Did you know 1 out of every 3 condominium units completed in Kakaako last year was affordable to first-time home-buyers who otherwise would not be able to afford housing in this community?
Of 1,625 units completed in 2016, 516 are what we at the Hawaii Community Development Authority classify as Reserved or Workforcehousing. Generally speaking, that’s housing affordable to local families. It is targeted to working people who make too much to get government assistance, but not enough to buy market rate units. But what if I told you that it’s possible those units could be flipped quickly at a profit and they won’t be in the same affordable range for the next hopeful buyer?
HCDA is faced with the question of how we encourage more units be built for local families while keeping them affordable longer.
On the surface, the issue is something I think our community can agree upon. Honolulu has already seen a loss of thousands of affordable housing units over the past few decades, most of them built with significant government housing subsidies, because affordability requirements on those units have lapsed. To catch up and keep pace, we will need not only new government assistance for rental housing, but also a stable inventory of reserved and workforce units so that our future generations aren’t forced to move away because of high housing costs.
The beauty of the Reserved and Workforce housing approach is no taxpayer money goes to subsidize these units, but there are other costs. We allow developers to build more units than would otherwise be allowed and to waive fees and other requirements in exchange for a restriction on the sales price.
The hope is no one flips their units at market rates making a windfall profit at the expense of the public’s goodwill. But the devil is always in the details.
How do we craft rules to ensure these goals are reached? How do we protect homeowners to ensure they get a fair return on their investment if they sell to move up the housing ladder without denying opportunity to those still trying reach the first rung? How do we make sure developers continue to develop these units? To that end, we spent almost three years developing new rules, having 10 public board meetings where the issue was discussed.
Board members sought input from developers, residents and other stakeholders over many months. Last month, we started a formal hearing process of two public hearings. By law, the first hearing could be held before a hearing officer as opposed to the full board. This is not unusual for boards and commissions when a complex matter is being considered.
When you have been working this long and hard on an issue, there is wisdom in allowing someone else to gather the testimony, summarize it and provide a report from a third-party point of view. Having testimony organized in this manner enables us to inform ourselves about the issues so that we can ask relevant questions and have an informed deliberation at our second public hearing
Rest assured, we read every piece of testimony. This is a board whose members put in the work to be responsive to the community’s wishes.
We want to hear what we can do to help. Our second hearing is on May 3 in our boardroom at 547 Queen St. The authority will be at that meeting to listen to the testimony and attempt to decide on whether to adopt, reject or amend the rules. We invite you to testify. You can find them and background material here.
