Two years ago, Mayor Kirk Caldwell underscored the need for more affordable housing by asserting in his State of the City address: “If we don’t change the course that we’ve been on for a long period of time this island becomes a de facto gated community, only for the exclusive few.”
That foretold the deepening problem, now several decades in the making. Oahu today needs an estimated 25,000 affordable housing units to meet pent-up demand, but in recent years the marketplace has been adding only a few thousand units to the supply annually, with many priced in the luxury bracket.
Since the mayor’s 2017 address, the city has rolled out various incentives tailored to entice private-sector developers to build more affordable housing. Last week, another promising plan was unveiled, targeting owners of smaller apartment-zoned properties who opt to build low-rise rental buildings.
In exchange for carrots such as increased density, tax breaks, fee waivers and exemptions from requirements like elevators and parking, a property owner would be required to rent, for the life of the building, at least 80 percent of the units to those making no more than 100 percent of area median income (AMI).
The U.S. Department of Housing and Urban Development defines 100 percent AMI for a family of four on Oahu as no more than $116,600 in 2018 dollars. That would mean truly affordable rents of $1,000 to $2,000 for units with one to three bedrooms.
The proposal — now before the Honolulu Planning Commission, which will send its recommendation to the City Council — has win-win potential. An estimated 3,000 lots, including many urban properties now occupied by sagging older wooden buildings, could take advantage of the program as opportunity to spruce up and expand offerings for tenants.
Among the expansion-focused incentives: Some low-rise apartment rental buildings could grow vertically — up to six stories high, but without an elevator unless there are services open to the public on higher floors. And a tighter floor-area ratio (density) would make room for more apartments. In many cases, this would essentially double available occupancy.
Recasting the low-rise building, which was a popular construction project in the 1960s and 1970s, is a sensible idea. Caldwell is optimistic that the initiative will succeed if building costs pencil out at or under “the magic number” of $225 a square foot, making such work financial feasible for developers.
Still, a few of the proposed cost-cutting incentives could present challenges to curbside appeal. One would reduce required setbacks to 10 feet for the front yard of a building, and 5 feet for the side and rear yards. While maximizing lot space, the city should aim to avoid the unattractive “monster-
house” aesthetic now dotting some residential neighborhoods.
The hands-down most-concerning incentive would eliminate all requirements for off-street parking, provided a single loading zone stall is available. In the absence of on-site parking spaces, many tenants would likely cruise already crowded nearby streets in search of curbside parking. That alone could touch off neighborhood opposition to this rental housing pitch.
Honolulu Hale is making an effort to rid residents of car-centric habits by installing more bicycle paths and pedestrian-friendly “Complete Streets” features. Still, it’s a safe bet that regardless of emerging multimodal options — including plans for elevated rail transport— prospective tenants would want to hold onto car ownership.
City leaders need to scrutinize each element of the low-rise makeover proposal and hammer out a workable balance of calculated risk and safeguards. It will take incentives and risks — shouldered by both the city and developers — to tackle Oahu’s worrisome trajectory for affordable housing demand.
