Seven years after much-anticipated renovations at Kalihi Valley Homes started, the project at one of the largest public housing complexes in the Islands is years behind schedule and its price tag has ballooned by nearly 60 percent, to $75 million.

Seeking to skirt more major problems, state housing officials are moving forward with a new, scaled-back plan for the work, which includes fewer renovations to the exterior of units and abandoning plans to tear down 72 apartments and replace them with a park, playgrounds and a community center.

Though the new plan is expected to mean work will start up again at the project this fall after a yearlong lapse, the renovations could hit another barrier as early as 2011, when the project will probably top its original ceiling cost of $60 million. At that point, the federal government will stop paying for the work and the state housing authority will have to look elsewhere for money.

Getting that money — as much as $15 million — from the Legislature will be difficult. The project was originally billed as being entirely federally funded, but the state pitched in $300,000 last year to move work along.

Renovations at the complex, originally expected to cost about $47 million and be completed as early as 2008 — or by 2010 at the latest — are now forecast to finish up in February 2016.

The changes to the project plan frustrate some residents at Kalihi Valley Homes and in the neighboring community, who blame the problems and cost overruns on mismanagement at the Hawai'i Public Housing Authority.

"They didn't do their job," said Maria Pato, a community leader at Kalihi Valley Homes, who lives in one of the renovated units. "I'm here in the new place, but what about those others in their broken houses?"

For their part, state housing office officials say cost overruns for the Kalihi project — and other similar renovation jobs at other complexes — couldn't be avoided.

Officials said the costs of construction and labor have risen dramatically over the past few years and said they could not have anticipated those increases. To meet the increasing costs, the housing office had to wait for more money to come in, which usually meant waiting for a new fiscal year and delaying the projects even more.

"Everything is increasing," said Pam Dodson, executive assistant to the director of the public housing authority.

The setbacks at Kalihi Valley Homes come as the housing authority is trying to revamp its aging public housing projects, while also grappling with an affordable housing crisis.

Though the Kalihi work is by far the largest renovation project at a public housing complex in the state, the housing authority is also shelling out capital improvement funds for a $21 million project to renovate Lanakila Homes in Hilo and $10.5 million to modernize 50 apartments at Kahale Kahaluu in Kona.

The Lanakila project started in 1997, and is now in its third phase. The project's costs have risen so much, the authority said, that the average cost per apartment is now $395,000. So far, 136 units at Lanakila have been torn down and rebuilt, while 94 others are on the demolition list.

Housing advocates say the problems at Kalihi Valley Homes and Lanakila could make it harder to get legislative support, or even federal funding, to renovate other housing projects.

But, they add, the issue is not likely to go away anytime soon: Many of the state's 81 state and federally funded public housing projects are long past their prime, even as more and more people are trying to get into the affordable units.

SEEKING FEDERAL OK

The decision to drastically change the Kalihi Valley Homes renovation plan was made in late March, when the Hawai'i Public Housing Authority asked the federal government to take the apartments set to be torn down off its demolition list.

Demolition of federally funded projects must be approved by the U.S. Department of Housing and Urban Development. Taking apartments off the demolition list also requires federal approval.

Federal officials have not yet responded to the authority's March letter, though local HUD officials say the change in plans will probably be approved. The Legislature and the authority's board support taking the units off the demolition list, and both have passed resolutions urging HUD to expedite the process.

Lawmakers and board members who passed the measures say the affordable housing crisis is too acute for the state to be tearing down perfectly good apartments.

"These weren't buildings that needed to be condemned," said state Sen. Donna Mercado Kim, who represents Kalihi Valley and has been critical of the project's progress. She added that no public housing units should be demolished if they can be renovated.

Kim also said more state money for the project won't come until lawmakers get answers on how problems will be avoided in the future.

The Hawai'i Public Housing Authority originally supported the demolition of units at Kalihi Valley Homes based on recommendations from residents and housing experts, who said the density of the housing project was contributing to social tensions.

The authority manages more than 6,200 state and federally funded public housing projects in the Islands. It has more than 12,000 low-income tenants, and nearly 21,000 people are on the waiting list to get into public housing. Most applicants are below the poverty level.

"It is a lot of commitment to keep these places going," said Doran Porter, executive director of the Affordable Housing and Homeless Alliance, which manages the Next Step Shelter in Kaka'ako. He added that a big part of that commitment is coming up with money for everything from small day-to-day repairs to large-scale renovations.

"I don't think those funds have come through in the past," he said, which means the authority is now trying to catch up.

Porter also said state housing officials made the right choice when they decided to scrap the demolition of units at Kalihi Valley Homes.

"Any house is better than the streets," he said.

DASHED HOPES

When it began in September 2000, the renovation of Kalihi Valley Homes was heralded as a victory for tenants, who fought for four years to better their living conditions, once even taking reporters on a tour to show leaky roofs and sewer pipes, potholes and rats.

Pato was one of those who fought for the renovations.

Sitting on her porch on a recent weekday, she fiddles with the corners of papers in a thick folder — her repository for everything related to the renovation. She takes a drag from a cigarette as she talks about why the project was so important to her, and to her neighbors.

"It was all for the kids," she said. "We have to get a better life for the kids."

Pato said she is upset about the state housing authority's new plan — not so much because the project lost its planned playgrounds and open space, but because of the revised timelines and scaled-back renovations. She said all of the renovated units, which range from one to five bedrooms, were supposed to look the same. Now, some will have high roofs, others will have flat roofs. The units renovated in the first phases will have more complicated facades, and possibly even different paint schemes, than those scheduled for renovations in coming years.

Most upsetting, she said, is that the units that were to be torn down will instead get little more than bare-bones repairs. Those apartments, with their faded paint and crumbling gutters and overhangs, will serve as a reminder of everything residents had fought so hard to get rid of.

Norman Ho, property management and maintenance services branch chief for the housing authority, said the units that were to be demolished appear to be in satisfactory shape despite their dilapidated exteriors and peeling paint.

"The problem is, I don't have the money to make these buildings look good," he said.

Still, he pointed out, work will start again soon on the larger renovation project, which has been broken up into eight phases.

Chester Koga, vice chairman of the Kalihi Valley Neighborhood Board, said he was concerned with how the project was progressing, but is now encouraged by the recent movement. He said the most important thing is to make sure the renovations are completed.

"Our objective," he said, "was to make sure the vacant units are brought back on-line as quickly as possible, considering the need for housing."

Reach Mary Vorsino at mvorsino@honoluluadvertiser.com.