Having decided that building affordable rental apartments makes more sense than trying to sell condominiums to people with limited incomes, the developer of the Ward Village master-planned community wants to alter construction plans at one of its sites in Kakaako.
Despite the obvious need for moderately priced rental housing in this urban Oahu district, the Hawaii Community Development Authority must cast a wary eye on the request by developer Howard Hughes Corp. The outcome of this decision could apply to other projects in the area and dramatically affect the diversity of housing in an area that has become a locus of luxury condominium development.
Hughes Corp. wants to change its planned affordable tower at 988 Halekauwila St. from condominium sales to apartment rentals. The petition it submitted to HCDA on the matter raises important questions about the future of that project specifically and development in Kakaako generally.
Among them: how much flexibility developers hold in changing the focus of a project well along in the planning process, and whether developers can build fewer affordable units, but still satisfy requirements related to the construction of affordable housing, by making rental units available for longer than the currently required 15 years.
HCDA will take up the petition at a meeting on Wednesday.
Hughes Corp. justifies the change by saying that market research shows there are five times as many potential renters for the project than there are buyers meeting HCDA’s income requirements. It’s willing to keep the rentals affordable for 30 years, rather than the 15 years now required.
However, if HCDA is to reconsider the terms of this project, it should insist that the rentals remain affordable for longer than 30 years — preferably in perpetuity. Moreover, regardless of its decision in this case, the agency should revisit the minimum timeline for all future affordable-rental projects.
In practical terms, 15 years is not long enough to derive even one generation’s worth of the public benefit developers are supposed to provide in Kakaako, in exchange for density and height bonuses over basic zoning rules. Say a young couple moves into an affordable rental in Kakaako with the intent of raising a family; the current affordability requirement would expire before their first child even graduates from high school.
Hughes Corp. says it is responding to local needs in wanting to rent rather than sell at this location, and that the revised project is good for Honolulu residents. The new plan surely makes economic sense as well for the developer, which would hold title to the units and could rent them at market price or sell them outright once the affordability requirements lapse.
That’s not to begrudge Hughes Corp. its profit, but simply to exhort the HCDA to do its full due diligence on whether this revised proposal represents the best deal for the Oahu residents that the affordable-housing rules are meant to serve.
If Howard Hughes prevails in its request, condominiums that could have been purchased by local families with moderate incomes won’t come on the market, meaning that the financial stability and equity that homeownership offers also remains elusive for those potential buyers.
High-quality rental apartments that remain affordable in perpetuity might be a fair tradeoff, but 30 years does not seem near enough.
