The state will sell thousands of affordable rental apartments to a private real-estate developer, which could mean less of a burden on taxpayers, but a price hike for residents.

The Hawaii Housing Finance and Development Corporation Board of Directors selected Nou ka Hale, a joint venture between local developer Stanford Carr Development and Los Angeles-based Standard Communities as its leasehold partner for the state’s Affordable Rental Housing Portfolio.

Six properties will be sold, affecting 1,221 residential units and approximately 86,000 square feet of commercial space.

Pohulani Elderly in Kakaako, Oahu, 263 elderly units

Kauhale Kakaako in Kakaako, Oahu, 268 family units

Kamakee Vista in Kakaako, Oahu, 226 family units

Kekuilani Courts in Kapolei, Oahu, 80 family units

Honokowai Kauhale in Lahaina, Maui, 184 family units

Lailani Apartments in Kailua-Kona, Hawaii, 200 family units

State officials say the sale will see $53.9 million in capitol improvements, including renovations to apartment units and common areas.

“We’ve been serving Hawaii families since 1990 and have a 25-year working relationship with HHFDC, so the best outcome for residents is important to our team, and we will work tirelessly to ensure a successful transition,” said Carr.

Officials say rents at the properties will remain affordable throughout the terms of the 75-year ground leases, with maximum rents of no greater than either 80 or 100 percent of the U.S. Department of Housing and Urban Development Area Median Income (AMI) rent guidelines. Current residents at all properties will now be protected from large rent spikes going forward, and they will be allowed to stay in their homes indefinitely, the state notes.

For current residents at Pohulani Elderly, annual rent increases will be restricted to no more than two percent for the duration of the tenants’ residencies.

For current residents at the five family properties, annual rent increases will be restricted to no more than two percent for the next five years, and five percent for the subsequent 30 years.

State Rep. Tom Brower, chair of the House Committee on Housing, said, “I think the short answer is, the state has a very hard time of repair and maintenance of affordable housing. If we could do a public-private partnership, this could be a win.”

Brower says entering a partnership with a private developer could mean better maintenance for units.

“When the state needs to make the payments on repair, maintenance, staffing, it sometimes have to pay union wages, do procurement, assessments, and it always adds up. The private sector, they work quicker, on the fly, that may not be bogged down by bureaucracy,” he explained.

Brower hopes the sale is a good thing for residents.

“We need the state to monitor the outcome these coming years to ensure they stay affordable,” he said.

As for the taxpayers, Brower said “part of the problem is the taxpayer may not be able to continue funding projects like this. That’s why we want to develop public-private partnership.”

When asked how much the sale will cost taxpayers, Brower replied, “I don’t have the number, but what we do know is all projects like this, there’s always a backlog of maintenance, and caretakers are always asking for more money and they’re often underfunded.”

Hawaii Housing Finance and Development Corporation information officer Kent Miyasaki says the next step in the public-private partnership is a purchase and sale agreement.

There is a 60-day due diligence period to inspect the properties and review each other’s information.

Miyasaki says after which, both the state and Stanford Carr will have 30 days to close the deal.