The developer of Kuilei Place moved a step forward on its path to build a 43-story, $619 million condo tower in Moiliili last week, when the Honolulu City Council’s Zoning Committee approved of its plan.

If given the go-ahead by the full City Council, Kuilei Place will receive upwards of $40 million in value by being allowed to build much higher and denser than the area’s zoning allows. The Zoning Committee also signed off on another $12 million in tax breaks and fee waivers.

These variances are granted for building “affordable” housing under the state’s 201-H affordable-housing law, as interpreted under the current policies of the state’s Hawaii Housing Finance and Development Corp. (HHFDC). But the HHFDC’s decision to grant valuable zoning breaks based on the inclusion of units costing upward of $800,000 — for “high-moderate income” households earning upward of $182,000 annually — is not taking the city where it needs to go.

Lax classification of projects as affordable, in combination with policies that allow homes to lapse out of affordability requirements too quickly, can lead to continuing evaporation of units from the affordable-housing pool. That’s an unacceptable result, and one that is readily visible when it comes to Kuilei Place, where affordability would be required for only 10 years.

Of Kuilei’s 1,005 units, 603 are classified as affordable to households with moderate and high-moderate incomes, at prices ranging from $371,800 to $813,300. Once monthly fees and utilities are added to this cost, low-income families could not hope to gain entry.

At this site, 141 low-rise, low-income apartment units will be torn down to build the new condos. To remove this housing without a mechanism for replacing it, either on the project’s footprint, or nearby, is shortsighted and adds to Oahu’s problems.

Without question, the cost of housing in Honolulu has reached unattainable levels for many, such as a theoretical teacher-and-firefighter household, and it’s valid to support housing for local essential workers. But the city and state need to keep focus on desired outcomes, as well.

With a new state administration in place, HHFDC needs to revisit its requirements for 201-H qualification. Considering the average cost of housing in Honolulu, it’s supportable to include a measure of moderate-income affordability in projects that qualify for waivers and tax breaks — but the framework needs better calibration.

As Tim Streitz, chair of the McCully-Moiliili Neighborhood Board, stated, “The ‘affordable’ units are not adequately serving lower-income residents and, therefore, do not merit the generous exemptions in exchange.”

This project now goes before the full City Council for approval on Jan. 25. As the draft Council Resolution 22-298 states, this would require waiving city affordable housing requirements, which are more stringent than the state’s. In 2021, the city Department of Planning and Permitting found the project did not include enough truly affordably priced condos to qualify. The City Council should press the issue.