The Honolulu City Council has advanced and should enact Bill 8, extending the life of a city grant-and-incentives program that encourages private development and redevelopment of affordable rental housing on Oahu. The need is there, and the program is working to create more rental units for households with midrange and lower incomes.
Enacting Bill 8 will delay the automatic repeal, or “sunsetting,” of the city’s Ordinance 19-8, known as Bill 7 before its enactment. This would extend the original ordinance for 10 years, until May 31, 2034.
The Bill 7 program offers incentives to developers who seek to build apartment buildings with higher density — more units in a building than would be allowed under standard city zoning and building code standards — and rent them out to moderate- or low-income residents, in areas already zoned for apartments or mixed-use properties.
Developers who apply and are approved by the city’s Department of Planning and Permitting (DPP) can receive city grants of up to $9,000 per unit rented to households earning 60% to 100% of the area median income, and up to $15,000 per unit rented to low-income households, those earning below 60% of the area median income.
Tax incentives and property tax exemptions, and expediting planning and permitting with no fees are additional incentives. Projects may also bypass a City Council vote, with a 90-day automatic approval. However, developers don’t bypass all scrutiny; they must obtain approval of their plan by DPP before the city issues a certificate of occupancy, verifying that the projects meet code standards.
DPP Director Dawn Takeuchi Apuna says the city supports the measure because it would allow more time for Bill 7 projects to come through. DPP, she said, has approved eight such projects so far, and there are about 30 projects under review. That is promising news.
However, the Bill 7 program was also faulted by Apuna for being difficult to interpret, and therefore difficult to work with. If improvements can be made via
Bill 8 to smooth out these difficulties while still maintaining proper standards, the city and City Council by all means should work toward those.
This affordable-housing program was characterized as temporary when Bill 7 was enacted in 2019, and that was proper as the city looked to see whether it would produce results. At this time, it has. Allowing the ordinance to expire in 2024 could well discourage potential developers of affordable rental units from coming forward. It would be shortsighted to let that happen.
Earlier this month, Hawaii’s U.S. Sen. Brian Schatz told national news magazine Slate.com about his current crusade to encourage private development of affordable housing, voicing his support for programs that remove “barriers to affordable housing production.” Schatz put federal money behind this effort, inserting an $85 million grant program into the 2022 appropriations bill in December.
We agree with Schatz that the nation — and specifically, Hawaii — needs to eliminate restrictive zoning and regulations that keep apartments and other housing unaffordable to middle- and low-income people. The elderly, the disabled and students, to use Schatz’s examples, are often priced out of available units.
The federal grant money might be available to Honolulu for programs such as Bill 7. If this local program can leverage federal money, all the better; if not, that is another tweak to its policy the city may want to consider.
It’s laudable that Mayor Rick Blangiardi’s administration has pledged to work with the state and to focus on federal incentives available to increase housing production. Bill 7 is just one piece of the puzzle, but it is worthy of the city’s continued support, via the Bill 8 extension and improvements.
