Last May, Mayor Kirk Caldwell signed into law an affordable rental housing bill that launched a five-year pilot program through which aging low-rise apartment buildings could be renovated as taller — up to six stories high — and configured with tighter living spaces to make room for more units.
Eager to ease Honolulu’s affordable housing shortage, the City Council agreed to offer this set of property owners a large stack of city incentives. In exchange, the law requires permanently capping rents for 80% of units to align with federal affordable housing guidelines.
But last week, the Council stymied the program’s potential by approving Bill 60, which would amend the law by limiting affordability to just 15 years. Caldwell should veto this bill, which appears to be overly generous to property owners.
The new bill was supported by developers and bank representatives who said the program has been slow to find takers because property owners of these walk-up apartments are wary of in-perpetuity rental caps. In that case, the law may be in need of amending, but the Council must insist on a more even-handed compromise.
Marshall Hung, a retired developer who supported both the original bill and Bill 60, has suggested that the city should use part of its CARES (Coronavirus Aid, Relief and Economic Security) Act or other federal new employment funding to to attract more pilot participants and speed the pace of renovations.
In a recent commentary in the Honolulu Star-Advertiser, Hung said, “It would be amazing to see what a 5% cash incentive could do to get projects built in a hurry.” Yes, that indeed could be yet another carrot to be added to the bunch already offered by the city.
Currently, pilot participants get a reduced setback requirement; waivers for building permit applications and wastewater facilities charges; no park dedication fee, no required parking; and no property tax levy for 10 years.
Given the depth of Oahu’s housing problem (an estimated 20,000 affordable units are needed to meet pent-up demand), locking in affordable rents for the length of a generation — 30 years — makes much more sense than a 15-year stint preceding eligibility for market rates.
In another lackluster move, the Council has approved a final draft of controversial Bill 25, which updates the city’s Energy Conservation Code with provisions that include a watering down of initial proposals for renewable hot water heating and electric vehicle (EV) infrastructure.
The final draft allows a “points system” to determine how many stalls need to be “EV-charger ready” in new multi-unit residential structures, rather than the original call for an across-the-board requirement of 25%. It also exempts structures reserved for affordable housing.
With vehicle cost parity on track to come within the next several years — along with the city’s embrace of ambitious renewable energy goals — it’s disappointing to see the Council back away from requiring EV infrastructure that’s less expensive to install on the front-end of construction as opposed to retrofit.
Also dropped was a proposal that would have essentially shut out fossil-fuel powered tankless gas water heaters. The replacement provision allows builders to opt out of installing solar and other clean-energy heaters by obtaining a variance from the state.
The state has rightly expanded its vetting process — setting the exemption bar higher — in the aftermath of a Circuit Court ruling last year that found it had wrongfully been allowing “wholesale” exemptions. In recent years, it had approved a whopping 99% of exemption requests.
Moving forward, the city’s Office of Climate Change, Sustainability and Resiliency, which supported Bill 25’s latest draft, should track both provisions. On the road to more renewable energy, our Energy Conservation Code will likely need many updates.
