Developers of the 11,750-home Hoopili project in West Oahu say they are OK with being required to offer more homes at lower prices as sought by Honolulu City Council members.
But in return, executives of D.R. Horton-Schuler Division said they want the flexibility to shake free of that requirement if lower-income buyers don’t come forward and purchase those units within four to eight months after they go on the market.
They would then sell those houses at the same price to people in higher income brackets.
"Without such a provision, we could be required to hold constructed units indefinitely if we are unable to find a qualified buyer," said Cameron Nekota, Horton-Schuler vice president, after a meeting of the Council Zoning Committee on Thursday.
Despite the tentative deal with Horton-Schulter, the committee chose to hold up the Hoopili rezoning request until the end of the month so Council members, the developer and the public have time to digest the affordable-housing requirement and other proposed changes sought by Council members.
The number of homes being planned for the 1,554-acre site — mostly agricultural lands sandwiched between Ewa, Kapolei, Makakilo, Kunia and Waipahu — makes the rezoning request the largest to come before the city in at least two decades.
The city typically requires developers to designate a minimum of 30 percent of their homes as "affordable housing," available at prices within reach of those making up to 140 percent of what federal housing officials calculate as a region’s median income, also known as "area median income," or AMI.
The 2014 guideline says the median income for an Oahu family of four is $82,400.
For the past year, Councilman Ron Menor has called for changing that definition of affordable housing so that only homes within reach of those with 120 percent of AMI or less would meet the definition. That change essentially adds more homes to be set aside for those making less by disallowing homes aimed at those between 120 and 140 percent AMI from being considered affordable.
Menor and Council Zoning Chairman Ikaika Anderson urged Horton-Schuler to follow that new guideline, meaning that 3,525 of Hoopili homes would have to be made available at prices considered affordable to those making 120 percent of AMI or less. Specifically, 20 percent of the homes would be aimed at those making 80 and 120 percent of AMI, and 10 percent at those making below 80 percent.
Nekota said the developer is amenable to the tougher threshold because the company has traditionally tried to cater to first-time buyers.
But he said the company wants to be able to move the homes quickly, and asked that they be marketed to those making up to 100 percent AMI for only 90 days, and then at the same prices for those between 100 and 120 percent AMI for 90 days. If there are still affordable homes at the end of the second period, Nekota said, they would be released for sale to general-market homebuyers, again at the same prices.
Anderson asked that Horton-Schuler increase the "hold" or sales period to 120 days, and Nekota said the developer would agree to that.
"What we’ve asked for is to be able to build the units … but after certain periods of time, if we can’t find qualified buyers, that we be able to move up," Nekota said. "We hold the house for 120 days, and if we can’t find a qualified buyer who could qualify for a mortgage (and) who meets the city’s guidelines, that we could then keep the price the same but then move it up to the next category of affordable buyers."
Nekota said the developer wants the time requirements because it doesn’t want to hold onto developed unsold units, each of which could generate $30,000 in carrying costs.
"The main purpose of the provision in the proposed unilateral agreement is to provide an opportunity to sell a unit at the same price to those outside of the income restrictions set by the city once we have exhausted all options for 240 days with those buyers who would qualify up to 120 percent of median income," Nekota said after the meeting.
He noted that both Maui and Hawaii counties are proposing such time restrictions as part of their affordable-housing strategies.
Taking the 120-140 AMI homebuyers out of the affordable-housing category was among the key points in a draft plan to update the city’s affordable-housing policy that the Caldwell administration released in September.
Menor and colleagues Trevor Ozawa and Ann Kobayashi voiced frustration that Mayor Kirk Caldwell has yet to submit to the Council a final draft of the revised policy.
Ozawa said he wants to know whether the affordable-housing formulas being considered for Hoopili are in line with what the mayor wants.
"He really should be here testifying or providing some kind of document to us, giving us an opinion of where he’s going with this strategy," Ozawa said. "This is the biggest opportunity for our city to get housing that we need. We really need this project to be done correctly, and that’s why there’s … so much attention being drawn to it."
Planning and Permitting Director George Atta told the committee that administration officials are still working on a plan that he, personally, had hoped would be completed by January. Atta said he’s now hoping it can be finished in July. "We’re not done yet," he said.
Atta said, however, there would likely be no change to the original draft, which calls for eliminating the 120-140 AMI purchasers from being eligible for affordable housing.
But Menor said there are other unresolved issues, such as requiring developers to build rental housing and how long such units would be kept affordable.
"It seems to me that if the affordable-housing issue is a top priority for this administration that the proposed changes would have been finalized by now," Menor said.
"I share your frustration," Atta said. "(The goal) would have been to have a finished policy before Hoopili, and that was our intention to try to get there, but we haven’t."
If a final draft isn’t submitted to the Council until July, it’s likely the new guidelines won’t be law until after the Hoopili rezoning process is completed.
"I don’t think that the administration would ask that things retroactively apply," Atta said.
As was the case at previous meetings, a slew of project supporters argued that it will bring badly needed homes and jobs to the fast-growing region while opponents countered that it takes away prime farmlands and would severely worsen an already bad traffic mess.
Kona Purdy, who grew up in Ewa Beach, said he’s tired of seeing younger people he works with move away from Hawaii to find their futures.
"Hoopili is an opportunity for us to stay in Hawaii, for us to live and work and play in our community, and it’s being planned in the pono way."
Ewa Elementary School fourth-grader Brandon Ikaika Young said he’s troubled by the notion that buildings are being developed on prime agricultural soil that now produces food he eats. "We can’t eat concrete," he said.
In a new wrinkle, several project supporters said they like that Horton-Schuler announced last week that it will donate 5 acres to the Hawaiian Humane Society for a second campus in West Oahu. Supporters said an animal shelter is badly needed in the region.
