Untangle rules blocking housing
Hawaii is a pricey place to live, and most daunting for many of us are costs tied to housing.
Last month, single-family homes on Oahu sold for a median $750,000 and condos, $395,000 — nearly 5 percent and 14 percent higher, respectively, than figures from a year ago. That’s the sort of sticker-shock that prompts residents to consider moving to the mainland. According to the U.S. Census Bureau’s latest population estimates, 10,000 more people left Hawaii than moved in from the mainland over the last year.
Gov. David Ige is right to ask state lawmakers to step up spending to tackle the state’s housing challenges, especially those confronting residents seeking affordable housing. In his proposed two-year state budget, which will go before legislators next month, Ige is asking for $123.4 million to promote new housing starts.
In May, when the Legislature passed a state budget for 2017 it earmarked nearly $100 million to make a dent in our severe shortage of affordable housing.
This time around, Ige is proposing that $50 million go into the Dwelling Unit Revolving Fund, which is for developers of for-purchase affordable housing, and $50 million for the Rental Housing Revolving Fund, which is for developers of affordable housing for rent. The 2017 budget tagged $25 million and $36.6 million, respectively, for those funds.
A state study released two years ago estimated that more than 11,000 rental units are needed on Oahu by low- and moderate-income households by 2020. It’s unclear how close we are to meeting that demand, but it’s a safe bet that city, state and federal regulatory tangles have bogged down the pace of construction. Developers and government should be working better in tandem to align processes so that affordable housing is easier to produce.
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Developer Stanford Carr, for example, says he can build low-income rental projects such as Kakaako’s Halekauwila Place by pairing them with more market-priced structures, such as the neighboring Keauhou Place tower, which is now under construction. While asset checks, credit checks and other demands tied to a builder’s application to secure federal and state financing are rigorous, Carr said: “What we’re trying to do is come up with different tools … to incentivize and make it easier for developers like myself to build more” affordable housing.
He added, in the long-run, “It’s going to take public-private partnerships. … It’s going to take long-term ground leases with state lands or city lands to enable us to build in the urban core. And it’s still not easy.”
Honolulu voters unraveled one tangle last month by approving changes to the city’s Affordable Housing Fund, allowing it to be used to develop rental housing for those earning 60 percent or less of the median household income. Previously, income limits for residents of Affordable Housing Fund-assisted dwellings were less than 50 percent of the median.
Passage of City Charter amendment No. 5 also changed the length of time that rental housing must remain affordable from “in perpetuity” to “60 years.” The perpetuity clause had blocked developers from leveraging their financing with federal and state tax credits and funds from the state’s Rental Housing Revolving Fund, which ask for the affordability to be up to 60 years only.
As home prices climb higher in the islands, more people are being priced out of the housing market. The need for a much larger inventory of reasonably priced residences is becoming increasingly urgent, reflected, in part, by the state’s ongoing problems related to homelessness.
Now is the time for the governor, lawmakers and others to work together to snip bureaucratic red-tape impeding the progress of viable affordable housing projects. Enact a blueprint for the future in which housing costs remain within reach for Hawaii’s low-income and moderate-income residents.
16 responses to “Untangle rules blocking housing”
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Some one really mucked up things, correct it.
Average locals should never sell their home on Oahu even for a windfall profit. Once you sell, you will have to pay much higher to buy back. Rich outsiders and investors are buying up the limited inventory and driving real estate prices out of reach of locals who then get squeezed out. Give your home to your children who will not be able to buy on their own. Bear with the rail now which will make future transportation easier. Many west siders are getting fed up with the horrendous traffic congestion and making the mistake of moving to the mainland. Then when these locals want to come back to the best place on earth, they cannot afford and are squeezed out and this becomes a place only for the rich. Don’t ever sell your home so you and your children will be able to have a legacy here.
Below average mainlanders like Grabauskas should refrain from making any of these comments after being a known con man taking the good folks of Hawaii to the cleaners with his mishandling of the rail project. Once a con man always a con man. You can continue to fool the average locals, but its the above average ones that have caught on to your game.
I agree… land prices will continue to escalate. But there will come a time with new technology when they can come back down. We should just proceed with doing the best we can at this time.
this is just all talk. When the developers can make MILLIONS selling boxes in the sky, WHY would they build affordable ? The are not in the business to help but to MAKE LOTS OF MONEY !!
How about enforcing rules regarding illegal vacation rentals in residential zoning? It’s estimated that over 5000 Oahu homes are being illegally used as hotels. If the City & County would proactively shut down these illegal businesses, it would contribute to helping improve Oahu’s housing shortage. This is exactly what they are doing in San Francisco and New York and it’s working!
Thank you ! Can’t say this loud enough !
Huivaa continues to bark up the wrong tree. There were only 2000 TVUs on Oahu, most are in Maui County, which welcomes the boost they give to its economy and the pocketbooks of local families on Maui.
The biggest cause of the housing crisis on Oahu is the bloated military presence here, the lack of sufficient on-base housing for the 50,000 active duty troops on Oahu, and their obscene tax-payer funded housing allowances ($2000 to $4000 per month). All this takes up tens of thousands of rental housing units, and inflates market pricess for many many more.
The affordable solution is to require the military to cut tax-free housing allowances, provide more on-base housing or reduce the number of servicemen. This would free up far more more than the 11,000 rental units needed on Oahu by low- and moderate-income households by 2020.
It’s sad the SA editors are too busy catering to the developers and construction industries to even mention this.
The military housing allowance is part of the military’s compensation package. The military men and women serving our country deserve to be fairly compensated. Furthermore, the vast majority of them are residents of our community and have a right live amongst us. In contrast, illegal vacation rentals are “illegal”. These hotel-like businesses do not belong in “residential” neighborhoods. They belong in resort zoning! Enforcing our zoning will not completely solve our current housing crisis, but it is an important piece to the puzzle in improving the housing supply for residents. Other municipalities are enforcing their zoning laws against the scofflaws, we should be doing the same!
Removing unreasonable roadblocks to housing development is not catering to developers. They have a legal right to build and expect a timely response to their permitting requests.
The illegal units you are referring to obviously will not be occupied by low income renters. Once the city shuts down these operations, the owners will likely sell the property to recoup their investment. The state will also be affected because the coffers will lose the TAT income stream. If you want to improve the housing shortage, stop the Housing First program as it removes rentals for lower income families from the pool. Of the 10k in population we lost last year, don’t fret as those numbers are offset by mainland homeless tourists.
Yes To many folks blame vacation rentals for not enough affordable housing. They have zero to do with each other and that includes the so called trickle down effect.
Numerous studies, including Harvard Business School and Penn State University’s School of Hospitality and Management say vacation rentals in residential zoning do negatively impact a community’s housing supply and housing costs, including affordable housing.
Shutting down illegal vacation rentals increases the housing availability for all. There would be a positive domino impact to all housing markets since the aggregate supply would increase.
Your studies do not use Hawaii as a template. Your reaching at best.
Islandsun, you’re in denial if you believe transforming a home into a hotel has no impact on the housing supply…Every house used as an “illegal” vacation rental is one less home to be used as a local residence. It’s undeniable logic.