“Moderate income: tending toward the mean or average … a family of moderate income”
— Merriam-Webster
Kakaako’s 600 acres are supposed to serve the “highest needs and aspirations of Hawaii’s people.” In 1976 the Legislature passed a law creating Kakaako as a community development district under the Hawaii Community Development Authority (HCDA). Kakaako’s “highest needs” included affordable housing, reserving a share of Kakaako’s housing for “low- or moderate-income households.” Instead, Kakaako has become a playground for the world’s wealthy.
Following a loud community outcry, the Legislature and Gov. David Ige in 2014-15 replaced the previous HCDA’s developer-friendly board with members who try to work within the law but face pressure to circumvent the vision of Kakaako as a place where residents can live near work.
Regrettably, HCDA’s newest draft rules do not adequately provide Kakaako housing for “moderate income” households. Instead, the rules let developers sell units to four-person households making $140,000 — 40 percent higher than Honolulu’s $100,000 median household income. Families making $140,000 can buy homes costing $722,000.
Kakaako developers are delighted when HCDA says $722,000-priced units are for “moderate-income” families. When HCDA’s rules for “reserved housing” allows developers to sell for $722,000, the big losers are “moderate income” families who cannot afford such prices.
HCDA’s inaccurate definition of “moderate,” unfortunately, carries over to “workforce” housing, defined by Wikipedia as homes for “essential workers” in a community, e.g., police officers, firemen, teachers, nurses and medical personnel. Some communities include service workers, as in the case of resort communities where one finds high real estate costs and a high number of low-paying service jobs essential to the local economy. Workforce housing may be targeted more generally at certain income levels, regardless of type of employment, ranging from 50 percent to 120 percent of the area median income.
Other states set “moderate income” caps at no higher than 120 percent of median income. How many Honolulu service workers, even teachers and firefighters, live in households earning $140,000 a year? In 2013, 86 percent of Honolulu income tax filers earned less than $100,000.
The city’s proposed housing policy correctly defines “moderate” as households earning up to 120 percent of Honolulu’s median income. The city assumes that residents earning above that level can buy market-priced homes costing $620,000. They don’t need government housing assistance. Help should go to those with incomes below that level.
Before the city proposed its 120 percent ceiling, it commissioned a study by Keyser Marston Associates, Inc. That study defined “moderate” income housing as between 80 percent and 120 percent of area median income. According to Keyser Marston, a 140 percent cap represents “household incomes from 120 percent to 140 percent of area median income” — a level above the study’s definition of “moderate-income” housing. Driving home the point, Keyser Marston stated that households making over 120 percent of area median income don’t need government support.
A University of Hawaii Economic Research Organization’s 2010 housing study of affordable housing policies in 29 mainland jurisdictions, including high-cost San Francisco, New York and Virginia’s Fairfax County, found none supported households making above 120 percent of area median income, with only eight even reaching 120 percent.
Developers already sell 80 percent of their project units at whatever the market will bear. Setting HCDA’s “moderate income” ceiling at 140 percent instead of 120 percent enables developers to sell not just 80 percent, but all of their units at market rates, leaving 0 percent for “low- or moderate-income households.”
The community should speak out against HCDA’s proposed housing rules and urge HCDA to make pono its rules for housing affordable for “moderate-income” households.
Sharon Moriwaki is president and Bernard Nunies is vice president of Kakaako United, a citizens organization committed to ensuring the quality of life for an integrated Kakaako community.
