Hawaiʻi County purchases Dolphin Bay Hotel for affordable rental housing

The County of Hawaiʻi’s Office of Housing and Community Development has purchased the Dolphin Bay Hotel in Hilo on Hawaiʻi Island, with plans to convert guest rooms into 18 affordable rentals.

Studio, one-bedroom, and two-bedroom apartments will be available for residents earning up to 50% of the area median income. The first units are anticipated to be ready in early 2026, pending renovation schedules and permitting timelines.

Located in the Puʻuʻeo area of Hilo, the hotel was established by the Alexander family in 1968.

“Through this sale, the Dolphin Bay Hotel will continue its legacy of serving the Hilo community,” said Mayor Kimo Alameda. “I want to thank the Alexander ʻohana for partnering with the County to ensure these units stay affordable in perpetuity.”

The $1.28 million acquisition was made possible by utilizing federal funding from the Emergency Rental Assistance 2 Program.

“For decades, Dolphin Bay has been a gathering place and a home for many. I’m happy it will continue that role as affordable housing for local families,” said John Alexander, the hotel’s former owner. 

County Housing Administrator Kehaulani Costa noted the purchase is part of the office’s strategy to expedite the expansion of affordable housing opportunities.

“Building new housing takes time, but families need help now,” Costa said. “By purchasing existing housing, we can deliver affordable units faster and provide immediate relief for residents struggling with high housing costs.”

Kona Moran of Hilo Brokers Ltd., which facilitated the sale, commented: “Helping with this sale was about more than a transaction — it was about preserving a sense of community. Thanks to John Alexander’s commitment, Dolphin Bay will continue to be a place local families can call home.” 

Mark Development Inc. has been selected to manage the property and will provide updates on applying for units in the coming weeks.