The Honolulu City Council today is poised to consider adoption of a bill meant to give private developers of
affordable rental housing greater financial incentives to build on Oahu.
Introduced in January by Council member Tyler Dos Santos-Tam, Bill 3, if passed as originally drafted, would augment older city legislation meant to increase affordable housing options.
The measure will also tap an existing $10 million grant, comprising city general fund money, toward planned construction of over 1,100 new homes.
During the Council’s Committee on Zoning meeting in June, Council member Calvin Say offered amendments to Bill 3’s post-construction grant amounts — meant to incentivize the completion
of those affordable rentals — for units above or below
300 square feet in size.
Under that change, the owner is eligible to receive $15 per square foot of dwelling unit floor area for units less than 300 square feet in size, rented to households earning 60% or below of the area median income — an annual income at or below $55,000.
For affordable rental units 300 square feet or greater in size, the owner is eligible to receive $12,000 per affordable rental unit.
According to Say, the
$15 per square foot is “an
increase from the existing $11.25 per square foot for
affordable rental units rented to comparable household
income groups.”
“Units of 300 square feet or less are considered to be
‘micro-units’ under the city’s affordable housing requirements,” Say said at that meeting. “This increased grant amount is intended to incentivize the development of larger workforce housing for families.”
Still, private developer Paul Lam — with a history of building development projects under city incentives in urban Honolulu — disapproved of Say’s changes to the city’s grant program.
He added, “The cost per square foot to produce a 300-square-foot unit is higher, actually, per square foot.”
Effectively, the new measure bolsters Bill 7, adopted in 2019 by former Mayor Kirk Caldwell’s administration.
That 2019 legislation relaxed private development standards and provided incentives — such as property tax exemption for 10 years, and no fees for the city application process — for qualifying developers’ projects.
In 2021 the city added a grant program, Bill 1, to the existing Bill 7.
That action provided
projects with a “completion bonus” of up to $15,000 per unit, while the program was given a $10 million cap, Dos Santos-Tam’s office said.
And on June 1, 2023, Mayor Rick Blangiardi signed Bill 8, which extended Bill 7 — scheduled to expire May 21, 2024 — for another seven years, the city said.
Previously, the city Department of Planning and Permitting told the Honolulu Star-Advertiser that as of late June, 52 applications for Bill 7 projects were submitted to the city.
Of those, 13 permits were issued, while 39 permits are being processed.
But only one Bill 7 project — Puuhue Apartment LLC’s 25-unit development at 311 Puuhue Place near Liliha Street — has actually been completed, and its city-
issued certificate of occupancy granted, DPP staff say.
The Council is also expected to hold a second-
reading review of Bill 39.
As drafted, that measure would delete requirements for applicants of city-issued building permits to submit notarized affidavits declaring they have no outstanding fines or liens payable to the City and County of Honolulu.
If passed, the bill might reduce the long wait times to get a city building permit, according to DPP Director Dawn Takeuchi Apuna.
DPP admits that its permit backlog remains.
In April, DPP staffers told the Star-Advertiser that building permit applications that have a status of “plans review in progress” included over 4,730 applications for residential permits and about 3,850 for commercial permits. But DPP asserts those numbers vary.
The meeting begins at
10 a.m. inside the City Council’s chambers.
