Duplex homes line a street in Earhart Village, one of five neighborhoods at Joint Base Pearl Harbor-Hickam, Hawaii, that make up Hickam Communities, which is operated by the Australia-based firm Lendlease. (Wyatt Olson/Stars and Stripes)
JOINT BASE PEARL HARBOR-HICKAM, Hawaii — Some residents of a housing community on this joint base are facing rent hikes of hundreds of dollars per month, with a few households looking at monthly increases of more than $1,000.
Australia-based Lendlease, which manages the roughly 2,500 homes that make up Hickam Communities, began notifying some civilian tenants that their rents will go up starting in the new year.
News of the sharp increases did not sit well with Hawaii state Rep. Sonny Ganaden, who in past weeks has fielded complaints from tenants of Hickam Communities, which lies in his district. Some told him they had the choice of paying $1,250 more in rent each month or moving out.
“Hawaii is facing a significant housing crisis,” Ganaden said in a phone interview Friday.
“A family of four having to pay an extra $1,250 a month — that’s going to push them into the local market, and then further exacerbate issues with local housing.”
Ganaden put forth a more stinging appraisal of the increases in a letter sent Nov. 14 from his House office to Hawaii’s governor and the state’s congressional delegation.
“Numerous constituents have contacted our office to see if there is anything the state government can do,” the letter states.
“Our office has had several meetings with constituents and members of the Department of Defense. From those meetings, it is clear that Lendlease is engaged in the arbitrary practices of a predatory corporate landlord and is exacerbating a housing crisis in Hawaii.”
Rising cost of utilities
Lendlease blames the increases primarily on the rising cost of utilities.
“Since 2020, 100% of utility costs for all residents are paid by Hickam Communities, thus sheltering families from the rapidly rising cost of utilities in Hawaii,” Justin Kern, executive general manager of Lendlease Communities, said in a statement emailed to Stars and Stripes on Nov. 21.
Utility costs at Hickam Communities increased by 52% from 2020 to 2023, with electricity expenses rising by 73% during that period, Kern said.
“These energy and utility increases equate to an average of $750 per home per month, which is not passed on to our residents,” he said. “Additionally, Hickam Communities covers its residents’ property insurance expenses, which have also risen tremendously in past years.”
Rent out of pocket
The increases do not touch the 1,970 active-duty service members who live in Hickam Communities and whose rent is covered by the basic housing allowance provided by the Defense Department. Lendlease receives the full amount of that housing allowance.
That’s not the case for the civilian households there, a subset that includes Department of Defense employees, civil service employees, military retirees and employees working for the housing community. They pay rent out of pocket, and most will see rent increases for 2024.
Kern said there are 437 such tenants living in Hickam Communities.
Lendlease has issued 479 renewal notices for 2023 for those civilian households; the number of renewal notices is higher than the number of current residents due to turnover, Kern said.
Of that number, 82% of the notices reflected increases of $301 to $500 per month, he said.
Just over 30 of those households are looking at increases of more than $500 per month, with five civilian households receiving increases of more than $1,000, Kern said.
Ganaden expressed skepticism that higher utility costs would equate to such increases.
“I rent, and our energy demand didn’t go up,” he said.
The basic housing allowance in Hawaii increased by 14% this year, and Ganaden asserts that Lendlease is using that to “maximize profit” by levying that increase on households not getting the allowance.
‘Basic supply and demand’
In an emailed statement Wednesday, Joint Base Pearl Harbor-Hickam said Hickam Communities is governed by legal agreements approved by the Air Force that set out rental priorities for airmen.
The agreements, however, allow other eligible categories of tenants to rent homes if the occupancy rate of airmen falls below certain thresholds.
That was the case in 2016, and Hickam Communities opened rentals for certain civilians and military retirees.
“As current occupancy rates exceed the set thresholds, Hickam Communities raised rents toward the current market in 2023, which is aligned with rates military families are paying,” the statement said.
Lendlease did not raise rents for civilian tenants during the COVID-19 pandemic, which has led to their rents standing at below-market rates, the statement said.
“Several Hickam Communities tenants have experienced rental rates well below market levels over the last 3-5 years,” Col. Monica Gramling, deputy joint base commander, said in the statement. “Those rates are now being adjusted to match market rates due to basic supply and demand principles.”
From Ganaden’s point of view, that misses the big picture.
“My big concern here is that this is government property,” he said. “We have outsourced the leasing of housing at Hickam, which I represent, to this multinational corporation with some of the biggest contracts with the Department of Defense for housing and land development.
“And they are going to the maximum community rate. They’re really trying to push it to the edge.”
