Waiahole Valley residents held a roadside demonstration Wednesday calling on Gov. Josh Green to intervene in a state agency’s effort to dramatically raise tenant land lease rents after 25 years of little or no increases.

About 50 valley residents and their supporters along Kamehameha Highway near Waiahole Poi Factory and the intersection of Waiahole Valley Road urged passersby in the morning to call the governor’s office to ask that Green have a mediator recommend fair rents for residential lot lessees who regard the state’s offer as too high.

“Call Gov. Green — we like mediation,” Lucy Salas, president of the Waiahole-Waikane Community Association, representing roughly half of all lessees in lease negotiations, bellowed into a megaphone repeatedly. “Listen to the people of Waiahole.”

Signs pointed at passing motorists featured messages including “Priced out of Waiahole” and “Gov. Green order mediation!!!” A couple of them included the phone number for Green’s office.

Around 40 Waiahole Valley lessees with residential lots face a Friday deadline to accept the state’s offer or abide by an arbitrator’s decision that could result in higher rent than what is being sought by the Hawaii Housing Finance and Development Corp., a state agency that owns 91 lots in the valley and leases them to residential, farm and commercial tenants.

Leases for 36 agricultural lots, where tenants also have homes, include a mediation provision before possible arbitration if no agreement is reached by July 31, and Salas said that’s not fair for residential lot lessees whose leases specify only arbitration.

“We don’t have a fair shot at our negotiation,” Salas said.

Some lessees claim they will lose their homes if they accept HHFDC’s offer, and would likely fare worse under arbitration because lease rent is to be based on land value. Lessees also have to pay half the cost of arbitration.

“We’re screwed,” said Kathy Oshiro, a 74-year-old retired preschool teacher with a residential lot lease in the valley.

HHFDC began assessing and trying to resolve issues with the subdivision in 2017, including expenses exceeding lease revenue. After work that included surveys and community meetings, the agency in July 2022 proposed a rent increase of 560%, or nearly sevenfold, for a 15-year term set to begin Saturday.

The agency said the new rent would be about half the market rate, follows little to no increase in rents over the past 25 years and would only cut in half its $1.1 million annual deficit maintaining the subdivision.

HHFDC’s original proposal equated to monthly ground rent of $745, up from $119, for the subdivision’s median-­size residential lot of a half-acre through July 2038.

For a median-size 8-acre farm lot with a house, monthly rent would rise to $713 from $108 under the initial offer.

In April, HHFDC dialed down rent increases to around 230% for residential lots and 100% for farm lots instead of 560%, though some of the smallest residential lots would not see much change.

The agency also said it would offer lower rents for low-income lessees.

At a June 8 HHFDC board meeting, agency staff presented a conceptual low­-income rent program for households earning no more than 60% of the annual median income on Oahu.

This qualifying limit equates to $55,020 for a single person, $62,880 for a couple and $78,600 for a family of four.

The program’s aim is for qualifying households to pay no more than 30% of gross income on housing costs, including ground rent, utility bills, property taxes, home maintenance and mortgages in line with a federal low-income housing guideline.

About a third of this housing expense, or 10.5% of gross income, would be for ground rent.

HHFDC estimated that a family earning $50,000 annually would pay monthly ground rent of $437.50, leaving $812.50 for other housing expenses. Ground rent for a lessee earning $15,000 a year would be $131.25.

“We’re of the understanding that a number of lessees in Waiahole Valley are of limited financial means, and may or will be unable to pay rents at the levels that were established through the yearlong rent renegotiation process,” Chris Woodard, HHFDC chief planner, told the board. “Staff believes that Waiahole Valley residential lot lessees should not be cost burdened.”

Woodard also said more program details need to be developed and adopted through an administrative rule change that requires a public hearing and could take until the end of the year to complete.

In the meantime, Waiahole Valley lessees who want to apply for the low-­income rent program can indicate so by Friday and not trigger arbitration.

So far, six lessees have informed HHFDC they intend to participate.

Separately, 12 of 53 residential lot lessees have agreed to new rent. An additional 21 of 36 farm lot lessees have also done so, as has one of two commercial property lessees.

For residential lot lessees who reached agreements with HHFDC, new monthly land rents range from $330 to $769 depending on lot size, the agency said. The deals also include increases of $100 a month that take effect in the sixth and 11th year of the 15-year term.

Paul Zweng, Waiahole-­Waikane Community Association vice president, applauds HHFDC for devising the low-income rent program but said it’s not sufficient for lessees with extreme low incomes or relatively low mortgage payments for the homes they own on the leased land.

Pat Pilanca, a Waiahole Valley resident for more than 50 years, said HHFDC’s regular rent offer would eat up most of her Social Security income while she isn’t sure what her rent would be under the low-income rent program.

“I need more information about that,” she said at Wednesday’s demonstration. “My husband passed away (in December), so it’s only my Social Security.”

Oshiro, the retired preschool teacher, told HHFDC’s board at its June 8 meeting that her housing expenses not including ground rent already costs her at least 30% of her income.

Nellie Dano, a fourth-­generation Waiahole Valley resident and retired Hawaiian Electric electrician, wouldn’t qualify for the low-income rent program. But she said at the demonstration that all lessees deserve a more equitable deal that a mediator could hopefully provide.

Under HHFDC’s offer, Dano said her monthly ground rent would rise to $600 from $450. “It sounds greedy, but the cost of living in Hawaii is expensive,” she said. “We want fair rent hikes.”

Dano is hopeful that the governor will intervene, which is something a past governor did to save her family and others from being evicted by a private landlord almost 50 years ago.

A predecessor to HHFDC became the landlord to much of the rural subdivision in 1977 when then-Gov. George Ariyoshi had the state buy the property under threat of condemnation to preserve the community and defuse tenant protests against the prior landowner who had raised rents and attempted evictions as part of an effort to build a “new city” in Waiahole and Waikane valleys.

The public protests before Ariyoshi’s intervention included more than 200 residents and supporters blocking Waiahole Valley Road to prevent a state sheriff from delivering eviction orders. Eviction notices were ultimately accepted, and then burned in the street by many lessees.

It took two decades for the state to create leasehold contracts, which took effect in 1998 and run 55 years.

Rent was fixed for an initial 10-year term and a subsequent 15-year term, but is subject to renegotiation for two additional 15-year terms through 2053. The lease also can be extended another 20 years if most tenants agree.

Tenants in the valley today include some original lessees and their descendants. Some longtime lessees also have sold their homes and assigned ground leases to others.

Some residents have vowed that if new lease rents produce evictions then protests reminiscent of nearly 50 years ago will occur.

Nani Medeiros, chief housing officer in Green’s administration and an HHFDC board member, has previously proclaimed that no evictions will result from reset rents in Waiahole Valley.

Green was unavailable for comment Wednesday, as he was traveling home from a Western Governors Association meeting in Colorado.