Here’s a little vignette about economic inequality to start out the new year. I suppose it’s an example of the 1% lifestyle, or maybe the .1%.
The housing crisis looks a lot different from up there at the top.
There’s a new house being built not far away, just around the corner at the end of Kealaolu Place. There’s a dust fence now around the lot, and an existing home is being demolished.
So being curious, I had to check real estate records to get more info.
The existing luxury home, the one that is being demolished, was just 12 years old, brand new in 2008, according to the city’s building permit records. The building permit had been issued in March 2007.
The 2-story house is/was on an 11,500 square foot lot that stretches along Waialae Stream, with a panoramic view of Waialae Golf Course. The existing home, the one currently being demolished, was valued for real property tax purposes (in 2020) at $2,849,100, land value of $1,471,700, for a total assessed value of $4,320,800.
Existing home currently being demolished
New owners bought the property in September 2018 for $4,400,000, real property records show. Yes, that’s $4.4 million.
And they applied for a demolition permit a year later, as well as a permit to build a new home.
The permit file says the new building will be a 6,589 square foot 2-story home with pool and two wet bars with an estimated construction cost, accepted by the city, of $1,800,000.
That comes out to just pennies over $273 per foot, if I calculate it correctly.
That is a dirt cheap per foot price for Honolulu, and I doubt someone willing to pay $4.4 million and then scrape off the existing house is going to replace it with something on the low end.
Don’t get me wrong. I’m sure it is going to be a gorgeous new home. I’m equally sure it won’t be built for $273 per foot.
I did a quick search for current costs for new construction in Hawaii and found these estimates for a single family home.
Single-family home
- Low (per square foot) – $290
- High (per square foot) – $780
It’s hard enough to process the degree of economic inequality that makes a $4 million scrape-off possible.
But then to have the city give up revenue by underestimating construction costs of this luxury home, which immediately reduces the permit fee. Okay, it’s not a huge discount, but to this ordinary person, that gift from the city in the form of a low-ball cost estimate just adds insult to injury.
I haven’t been able to find much at all about the current owners of the property, except that they also own several high priced Kakaako condominium units, including a 3,567 foot, 4-bedroom, 4-1/2 bath 36th floor unit in the 1108 Auahi Condominium currently valued for tax purposes at $6.1 million.
To be fair, the owners are paying over $39,000 of property tax this year on the Kealaolu Place property, records show. That will go down if or when it becomes their primary residence.
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Things come full circle. Kahala luxury homes built around the golf course were once pig farms and cow pastures. Younger generations don’t play golf like before and the game has plummeted. We may see public parks and open space for the people in the future as the luxury golf era fades.
As houses get larger, cost psf declines
https://the-opendoor.net/the-biggest-factors-affecting-the-cost-per-square-foot-to-build-a-house/#:~:text=The%20bigger%20the%20house%2C%20the,square%20footage%20in%20the%20calculation.
On a more pedestrian level, a unique apartment bldg down the road a piece from my Moiliili condo was purchased from KSBE, who had neglected it for some time. The new owners are “fixing it up” by only obtaining a plumbing permit tho it’s undergoing a complete renovation—on the cheap. Permitting was alerted and reported back that they had issued a citation (detail?) and the work continues with its Asian crew.
Old trees were cut down. Paving will replace grass in courtyard for more parking.
The character of this and other neighborhoods is changing dramatically by builders who are supported in their focus on the bottom line, over the area quality of life.
What is the address of such project? I lived in Moilili for years and would walk around the neighborhood witnessing changes. Haven’t been back, though. The last one was the single family house on Isenberg that became a 6-unit apartment building, primarily wood, with parking underneath.
I know the city has also bought or did buy and were supposed to renovate a couple of 2-story walk-ups for the homeless.
Mahalo
Ian, someone should find the owner or talk to the ‘Asian crew’ (thanks to kateinh) working on the project and find out what’s going in. But make sure you bring an interpreter with you. If you get phone numbers you’ll have to dial a ‘1’ and the country code first to find out who’s doing this. It’s the same group as those behind the monster houses.
Let’s be real…the “Asian crew” are CHINESE. I’ve been by several monster home constructions (after complete demos of existing houses) in my ‘hood over the past few years and they are ALL speaking some dialect or other of Chinese. More and more Chinese owned contractors popping up all over the island. None of this is necessarily a bad thing or good. Just reality. They can do a job a lot cheaper and, in the experience of a close friend that had a Chinese contractor do his ADU, they do it a lot BETTER as well.
As for someone buying up multi million $ apartments in Kakaako and now properties in Diamond Head/Kahala area, just think of cash loaded “Asians” wanting to move their money out of a country where the government system is not solid or reliable and into a place where at least the legal system gives them a chance. I’m just glad that the new Defense Spending Act that Congress overrode Trump on makes stipulations for transparency in shell companies now as a way to combat corruption and money laundering.