Urban planning on an island with Oahu’s costs and needs is, by necessity, a balancing act. City officials about to review the proposal for a privately owned highrise in the urban core must ensure that the collective impact of development maintains that sense of balance.

The project in question, dubbed Kapiolani Residence, would be located at 1631 Kapiolani Blvd., near the convention center, said Timothy Yi, president of the developer, SamKoo Pacific LLC; he added that a similar second project is in the works a bit west of that, at 1391 Kapiolani, near Piikoi Street. Both are in the transit-oriented development zone surrounding the terminus of the planned rail station at Ala Moana Center.

But Kapiolani Residence, pegged for a 2018 completion, is the one to come before the City Council Oct. 7, having received approval of a package of exemptions from the state Hawaii Housing Finance and Development Corp.

These exemptions are part of what’s known as the 201H program, incentives enacted by lawmakers as a means of spurring development of affordable housing. A project qualifies by committing at least half the units to be priced below 140 percent of median income.

The advantage is that the state does not have to provide any financing help up front by approving 201H eligibility, although separately, the developer is seeking a $25 million HHFDC loan. The piper is paid down the road, primarily through revenue the city loses in waived fees.

HHFDC deemed the project qualified for the exemptions by an 8-0 vote, believing the benefits merited the cost in revenue because the yield in affordable units exceeded the requirement. SamKoo pledged to price 292 units, or about 60 percent, affordable to households earning no more than 120 percent of the annual median income for Honolulu. Under the HHFDC formula, that’s $80,520 for a single person and $114,960 for a family of four.

The exemptions will cost the city more than $15 million, including waivers of a $659,915 building permit fee and a $25,000 plan review fee.

But the big sacrifice is the $14.3 million park dedication fee that would be exempted. In reviewing a preliminary environmental assessment on the project, the city Department of Planning and Permitting rightly expressed concern that eliminating the entire fee was too high a price to pay.

The City Council will need to weigh whether it can afford to sacrifice that much, especially given that other projects will be coming down the pipeline as part of TOD redevelopment. The city has a critical need for revenue in providing for parks and their upkeep in a densely populated island.

There were also height-limit and setback reductions allowed. The 400-foot tower would exceed the current ceiling by 50 feet, but this is less of a concern because it’s likely higher towers will be allowed in TOD zones.

Yi said setback reductions are along the back, Kona Street side and on the Ewa side. A greater-than-required setback of nearly 27 feet will be provided on the Kapiolani frontage, for a plaza area with sidewalk seating, he added. This mitigates the setback sacrifice in this case, but city officials will need to scrutinize such exemptions carefully, going forward.

Nobody can dispute that Oahu’s deficit of workforce housing is a crushing problem, one that will require private participation and the incentives to attract those partners.

But with rail-related development planning just starting to ramp up, now is the time for caution. City decisionmakers, and the state lawmakers crafting the incentives, must take care that the public doesn’t give away so much that other needs — provisions for parks and open space — go wanting.