The Honolulu City Council advanced a measure that aims to increase affordable rental housing by offering financial grants to private developers.

Bill 1 was introduced by Council Chairman Tommy Waters at the request of Mayor Rick Blangiardi, who was present at Wednesday’s full Council meeting.

Blangiardi spoke in support of the measure, which is part of his plan to expand affordable housing.

“How do we satisfy that? Through a really smart incentive program that really gets our private landowners involved in the business of helping us provide housing,” he said.

The financial grants would be distributed to developers who rent to households earning below the annual area median income.

In Hawaii, the area median income for one person is $71,100 and for a family of four is $101,600, according to the Hawaii Community Development Authority.

For developments renting to households above 60% of the average median income, the incentive would be $11.25 per square foot of living space in the building permit, but would not exceed $9,000.

For developments renting to households below 60% of the average median income, the incentive would be $15 per square foot of living space in the building permit, but would not exceed $15,000.

The bill also limits the total amount of grant money offered from the program to $10 million.

However, the Department of Permit and Planning only has $300,000 budgeted for this fiscal year. That equals about 53,500 square feet of units for households that make over 60% of the average median income or 40,500 square feet for households that make under 60% of the average median income.

Over 31 applicants have already applied, according to Council member Calvin Say.

“I just hope that DPP would facilitate their permitting process,” he said. “You have to finish the project, or your development, before you can even qualify for the grant.”

The grant would only be paid to the owner of the affordable rental property after being issued a certifi­cate of occupancy for the project.

Council member Andria Tupola recommended that DPP Director Dean Uchida set a goal for the number of permits to be issued for the project, which would end in three years.

“I would hate to see it get caught up. And then at the end of the three years, we sunset and only a few projects have been approved,” she said.

The bill is expected to be discussed further in the Housing and the Economy committee, which is next scheduled to meet April 20.