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Wednesday, September 17, 2014         

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Rail has role in housing

The city's transit line has potential for triggering a rise in affordable units

By Andrew Gomes

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Oahu's planned mass-transit line promises relief for many commuters facing present and future traffic troubles, but the rail system also might help relieve another social ill: the lack of affordable housing.

Experts on Hawaii land use and development policies see rail as a huge opportunity to address an affordable-housing crisis that more or less has festered over the last decade despite efforts by state leaders and community organizations.

The rail line's 21 planned stations between Kapolei and Ala Moana Center are expected to be catalysts for new urban development to which the city attaches requirements and/or incentives to build affordable housing.

"With the right infrastructure, zoning and incentives, I think it is extremely doable," said Chuck Wathen, chief executive of Hawaii Housing Alliance, a group that advocates for affordable housing.

The estimated $5.3 billion public works project is of such a scale that with the right ideas, producing affordable work-force housing connected with rail could rival the biggest past initiatives on Hawaii's most populous island.

Most affordable housing on Oahu in the last few decades was the product of a county requirement that developers produce a certain percentage of homes at moderate prices for moderate-income residents if they build on land rezoned for housing. Prior to that, significant contributions included private projects funded by the federal Department of Housing and Urban Development and city projects.

Increasingly, however, land acceptable for urbanization — primarly farmland and rural areas — is being exhausted. That has positioned the city's planned rail system to be the next big opportunity for affordable-housing growth.

The need for modestly priced housing on Oahu is great. A legislative housing and homeless task force estimated five years ago that 19,650 new units on Oahu would be needed by 2009 for households earning up to the annual median income. Nowhere near that number has been built.

Working on the problem — or opportunity as it relates to rail — will be a public-private partnership.

Earlier this year a partnership involving the city, Wathen and Kamehameha Schools was awarded a $2.4 million federal grant to explore opportunities for delivering work-force housing surrounding the 21 stations.

Terry Ware, the city's transit-oriented development manager, said the challenge is exciting. But he cautions that any results would, like rail construction, happen over a long period. Ware also believes there won't necessarily be a silver bullet to the vexing problem of providing homes that low- and moderate-income residents can afford, given the high cost of multifamily housing construction.

It's hard to predict what ideas integrating affordable housing with rail will be generated and implemented within transit-oriented development, or TOD, zones extending a half-mile around each rail station.

Perhaps new neighborhoods around stations will resemble other communities but with reduced automobile parking. Or maybe they will include apartment complexes with units no bigger than 80 square feet and shared kitchens and bathrooms. Or perhaps skyscrapers will rise to new heights in Honolulu's urban core.

One chief purpose of the grant will be to review public policies that serve as barriers or incentives for affordable-housing development, and to suggest new ideas or revisions of these policies.

Existing policies include programs providing government land, permitting variances and tax-credit financing to private companies that build affordable housing. Zoning rules and building codes are other key policies.

Draft TOD guidelines have so far been produced for eight of the 21 station areas — the most westward stations between East Kapolei and Pearlridge. Draft guidelines are in the works for the 13 remaining station areas.

The eight station area plans suggest the city require 20 percent of new housing with more than 29 units in a TOD zone be affordable to households earning no more than 80 percent of Oahu's median income, which is considered low income and equates to about $55,650 for an individual or $79,450 for a family of four.

Providing 25 percent low-income housing in a project would be a bonus incentive, allowing developers to increase housing density, according to draft guidelines.

The proposed 20 percent requirement is less than the present requirement to provide 30 percent affordable housing for projects on land that needs a zoning change for residential use.

However, the present requirement allows developers to build more expensive homes, with only 10 percent for households earning less than 80 percent of the median income. Another 10 percent can be for moderate-income households earning 80 percent to 120 percent of the median income. The last 10 percent can be for households earning up to 140 percent of the median income, which is about $80,070 for a single person or $114,380 for a family of four.

All draft guidelines are subject to revision and approval by the City Council.

The Council might find it difficult to agree on an optimal affordable-housing policy around transit stations. Requirements sometimes can be too onerous and result in little production. Such was the case with a 60 percent affordable-housing requirement during the 1980s. On the other hand, not enough incentive or looser requirements could also produce little.

Whatever affordable housing rules emerge, the potential for production is great, given the number of homes expected to be built around rail stations.

For instance, around the Pearlridge station, housing is expected to grow from 460 units at present to 3,900. The other seven station area plans anticipate a combined addition of 13,100 units. For all eight stations, 3,400 to 4,250 affordable homes might be produced under the draft guidelines. Higher densities of housing development are anticipated around some stations in Honolulu's urban core.

Ware said the city partnership will form an executive committee with representatives that include developers, lenders, designers, nonprofit-housing providers and other groups to help formulate recommendations.

Another task of the partnership and the federal grant will be to create a database of landownership and existing low-cost housing along the rail route to get a good idea which properties potentially could be used for private or public affordable housing.

For instance, apartment buildings that date to the 1960s and 1970s in Waipahu and that are near the planned station site serve as affordable housing. A major objective in this area is to maintain the quantity of such housing while improving its quality.

In other areas the state owns large parcels with room for development along the rail line, including sites at or near the planned University of Hawaii-West Oahu campus, Leeward Community College and Aloha Stadium.

A third major purpose of the grant will be to build one affordable-housing complex that could be a model for more along the rail line.

"It's an out-of-the-box creative prototype," Wathen said.

Ware said the project could be the conversion of a commercial building to affordable homes, or building homes using shipping containers, or some other idea.

One idea floated last year by the Legislature in a Senate resolution suggested examining the feasibility of single-room occupancy dwellings, typically 80-square-foot rooms in a complex with shared kitchens and bathrooms.

So-called SROs around rail stations would have the benefit of reducing the two highest expenses for most households: housing and transportation.

"Households near transit stations have greater access to jobs, services and recreation, without the need to own a private automobile," David Tanoue, director of the city Department of Planning and Permitting, wrote in a letter last year to Senate committees covering housing and transportation issues. "SRO is part of the TOD housing mix that will need to be explored for Honolulu."

A report by the Hawaii Housing Finance & Development Corp., a state agency that facilitates affordable-housing production, raised doubts about SROs playing a major role in transit-oriented development but said it is a potential way to address housing needs of very low-income individuals.

Ultimately, any model project pursued by the city partnership will require financing beyond the federal grant to be realized.

The demonstration project is a chance to produce affordable housing in a radically different way, but Ware said market forces will largely determine what — including affordable housing — gets built where and when.

"The presence of a roadway doesn't produce magical growth of development," he said. "It's the same with transit. Transit is the icing on the cake. You still have to have the cake."






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