Mayor Kirk Caldwell, the City Council and others who have long touted the ongoing rail transit project as a wonderful window to reducing Oahu’s affordable housing backlog need to push much, much harder to seize the opportunity. And that should start with saying “no” to developers seeking concessions that make room for more market-priced housing units while tossing a bare minimum of scraps to the city’s
affordable housing inventory.
The latest case involves a proposal for two more 400-foot-tall buildings near the envisioned rail-line hub in Ala Moana. Planned by local developer Avalon Group LLC, the Sky Ala Moana project includes a 43-story tower with 388 market-priced for-sale condominium units, and a 39-story tower with 300 condo-hotel units and 90 for-sale units reserved for affordable housing — as defined by the city.
Avalon’s proposal hinges on securing a permit to build higher and more densely than now allowed under current zoning.
But at a public hearing on the project last week, a Unite Here Local 5 representative rightly questioned the project’s affordable housing count, pointing out that 31 of the units are targeted for those making up to 140 percent of area median income (AMI). That’s an outdated — and wide-of-the-mark — definition of affordability.
The bulk of Oahu residents in need of affordable housing are at or below the 80 percent of AMI. Based on the latest federal figures, that tops out with a family of four making ends meet with an annual income of $83,680. By comparison, the income for a family at 140 percent of AMI is $146,440. Big difference.
In April, when Caldwell delivered this year’s State of the City address, he signed off on a bill, through which, he said, “developers will no longer be able to build homes at the 140 percent area median income, which for a family of four is a home selling for conservatively, between $750,000 and $850,000, which was classified as affordable but we all know really isn’t.”
In an effort to set the price tag for affordable housing within reach of more residents, developers must now build for levels maxing out at 120 percent, 100 percent and 80 percent of AMI. That’s an overdue regulatory move in the right direction — especially for transit-oriented development (TOD), which has been underway for a decade now. But a tougher regulation is of no use unless defended.
While the current plan for Avalon’s Sky Ala Moana may or may not technically fall short on providing its share of affordable housing, what’s clear is that city leaders should not make concessions for a project situated in a prime TOD site that yields a total of nearly 600 market-price units and just under 60 affordable housing units.
In his 2017 State of the City address, Caldwell said Oahu needed some 24,000 affordable housing units. Since then, the city has made a small dent: In the year that followed, nearly 1,040 affordable units were added. But at that pace, demand will likely go unmet for decades to come.
Avalon has contended that due to rising interest rates and construction cost increases, an earlier plan envisioning more affordable housing is no longer feasible. Its request to bring more tourism-oriented lodging than affordable units to a patch of land between Kapiolani Boulevard and Makaloa Street is wholly disappointing, though not unexpected.
After all, in the last two years, the City Council has made permit concessions for at least four other tower projects along the Kapiolani-Keeaumoku corridor, where the proposed rail station is expected to significantly bump up property values and tax revenues.
City leaders shoulder the difficult task of persuading developers — many of whom are fixated on the lucrative luxury housing bracket that dominates new construction — with building more housing for moderate- and low-income residents. The much-needed inventory will materialize at a faster pace only if it’s clear that concessions at the expense of affordable housing are rejected as unacceptable.