Build needed housing, rail in tandem

Blame rail on affordable housing policy. The terrible traffic forcing the decision to build rail was thanks to the original affordable housing policy levied on housing development in the 1980s. Results? It was successful then: 12 percent of our community relocated westward — 100,000 more people in Ewa, 75,000 more in Central Oahu, over nearly 40 years.

Successful now? Demographics show we are more under-housed and unhoused than ever before. About 1 in 5 families — over 86,000 households — can only qualify for affordable rental housing at 60 percent of area median income (AMI). Compare this with 10,000 total affordable rentals. This spells homeless.

And the transit solution for the problem the affordable policy created? The rail costs are significantly higher than planned, and the state and the city are unable to decide over how to pay. This spells political gridlock.

So, what’s our biggest problem today: Is it shelter, or commute? It’s both. And we should fix both. By putting them together. Put homes next to the rail stations, and you get more ridership. A lot more. It needs more. And that is in the works.

But our concern is that the new affordable housing policy changes that the state — via the Hawaii Community Development Authority — and the city are proposing will choke off supply. That’s what developers are saying: new rules, fewer houses.

History repeats itself, as this is exactly what happened 10, 20 and 30 years ago. Supply averaged 2,200 homes per annum, 2000-2010, versus 6,500 homes per annum, 1970-80. That’s down 33 percent. And prices? Up 500 percent, $135,000 versus $746,000, from 1980 to 2016.

That’s what created today’s tremendous unmet demand for housing: the 1 in 5 families mentioned above. Then another 1 in 5 families needs either a market rental unit or workforce for-sale housing to shelter themselves — and there is hardly of either.

Simply put, more regulations cut supply. Lower supply, higher prices. But if supply rises, prices soften. Plus there’s more shelter, which brings more welfare, a happier community.

To be sure, the regulators, policy wonks and affordable advocates say the new rules help. Yes, they help equity, and fairness. But supply? Nope. Some folks will get more shelter. But not all, and certainly not that many. And especially not workforce families here, caught in the middle: they earn too much to qualify for affordable housing, and too little for market housing.

Remember, the policy needs market-rate sales to work. They subsidize the affordable ones, for lower-income families. And the lower that low-end is, the greater subsidy needed — with little left for housing the workforce. So rules punish market-rate workforce supply (not enough profit), and encourages luxury supply (which can). Robin Hood’s model.

Instead of this, we should upgrade and expand the public-private partnership model by which all affordable rental housing gets done today. The private sector brings knowledge, speed, efficiency and passion; the public one contributes public land, low-cost financing and, most importantly, scissors to cut through red tape. We should put to use public land around the stations: for homes, stores, doctor’s offices, et al.

This is a once-in-a-lifetime opportunity for affordable transportation and affordable housing, and get one to help pay for the other. So that we don’t cannibalize the public budgets.

Change the rules, yes. But make the rules serve the goal of sheltering everyone: workforce, affordable, market, rental, etc. And, unintended consequence, housing fairness will follow. Also, intended consequence, affordable housing policy will fix a problem it created 40 years ago.

Ricky Cassiday is a residential market consultant; John Henry Felix is an executive, former City Councilman and a Honolulu Authority for Rapid Transportation board member.