Key developers say the city’s Islandwide Housing Strategy is a step in the right direction, but few agree on how it will spur affordable housing for Oahu’s low-income and working-class residents.

Alan Arakawa, senior vice president of planning for A&B Properties, said the company generally views Mayor Kirk Caldwell’s strategy as positive.

However, Arakawa said, more housing projects at market rates must move forward while the economy is strong for Oahu to have a shot at building its way out of the affordable-housing crisis. Additional government funding for affordable and low-income housing projects also is needed, he said.

"Anything that reduces the time and cost involved with an affordable-housing project will make it easier for a developer to finance and ultimately develop affordable housing," said Arakawa, whose company has built thousands of affordable units across Hawaii since the 1950s.

David Striph, senior vice president of the Hawaii region for The Howard Hughes Corp., agreed that mixed-market development and incentives are needed to drive affordable housing. Striph said the success of two market-rate projects in the Ward Village master plan let the company build 988 Halekauwila, a 375-unit workforce development.

"By developing market-rate projects that subsidize the workforce housing, we are able to bring these much-needed homes to the workforce," he said.

He commended the city for revamping affordable housing requirements. Like Arakawa, Striph said success depends on the city and state continuing to contribute public lands and offering competitive financing and other incentives such as tax relief and subsidies.

Many developers rely on government subsidies and market-value projects to underwrite affordable units, but longtime kamaaina developer Peter Savio said those practices raise the costs for everyone.

"The city’s strategy is better than what we do now," Savio said. "But it has not solved the problem of rental housing taking money and value from the renter and giving it to the landlord. All we are doing is using the poor and affordable housing to create value for the wealthy."

Savio has only a few units left at the fee-simple Rycroft Terrace project, which sold some units to buyers with annual household incomes below $30,000.

He said affordable housing and market-rate projects should not be linked. Incentives should go to developments that are 100 percent affordable and remain that way forever.

"We also need to focus more on programs like my new concept ‘Share,’ which turns renters into owners by allowing them to keep the principal on the property so that they can eventually buy their own homes," he said. "As it is now, I see seniors who have rented forever and upon retiring are forced to move in with family, go on the government dole or become homeless."

Jon Wallenstrom, president of Forest City Hawaii which recently broke ground on the 499-unit Kapolei Lofts rental community, said Oahu’s hot market doesn’t need incentives to spur development, affordable or otherwise.

"It’s really more about making land available since rental makes a great deal of sense here. There’s extraordinary demand and very limited supply," Wallenstrom said. "Forest City had very limited incentives and we’re looking to do more projects. We can address this with a market-based approach. It’s my feeling that the city should be thinking about things in that way."

Kapolei resident Kala Holden said locals will flock to Kapolei Lofts, where 60 percent of the units are for households making less than $134,110 annually and 20 percent are for households making $76,650 or less.

"There are many reasons for the housing shortage, but always it comes back to not enough planning. We need real change," said Holden, who has watched her community struggle with affordable housing for decades.

Oahu real estate consultant Ricky Cassiday said public-private partnerships only work if both sides bring something to the table.

"The honest truth is that it’s a weird partnership. What elected officials want is re-election and private developers want to make money — they won’t develop without a pot of gold at the end of the rainbow," Cassiday said.

He said the city and state need to incentivize developers to build affordable housing, which comes with lower profit margins and greater chance of bankruptcy. In return, Cassiday said developers must take on tighter margins and leave more of what they build on the table.

"What we need is the spirit of cooperation with both sides doing what it takes to help their partner survive," he said. "We need everyone to focus on success. This is about our children’s future."