 Ricky Keste. This is Think Tech Politics and Land. It was a show started by a very good friend of mine, Dennis Izaki, one of the more beloved people on Kauai, a good friend, great surveyor, fine mine. And he would go all over the place with his guests. I'm going to do the same with my guests today, Carlo Morales, who I've known. For three years, he came to me asking me to do a study on affordable housing. And if I look at the pantheon of my clients, Carlos is right up there in terms of being inquisitive. For that reason, I've invited him to come and talk to me, meaning I talk, he listens. But the background I'd like to emphasize is that he's younger than almost all of my clients. He might be the youngest. And he's persistent. He's got two portable projects up and running on the Big Island. And for that, I find remarkable. In setting this thing up, you have to put a title to this. And the title I chose was awards and rewards of affordable housing, the awards being really the hard thing to do in terms of getting through that step of getting your tax credits. The rewards, however, are spread deep and wide amongst those of us that do it, and particularly those of our community who live in affordable housing. So with that, I got Carlos to shake his head, to nod his head. I'll let him turn over. You want to help me with this? Absolutely. And good afternoon. Thanks for the opportunity to be here with you. You want to tell us how you got started? What led you? What of your background? I know you're persistent. So whatever you can share that has to do with persevering in a very rocky field. Yeah, absolutely. And thanks again. I started off on capital formation, mainly international financing on the equity side, and was involved with different developers, hospitality, and then eventually senior care. And seeing the difference in senior care development where it has a social impact is what led to now affordable housing in the latex space and in the workforce space. So we're certainly deeply rooted in the mission of affordable housing. The beauty of this industry too is everybody that's involved, whether it be the lenders or the consultants, everybody understands the need for affordable housing. And we're blessed to be in this arena with everybody else. You've come a long way. The first project you did was on the connoisseur, the second was on Heloside. I imagine the, whereas the communities are slightly different, the need is deep island wide. Any, I think you started out on connoisseur. Do you want to kind of characterize to some extent that start that community and what you found there and how you did it? Yeah, absolutely. So, you know, for connoisseur, it's really dear to my heart, especially, you know, our family moving over here back in 2004. And my mother being diagnosed with breast cancer and really seeing firsthand how fragile our community can be in different aspects. But the beauty of that story along with her survival and strength to go through that battle was that there was a community that stepped up to us, stepped up to support her, stepped up to support us as a family. Some community members that we didn't know, some community members that didn't have anything and they were still willing to give to others. And so that was really the foundation to the focus on concentrating in connoisseur for our first affordable project. We were blessed to be awarded a Leitech award for that project, 107 apartments. The administration here at Hawaii County has been amazing from the mayor down Susan Coons, the housing administrator, director, Kern in the planning department, and the countless other individuals that are just sort of in the background of champions of ours, you know, in the different levels of the planning department, the building department, the water department. I mean, it really takes a community as a whole to be successful. And so we're very proud of that project. And then obviously we took that momentum and started the Hilo project. But I'm hearing that is interesting. Two things. One, community. And I'll come back to that because the community is what we all look out on and participate in. But before I go there, can you kind of explain how you got awarded, what you put together, what are the key items? Where did you focus your energy? What skills did you need? Getting land of course was one. Yeah, we were blessed to have a landowner that gave us reasonable terms on our site control to be able to do the project. And our conversations with landowners are in collaboration in the spirit of doing good for the community. And so we've had an overwhelming support from different landowners in that respect. But yeah, site control starts the project, obviously the development team and the alliance of partners that we have to check off the different boxes of the different requirements for being able to propose a project. And then going through the entitlement process, the view zone process, obviously the application process through HFDC and the different requirements that are in that application and exhibit list that you need to fulfill. It's quite extensive and very complex. And so it's just not me that's part of the joint venture team that's putting this together, have great partners that are here supporting us. Some are outside of Hawaii. And so they recognize the need here in Hawaii. And we've been successful in those applications. Let's focus on land for a second because that is the building block, the first step. And on top of that, you have to have an owner that's willing to maybe take a risk and or maybe take lower reward. You see that every now and then that really good people do try and take lower than what market is. For instance, on Hawaii, you can see that they there's people that have a hunting units that are willing to rent to their friends that below market rates. But since this is a program about politics and land, I had to kind of salute that. That would be one thing. You've done two deals in both cases was the end use that you gave to the landowner when you wanted to buy it, recognized, appreciated, and in a sense rewarded. Yeah. Yeah. I mean, our objective is to create win-wins across the board. Our success is the landowner's success at some juncture or time. And the success of the project is a win for the county. And ultimately, the reason why we do what we do is to create the win for our community. And so Kona being designated as a low poverty area, which shows a more significant need for low income housing, it created a great opportunity to be able to create the win-wins for everybody that's involved in the process. Then how about the political community because to my ears and my mind, you're in the private sector, but you're partnering with the public sector. You deal with any number of public servants. And in this case, I would suggest, and I'm sure you'll validate, they're out to help you. And by help you, they are your intellectual capital partners. They're your goodwill purveyors. And it is a give-and-take type thing. So when they talk about this, are there any considerations that they provide you, insights that you provide, you get provided, anything from how to do it better, how to do more of it, shortcuts, long thoughts, and anybody in the government that's helped you that you can think of? Yeah, I mean, from the very top, Mayor Roth and his accessibility to take meetings and to discuss different topics. And obviously, you know, this is centered around affordable housing. And so that's a big initiative for him. Susan Koons, who is the housing administrator, very accessible, has, you know, both time in Kona and Hilo to be accessible. And again, going back to the different directors that we deal with, a big one being Director Kern from the Planning Department. I can't speak. There's so much I can say about them individually. There's a heart and passion to do more affordable housing over here. And I would say that Big Island is open for affordable housing development and the people that are in charge at the different levels and the people on the ground that are helping the process through the different departments. Anytime that we're talking about affordable housing, we got their full attention. And oftentimes, you know, the most critical needs is just to have somebody answer the phone call and get the troops together and let's get into a room and let's talk through the certain dynamic. And so, you know, I view the County of Hawaii and the leadership from my experience as a team that is on the same side of the fence as us, which our goal is to give back to our community with the much needed affordable housing and tackle it on a day to day basis. But everybody's accessible. One phone call away responses to emails and that can be really, really critical at times when you need to get answers figured out and passed on to the team and just move the ball and get it done. We've talked about moving the ball in affordable housing, but we've also gone up in terms of cost of housing, more expensive housing. We've gone down in less expensive housing. We've looked at different forms. The intellectual challenge is to satisfy all levels because they are connected, interconnected. So a solution at one can be helped at the other, usually most spoken of. If you do market rents, then that may open up some affordable rentals. And then if you do above market rents, which is inexpensive condos, that opens it up and that connection goes up and down. And it's not just intellectual challenge. It's putting the capital together knowing what kind of money is available for what, but then on top of that knowing the cost of production. Tell me, as you've gone along, has anything really struck you? And if you want to elaborate the saline piece of, say, homeless housing or another piece, please share that with people so that they can kind of see what it's like to toil in this field. Yeah, I think one comment that resonates that you said is, you know, basically the supply and demand of housing and each level of housing is needed in our community. And when one is done, it opens up the opportunity for those to move up into a different level of affordable housing or just housing in general. So as we focus on the mission of affordable housing, and we look at the different levels of affordable housing, you know, the 30 to 60 percent AMI for LITECH, you know, something that's in the 80 to 115 percent for our central workers and workforce. You know, what does that look like for rental? What does that look like for a for sale product? And then you look at the lower end of the spectrum for housing, maybe tied to emergency shelter to temporary shelter. If we don't have supportive housing, you know, in the permanent, you know, sort of section of affordable housing and, you know, permanent housing above that in different AMIs, then we get bottlenecked. And so, you know, I'm a champion of all our different affordable developers that are, you know, here in the state of Hawaii, there's some that are from other states. And, you know, we're in the fight together in a friendly competition way, obviously. But, you know, the goal is to provide more affordable housing in our community. And as a whole, we need more development teams out there to be proactive in the conversation so that we can provide, you know, more housing, you know, for our people. So, it's a very extensive conversation, very complex. Again, our focus is affordable housing at any level and have taken bits and pieces from a lot of different mentors and conversations that we had from other development teams who are doing amazing things. And again, I welcome them to the Big Island. I support them 100% and in anything I could do to help them, I'm just a phone call away as well. The one thing I do love about you is that you will go to go across the Pacific Ocean, stop in California for a while. You told me stories of Texas brought back Texas and affordable housing developer and the conversations we enjoyed over dinner were how he works with the public sector exclusively and that's his big success. And it's a bigger pond, it's a bigger thing, and you can take those and reapply them elsewhere. Duff-tailing on the goodwill and the friendliness amongst developers, some of the ones that I know that have been around the longest in particular Stanford was always helpful and he would say when I'm successful, we all are successful and he formed some great relationship. Craig Potasi is another one, although he can't play guitar, he thinks he's a country rock star. He's a Green Bay Packers fan, so. It takes a community and back to that whole thing. I'd like to go to one of the things that struck me about the big island in terms of the signs of the acuteness of the lack of shelter are all the people live in Hilo who drive over. The hill takes them an hour, hour and a half. They get there in the dark and they sleep in their car parked up and down the major highways and thoroughfares. And just seeing that sparked something in my mind which was somewhat akin to homelessness. I think it was Seattle that had the model of starting with just places where the homeless can come and store some stuff, take some showers, have hygiene, something that would root them. And I thought also that that could be the same model that would apply to all those people waiting every morning in the dark to wake up in their car and then drive to work. Any thought of that? It's the first time I've discussed it with you, so. Yeah. Well, I mean the first thought I have is Project Vision Hawaii and they have a mobile trailer for showers that goes around the island and I think on each island now. And so they're serving that demographic in that way. But going back to Stanford car and that example of those individuals that are sleeping in the cars, waiting to go to work at the resorts. His project that's tied to workforce right there in Waikoloa is a perfect example of a great product and a great development team that is putting their daily attention to providing that affordable housing. We need more, you know, and so we're trying our best with our team and our Alliance of Partners and as I mentioned, supportive of all the other different developers that are out there trying to do the same thing. And collectively, I think all of us as we engage in this conversation amongst ourselves internally with other development teams with the county, the state officials. That's, you know, I think the best way to get to that end result, which is obviously providing more affordable housing. Yeah, I think it rolls. You know, you don't know where to start, but if you're successful, spread up and down and outward. The one thing jumping way down the income spectrum that I've seen that did change my mind was the way that on the west side, there was a congregation of local people who were without shelter and one in their community went out. They all kind of gravitated around Wai'anae Boat Harbor, which had showers and bathrooms. And one of them, a tough old lady with a big heart, kind of worked with them and been working with them for many, many years before any of this ever became apparent. But has had great success in starting the thing. And then because there was evidence of it down there, the state paid enough attention to then go find them land up the valley. And they relocated, they took the model of being responsible for temporary shelters, lack of a better word. But in spite of it being temporary shelters, it's become a permanent community and a permanent spirit. And that kind of thing is laudable and hopeful that it works out. In some senses, we're very lucky to be in Hawaii with a modern society and all the conveniences. And yet, in another sense, some of the Pacific Islands, some of the places in Asia, which aren't as modern, to have a bigger sense of community, of village, of self-help. And that's one of the things I talk about. I haven't figured out how to help. But the other thing I really do look at is all the land in between Kona and say Kahala on the beach road, particularly the stuff above the expense of resource, but it's lava land. It's right on the road. It's got convenience. And the land is lying fallow. Again, back to politics and land, you needed a place to stay. And if it's land-based and it's continuous, then that doesn't get any better than that. So going forward, I'm looking at that and hoping in my ripe old age of 99 to see it happen all over the place, which is what, in five years. Where do you want to go in five years, 10 years, 15 years? Or where do you want all of us to go? What the heck? I think we need to all engage in the conversation and openly talk about the issue at hand, which is obviously providing more affordable housing. And I think together we can get further along. Obviously infrastructure, water and sewer and everything else tied to different pieces of land, especially when you look at Big Island as a whole. We have a whole bunch of land, but which land is tied to urban development and everything else. So I don't know, the example that you had of the ante, that's a great example of takes a village. So it takes a village of individuals to participate in the conversation at whatever level they have. And I think the important piece is to participate in that conversation. And for us and my goals, I hope that we can bring in the younger generation to be involved in the development process so they can be more familiar with the different terminologies and all the different pieces and complexities of it. And if you look at how development teams are formed and all the different expertise that come in all different angles, we need the younger generation to be active in this. And so my goal in the next five years is to have those interested individuals be part of the process. And I'll do my best to support them as a lot of mentors have supported me. And hopefully they can gain their independence and continue the fight and provide the housing for the next generation as they get older. So affordable housing, there's an endless need. So we will continue that and hope that we can bring others along for the right. What I've seen is, yeah, passion, shared passion is more than one plus one is one plus one equals three. The other model I like is mentors. Stanford's one of the great mentors, he does take time, loves his young guys. There's the family business, Gary Faruda and Craig Wotasi, both those families, second generation. Kobyashis, now that I think of it, interesting that they've gone really into affordable housing. And they have legacy, they have community base. It is, it's what's special about being in Hawaii, whether you're here for five years or 500 years. If you take what, and God has certainly given a lot of the sun and the beauty and reflected outward, it really works well. Yeah, the reward is there to be sure. And I'm hopeful that there'll be more awards, always eager to be helpful and always eager to learn what the new idea about building affordable housing. So, on that note, I'm finished. Do you have any less words of wisdom? No, thanks again for the opportunity to be here. Love talking about affordable housing. Huge need in our community and look forward to continuing that conversation and participating at whatever level that we need to, to make that happen. On that note, I'm about to say goodbye. But again, I'm going to harken back to Dennis Isaki. We had this celebration of life on Saturday. There was a huge tent put up by Isaki surveying and engineering. Sons of Hawaii came out with his motorcycle covered with flowers and and then in the midst of it, a helicopter flew by and dumped a bunch of flowers. Everybody jumped on their motorcycles. So you were drowned out by huge noise. And they came to honor somebody that gave and not just gave, generally, he gave individually. He would be somebody who would help you with a driveway, run a line between here and there, talk about where the sewer was, the water capacity, what would make Hawaii a better place. He was always getting me in trouble to say, why don't you just go testify, Ricky? And sometimes I'd have to check who was on what side to the other before I stuck my foot in their mouth. But again, Dennis, we said goodbye to you on Saturday, but we'll never forget you. So thank you very much and all my aloha.