The city’s final draft plan for transit-oriented development in the bustling Ala Moana area notes a clear community desire for TOD to provide a “balance of housing types, including more affordable housing.” The reasoning, according to the draft, is that “affordable housing can help preserve the diversity of the people within the neighborhood central to the district’s overall vision.”
Eclipsing any vision of this diversity ideal in housing, though, is our harsh reality: Honolulu is in dire need of more affordable housing; the inventory shortage is at the root of the city’s high cost-of-living woes.
Mayor Kirk Caldwell, the City Council and others have long touted TOD as a sort of golden ticket to reducing Oahu’s affordable housing backlog. However, as currently executed, the city’s approach to transit-oriented development in the Ala Moana corridor is flatly failing to seize opportunity to significantly ramp up inventory of units for moderate- and low-income households.
The latest case involves a proposal for two more high-rise towers near the proposed rail terminus at Ala Moana Center, called Sky Ala Moana. Local developer Avalon Group wants to build 300 condominium-hotel units and 474 condo units, of which 84 — slightly less than 11 percent of the total unit count — would fall into the so-called “affordable” bracket.
One Council member lauded the number of proposed affordable housing units at 20 percent — but that’s a misguided tally that excludes the 300 condo-hotel units from the base count, which they shouldn’t be, particularly given the extra height, density and setback exemptions being sought. The City Council must correct this glaring error.
According to state projections, Hawaii needs 65,000 more housing units by 2025; nearly three-quarters of the demand is from households making $75,000 or less a year. The affordable units envisioned for Sky Ala Moana would target buyers earning 100 to 120 percent of Honolulu’s area median income, currently ranging from $116,600 to $139,920 for a family of four.
Avalon has sweetened its proposal by dangling an offer to keep its affordable units in the mixed-use residential and commercial project in the affordable bracket for 30 years. Such price-control would indeed help maintain an inventory that might otherwise be quickly flipped to fetch higher resale prices.
The developer has pitched the 30-year affordability offer — the first of its kind tagged for TOD in this corridor — as an acceptable risk in exchange for various variances, such as the towers climbing to 400 feet. The City Council should not sign off before further assessing its own risk-taking.
At the Council’s Committee on Zoning and Housing meeting last week, Avalon Group CEO Christine Camp said from the get-go the affordable units “could be very difficult to sell” because of the set ceiling on resale. It’s true that investors might pass — but it’s a safe bet that local residents would line up for blocks just for the chance to snap up such a unit in the Ala Moana neighborhood.
Also among its requests for concessions from the city, Avalon wants a city permit to build the condo-hotel in an area that’s not zoned for that land use. It maintains the hybrid operation would help offset risk tied to the 30-year ceiling on affordable units. Maybe, but such TOD development does little to put a dent in Oahu’s affordable housing problem, and the Council must be mindful of setting precedent for condo-hotels in this corridor — as well as taxation implications between a project’s vacation-rental rate rather than a residential rate.
The city’s TOD plans envision the Ala Moana neighborhood — with the largest rail station on the 21-mile transit route — as becoming “Honolulu’s most livable urban community.”
If it’s to become “most-livable” for workforce residents, the inventory of designated affordable housing must be larger. And that needed inventory, overall, will materialize at a faster pace only if it’s clear that undue concessions don’t come at the expense of truly affordable housing.
