Fueled at least in part by the chronic shortage of available housing inventory, the median sale price for a single-family home on Oahu jumped to $760,000, according to a report issued last week by the Honolulu Board of Realtors.
In the face of that sobering statistic, the leaders of the state agency directing the redevelopment of Kakaako demonstrated that they grasped the challenge at hand. The Hawaii Community Development Authority (HCDA) last week began discussing new rules aimed at expanding offerings of affordable units in the remaining buildout of Honolulu’s newest urban community.
Affordable housing was always among the aims of the HCDA, but the members of its board now have done a needed reality check. The four-member committee proposing the rules rightly concluded that the price point of even those units deemed “affordable” was simply too high for too many.
What’s distressing is that this realization did not come much earlier in
HCDA’s four decades of existence. Many projects already are built or planned and will not be subject to these more stringent requirements.
Still, it’s encouraging to see some signs of a shift in housing policy, at HCDA and elsewhere in state and city government, that should yield better results for middle- and working-class residents.
The essence of HCDA’s proposals is to house more residents at lower income levels, in both for-purchase and rental projects.
Under current rules, developers exceeding standard height limits on larger parcels must produce 20 percent of the units as “reserved.”
Density is allowed to double if the developer prices 75 percent of its homes at “workforce” levels.
These percentages wouldn’t change under the new rules, but the target income requirements would. Instead of ranging from
100 to 140 percent of Honolulu median income, they must be affordable to those with household incomes from 80 and 120 percent of median.
This means a single person earning $56,350 to $73,850 would be accommodated, as would families of four in the $80,450-$105,500 range.
The target incomes now are several thousands higher — up to $18,000 higher for the larger family units priced at the top of the “affordable” scale.
In an economy in which wages have not kept pace with the surging price of housing, this differential matters.
Other proposals demand careful review. HCDA wants to keep units affordable as long as possible, and is considering extending from 15 to 30 years the length of time rents should be maintained at affordable levels.
That is a worthwhile idea.
The agency also is concerned about the number of affordable units being “flipped” for resale at higher prices, a valid worry. Board members, thus, are eyeing a proposal to give HCDA an unending right to repurchase units and keep them at below-market prices.
But it seems unreasonable that the buyers of the homes should permanently sacrifice their right to build their own wealth by selling the unit at market value.
Some kind of compromise is needed here.
On the whole, though, the proposals seem headed in the right direction, and not only on the question of affordability.
The board should reconsider, as is suggested, the exemptions it allows to developers. Too many requirements have been waived for setback, open space and other desirable characteristics of any urban landscape.
There was laudable action at Honolulu Hale as well. The City Council last week passed Bill 27, a measure that waived some of the fees currently assessed to homeowners planning to build an accessory dwelling unit (ADU) on their properties.
These ADUs are seen as a means to add to Honolulu’s paltry stock of affordable rentals without excessively tapping tax resources, relying instead on the private sector.
This easing of fees could help jumpstart the ADU program, which has generated a disappointingly low level of interest so far. It’s plain to see why: Sewer hookup fees alone cost over $6,000, and other fees can add a few thousand more.
Mayor Kirk Caldwell supports this idea and is expected to sign the bill, as he should.
And the city should continue to monitor the ADU application and review process to ensure it is not a barrier in itself.
More incremental progress was made with Gov. David Ige enacting two other measures:
>> House Bill 2293 enables the state agency that furthers construction of affordable housing, the Hawaii Housing Finance and Development Corp. (HHFDC), to pursue mixed-use projects and to partner with more state and county agencies.
>> HB 2305 allows HHFDC to assist state agencies, counties and private developers with infrastructure costs.
All of this is to be applauded, but only briefly. Attention must turn to the next step, and the one after that. Hawaii has a long way to go before relaxing on its mission to erase its affordable-housing deficit.
