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We are compelled to respond to recent mischaracterizations of the 801 South St. project that use an inaccurate definition of "workforce housing," which is what our project uniquely provides to Hawaii residents.
Workforce housing is not "reserved housing."
These are two different categories of affordable housing that the Hawaii Community Development Authority (HCDA) provides for within Kakaako.
Most of what Sam Aiona described ("801 South St. project is not ‘workforce housing’," Star-Advertiser, Island Voices, Nov. 27) falls in the category of "reserve housing," which under HCDA rules is a government extraction. The rules require a developer of a market-priced condominium project to sell 20 percent of its residential units to qualified low or moderate-income first-time buyers.
To satisfy this requirement, the developer offers for sale, what would otherwise be market-priced units, at affordable prices. Because the buyers of such units are able to purchase a condominium unit at a government extracted discount, HCDA imposes qualification requirements on buyers that include strict income and asset limitations. Buyers are also subject to severe ownership conditions that include restrictions on resale and equity sharing requirements. However, at the end of a regulated five-year period, buyers can sell their units at market prices.
A "workforce housing project" like 801 South St. falls into a different category of affordable housing.
The units offered for sale to low and moderate-income buyers are not extractions by government. Instead, the developer is induced to voluntarily offer 75 percent of its units at affordable prices, with no government subsidies, because of the higher density allowance granted by HCDA. Without higher density, the high cost of land in Kakaako would make it economically unfeasible for a developer to offer units at prices affordable to Hawaii’s working residents without government support.
The ever-rising cost of condominium residences in the urban core of Honolulu is clear evidence of the short supply and high demand for such housing. Most of that condition is due to the lack of new inventory being built to meet diverse needs at affordable prices.
That is why, as the developer of 801 South St., our goal is to add new condominium units to Honolulu’s inventory with modern safety and design features that working residents of our community can afford. To do so, the project does not offer the many amenities and features that characterize the market-priced condominium projects in Kakaako.
The workforce buyers of 801 South St. are driven by considerations of location, quality and affordability — not luxury. That is why the project must be practically designed and priced appropriately to meet marketplace demand. Success is measured by the public’s response, which in the case of the first tower offered for sale at 801 South St., was overwhelming. It generated interest from thousands of working residents of our community. However, we only had 600 units we could offer and they sold out in one day.
To further meet the demand that exists in our community, we hope to secure HCDA approval to build a second tower with 410 additional units, all of which will be priced to be affordable to households earning 140 percent of area median income or less.
HCDA’s initiative to promote the development of workforce housing projects like 801 South St. is critical to ensure that Kakaako becomes a community with a mix of residents of different social and economic status. It will increase the area population and bring more working people to Kakaako. But it is these new residents who will create a vibrant and thriving community and revitalize the urban core of Honolulu.
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