hawaii six years ago and has built up a 2,800-unit pipeline, according to Costa. So far, it has completed two developments with 297 affordable apartments and is nearing completion on a third development, a 222-unit affordable senior housing community plus two managers’ units in Honolulu that has drawn interest from more than 2,000 people even before finishing construction.
The Ka Lei Momi Redevelopment will cost an estimated $6.6 billion and be about a 10- to 15-year effort.
Key funding sources will likely include 4% low-income housing tax credits and tax-exempt bonds.
Highridge Costa used the credits and bonds for their earlier developments in Hawaii. The team will also explore the availability of state and city funds.
One of the first projects that will be redeveloped is the 364-unit Mayor Wright Homes in Honolulu, which has been known for its deplorable condition over the years. The plan calls for creating about 2,800 units in new high-rises on the 17.5-acre site.
Through its earlier developments, Highridge Costa has been able to cultivate relationships with Hawaiian Dredging Construction and other companies that will help the firm tackle the upcoming projects, according to Costa.
