To optimize the area around rail transit stations, it’s critical that affordable housing become a “must have” component of new projects — not something that developers are able to buy their way out of.

It’s why the City Council must proceed cautiously on the proposed Mana‘olana Place luxury condominium-hotel tower, in which the developer would pay $2.4 million in fees to forego its affordable housing requirement. This decision will no doubt set the tone for future development in transit-oriented development (TOD) zones — and selling out from the get-go is ill-advised.

One option on the table is for the developer, California-based Mana‘olana Partners, to buy or develop 16 affordable rental units within a half mile of a Honolulu rail station. While better than none, the 16 units are just a starting point and nowhere near enough.

A final Council vote on the proposal last week was rightly deferred and the measure was sent back to the Zoning Committee, which is expected to take up the 36-story project at its Thursday meeting. Council Zoning Committee Chairman Trevor Ozawa was correct in noting that what happens with Mana‘olana will affect future comers along the rail line.

“I don’t want to get it wrong. I don’t think any of my colleagues want to get it wrong,” Ozawa said.

Getting it right means taking a strong stand with developers within TOD zones: Producing affordable housing is not an option, it’s a mandate.

Mana‘olana Partners is seeking Council approval on the first-ever Interim Planned Development-Transit Permit, establishing precedent for future TOD. Under TOD guidelines, developers can enjoy relaxed height, density and parking restrictions if they incorporate affordable units in their projects.

The current proposal would allow Mana‘olana’s 109-residential-unit, 125-hotel-room tower to exceed the current 350-foot height limit, to go up to 400 feet. Other variances sought include relaxation of setback requirements and half the required parking.

If the city allows these variances — plus allows the developer to buy its way out of providing direly needed affordable housing — there simply is not enough community benefit.

While dropping in-lieu money into the Housing Development Special Fund would seem like a reasonable alternative, that fund, unfortunately, has not produced any affordable housing units in years. The dismal track record does not instill confidence that livable units will emerge any time soon.

City officials might think they’ve driven a hard bargain by securing $2.4 million for the trust fund when the developer originally proposed $1.1 million. But with so little housing stock that is affordable on Oahu, it’s time that elected leaders, city administrators and the community press the point to developers that affordable housing is a needed and crucial commitment.

Harrison Rue, the city’s community building and TOD administrator, said Mayor Kirk Caldwell’s draft affordable housing strategy calls for requiring most developers to either provide affordable housing onsite, offsite or contribute an in-lieu fee based on $45 per square foot of residential space.

“The (Mana‘olana) project includes 53,390 square feet of residential floor area over 350 feet,” Rue said in a recent statement. “At $45/square feet, that is $2,402,550.”

Caldwell will need to rework his affordable-housing strategy. The city cannot move the needle on affordable housing if it continues to let projects off the hook. That’s unacceptable in a state with the highest per-capita rate of homelessness and in need of 20,000 new affordable rentals now.

Further, the promise of affordable housing in TOD zones was a key selling point for community buy-in on both rail transit and TOD; it must be delivered.

Community activists were not impressed with the housing escape clause — and with good reason.

“We have supported rail and TOD very strongly … because we felt this was a way to get affordable housing,” said Bob Nakata, a representative for Faith Action for Community Equality and the Housing Now Coalition.

The latest draft of the Ala Moana Neighborhood Transit-Oriented Development Plan touts “new affordable housing designed around walkable streets, mauka-makai views, prevailing breezes, and rooftop amenities.”

The Ala Moana TOD, it states, would include “a mix of for-sale and rental housing within a range of prices (that) would help attract a wider demographic.”

The city must stick with the plan and commit to increasing affordable housing stock as part of TOD. That means driving harder bargains with developers and setting smart precedents within TOD zones — in a range of housing prices, for a range of Hawaii’s people.