Banking on Affordable Housing in Honolulu

A Honolulu bank building has been turned into affordable housing for very low-income residents with an adaptive reuse funded through Historic Tax Credits (HTC), Low Income Housing Tax Credits (LIHTC) and subsidies from city, county and state sources.

The Hocking Building’s developers include Skyler Pacific LLC, Pacific Development Group through its affiliate Hawaii Pacific LLC and Waialae Avenue Partners LLC, working with the State of Hawai‘i Housing Finance and Development Corp. (HHFDC), the City and County of Honolulu, Hunt Capital Partners and First Hawaiian Bank.

Skyler Pacific LLC partner Kevin Unemori notes that the project achieved income limits as low as 30 percent of area median income (AMI) even in one of the costliest housing markets in the country.

“Given the expensive housing market, we know that there is a high demand for more rentals at this level in urban Honolulu. To help cover the rent, some tenants will receive rental support through programs like Federal Section 8 vouchers,” says Unemori.

The Hocking Building is said to be one of the most affordable projects in Honolulu and the island of O‘ahu. As a condition of government financing, rents will remain affordable for low-income households for at least 61 years.

Of the 40 units in the project, four are reserved for those at or below 30 percent AMI and 35 units for those with income limits of 50 percent AMI. The final apartment is for an on-site building manager.

The unit mix is 25 studio units, six one-bedroom/one-bathroom units, eight two-bedroom/one-bathroom units and one two-bedroom/one-bathroom manager’s unit.

The 50 percent income limit for Honolulu is currently $48,750 for a single person, $55,700 for a couple and $69,600 for a family of four.

Based on the 2024 U.S. Housing and Urban Development (HUD) guidelines, rents (including utilities) will range from $731 for a studio for those at the 30 percent AMI level to $1,566 for a two-bedroom for someone at the 50 percent AMI level.

The developers were drawn to the project “because it provided an opportunity to accomplish multiple goals, not only helping provide affordable housing for a demographic, especially in need but also helping to revitalize and support the economic viability of the downtown Honolulu Chinatown District and preserve the historic character of the area,” says Unemori.

The $33 million project was financed through a Rental Housing Revolving Fund loan and Federal and State LIHTCs administered by HHFDC; Federal HTCs administered by the National Park Service; an Affordable Housing Fund Loan from the City and County of Honolulu; and financing from First Hawaiian Bank. The LIHTCs and HTCs are syndicated through Hunt Capital Partners.

The project architect is CDS International, Inc. The contractor is Alan Shintani, Inc. and the property manager is Indigo Real Estate Services, Inc.

The renovation took approximately 18 months. The target population is seniors and families. A grand opening was held last month.

The project is in the Chinatown district of downtown Honolulu. Located at 2 North King St., the Hocking Building is near bus lines, car share locations, Biki bike rental docking stations, a future stop for the Honolulu Rail mass transit project under construction, many small shops, indie art galleries and restaurants ranging from trendy to traditional Chinese dim sum. It is also blocks away from the downtown Honolulu center of state and federal government and where a large concentration of businesses are based.

Many Amenities
The developer says the building’s amenities include an elevator, courtyard, fitness room, community room, high-speed internet, a computer lab, tenant storage, laundry facility and on-site manager.

Each unit also has central AC, a refrigerator and a stove range. The community meeting room will be open for use by neighborhood groups, further contributing to the building’s positive impact on the neighborhood.

Some supportive services will be provided. The Institute for Human Services, the largest non-governmental human services provider focused exclusively on ending and preventing homelessness in Hawaii, will provide services, such as specialized case management, health and wellness and employment support to residents at or below the 30 percent AMI level.

“An important part of the project is preserving the historic character of the building, which falls under the Honolulu Chinatown Special Design District,” says Unemori. “The interiors of the renovated three-story building preserve or capture many historic features, including iconic red brick walls and bay windows.”

The building will also include sustainability features, such as a photovoltaic system, solar water heating, Energy Star appliances, LED lighting and low-flow plumbing fixtures.

A Detailed History
The adaptive reuse preserves a building that has stood in Honolulu for more than 100 years.

The project comprises the three-story Hocking Building constructed in 1914 and a section formerly part of the Aseu Building constructed in 1886.

The Hocking Building was originally built as a hotel. The first floor housed six stores; the second floor was for rent as “sample rooms” where traveling salespeople could display their goods; and the third floor was leased for rent, according to the developer.

The building served as residential and office space until 1967 when it was leased to American Security Bank, and then subsequently to First Hawaiian Bank. First Hawaiian Bank vacated the property in December 2022 when it was sold to the developers.

The city and county of Honolulu gave a more extensive history of the building in a 2022 document.

“The Hocking Building was built by Mr. Albert Hocking, a prominent businessman and Republic of Hawaii Senator from Maui.

“Mr. Hocking moved to Honolulu in 1899. He began the Honolulu Brewing and Malting Company (Primo Beer) and served as its president and general manager. In 1914 Mr. Hocking built the Hocking Hotel at the current site. The scope of the project changed on July 9, 1914. It was reported in the Pacific Commercial Advertiser “Hocking Building to be Enlarged.”

“Hocking had acquired the neighboring Aseu Building. An article by the Honolulu Star-Bulletin, July 14, 1914, noted, “A. Hocking, having bought the intervening land, will extend the three-story building…he is erecting on King Street to include the Nuuanu street corner and give it a frontage on the latter street.” He then integrated the two buildings allowing access to both.

“The initial cost was approximately $45,000. A marketing point of the era was “all the rooms are to be provided with electric lights and running water.

“The building served as residential and office space until 1967 when it was leased to American Security Bank, then subsequently assigned to First Hawaiian Bank, when it was completely converted to office space. In 1979 the interior of the Hocking building was completely gutted by fire. Between 1979 and 1981, Tax Office records indicate that the building lessee spent over $2.3 million renovating the building.

“The lessee renovated portions of the building again in 1987 at additional expense.”