Government has long authorized private development of residential areas on the condition that the builders, in partnership with government, include a significant number of homes for lower- and middle-income families. The recession, though, has allowed developers to backslide on the number of such needed affordable units, especially on the lower-cost spectrum.
Of all conditions imposed on developers during project approval, the pledge of affordable housing and rentals should be the most non-negotiable. With the rebound of Hawaii’s economy, government must ensure that such promises by profit-driven developers be kept and met.
The state agreed several years ago to allow private development on 40 acres in Kapolei that included 751 homes for sale or rent to occupants who met income restrictions. However, more than 100 of those homes were converted to houses for sale without income restrictions to buyers, and the state’s Housing Finance and Development Corp. allowed the changes asked by Castle & Cooke Homes, the state’s private development partner. Income restrictions were lifted on about 20 percent of the homes.
In return for receiving the Kapolei land from the state free of charge, Castle & Cooke was allowed to sell about 500 townhouses and single-family homes on a fee-simple basis and 300 low- or middle-income rentals, but it had to change the plan because affordable buyers had fallen while building costs rose.
The company’s original plan to build 310 rentals for low- and middle-income families was reduced to 144 rentals, while plans for 441 homes for sale was increased to 501.
That kind of development was intended to work for house builders as "a balancing act," Chuck Wathen, an affordable-housing advocate, told the Star-Advertiser’s Andrew Gomes.
"You got to make a profit at one end to subsidize the other end," he said.
Granting of corporate changes departing from initial government-approved plans should be the rare exception rather than the norm. For example, boaters and residents near what developer Haseko (Hawaii) Inc. had been planned for years as a boat marina in Ewa Beach were rightfully miffed by its proposed change to a mere lagoon.
In present cases, the state Land Use Commission should hold Ho‘opili developer D.R. Horton to providing 159 acres for commercial farms, 84 acres for home gardens and eight acres for community gardens in its community in Ewa.
Likewise, in the case of Castle & Cooke’s Koa Ridge community between Mililani and Waipio, the commission must ensure that the developer follows through on its promise to lease 335 acres and an option of 333 acres near Wahiawa to Aloun Farms.
Perhaps even more important, government must see to it that Koa Ridge’s developer delivers the affordable housing it presents in its plan: that in accordance with the city’s affordable-housing guidelines, approximately 1,500 homes there will be priced in the affordable range for qualified residents.
On an island clamoring for affordable housing, such supply must rise to meet community demand — especially if these were the developer’s selling points on the way to approval. It’s even more imperative when the project involves former state lands: Taxpayers must receive substantial public benefit for the precious acreage sacrificed.
In the case of Castle & Cooke in Kapolei, the developer had agreed on one parcel to build 72 low-income and 102 middle-income rentals and 114 for-sale townhouses for buyers earning no more than 120 percent of Oahu’s median income. However, while completing the low-income rentals, the company dropped plans for the middle-income rentals and increased the for-sale townhouses to 140 units, mostly for buyers regardless of income and the remainder with incomes within 140 percent of Oahu’s income.
Castle & Cooke won the competitive bids for that Kapolei construction in 2005 and 2007, prior to the explosive economic downfall, so concessions were made by the state to allow changes. But Hawaii’s economic seesaw has changed now, and alterations in housing projects that include affordable housing should not be so routinely allowed.