While Hawaii has ranked in recent years at the edge of top 10 lists for states with the highest median wage, living expenses here are roughly two-thirds higher than the rest of the nation. The most daunting cost-of-living challenge: housing.
Among the obstacles to a ready supply of affordable housing are island-state geographic limitations, construction costs and government regulation. On Oahu, Honolulu Hale has estimated that upwards of 20,000 affordable units are needed to meet pent-up demand.
Making the latest welcome dent in the problem is Ililani, a 42-story tower that’s slated for Kakaako, with nearly half of its 328 condominiums to be set at local rates for moderate-income households. Underscoring the demand for urban core affordability, the count of applicants vying for a lottery chance for condo purchase last week topped 550.
Swaths of Kakaako, including Ward Village, cater largely to luxury: several new market-priced towers built in recent years have had average prices of $1 million or more. Ililani, which falls under Hawaii Housing Finance and Development Corporation guidelines, will expand a cluster of affordable housing.
Within a few blocks of Ililani, at Keawe and Halekauwila streets, are a half dozen affordable-housing complexes. Among the closest neighbors are the Keauhou Lane mid-rise with moderately priced rentals, the Na Lei Hulu Kupuna mid-rise for seniors and the nearly complete 14-story Nohona Hale rental tower for low-income residents.
Moving forward, Honolulu needs many more such clusters, and fewer priced at Hawaii’s sky-high market rates. In Kakaako and other areas set to be folded into the 20-mile rail line, transit-oriented development opportunities should be tapped — aggressively — to make bigger dents in affordable housing.
Plans are in the works for 21 rail stations along the elevated line, stretching from East Kapolei to the terminus in Ala Moana. The city has pitched TOD as a catalyst for mixed-use hubs — housing (affordable housing, especially), jobs and services — within a half-mile radius of the rail stations.
TOD presents opportunity that should not be squandered. On that score, it’s frustrating to see that city-developer agreements forged to date, which include incentives for housing construction near stations, are generating deals for a lot more tourism-tailored lodging than affordable housing for local households.
On the horizon, TOD opportunity should be seized to build mostly affordable units near Aloha Stadium. The Halawa site appears to be headed for mixed-use makeover as an “entertainment district,” including housing, near a planned rail station. In July, Gov. David Ige signed off on legislation that appropriates $350 million for redevelopment efforts.
While Oahu is hardest hit, housing affordability is a statewide concern. According to a 2015 state report, the decade-long estimate of demand for total new housing, 2015-2025, is a whopping 64,700 to 66,000 units. In response, Hawaii has enacted various laws aimed at stepping up development of affordable units and expanding the scope of rental housing.
Still, more action is needed. As state lawmakers prep for the 2020 Legislature, they should pick up study of Senate Bill 1, which was introduced this year by Sen. Stanley Chang. Based on a Singaporean model, the measure envisions construction of dense condo towers near rail stations sold at cost under leasehold land tenure.
As the largest landowner of properties along the transit line — about 2,000 acres — the state is well-situated to pursue such redevelopment to maximize the benefits of state lands.
At both the city and state levels, bold moves are in order to tackle an affordable housing problem that’s not going to fade away.