The Hawaii Community Development Authority (HCDA) is proposing significant changes that will kill the development of much-needed workforce housing in Kakaako. The proposed rules add more restrictions to who can buy the units and what they can do once they become owners.

801 South St is, to date, the only workforce housing project approved and built in Kakaako under HCDA rules. Over 1,000 units were sold to local buyers, approximately 75 percent of whom made less than 140 percent of the area median income (AMI), the standard HCDA used to determine “affordable.” Well over 80 percent of buyers are owner-occupants. (Note HCDA’s designation of “reserved housing” requires only 20 percent of the units to be “affordable” compared to the 75 percent required for “workforce housing.”)

By proposing drastically changed rules for workforce housing, HCDA is wrongly concluding that 801 South St failed in its mission to provide affordable housing. Discussions with HCDA indicate that the primary reason for this is that some buyers “flipped” their units for “exorbitant” prices thus making the units “unaffordable.”

Here are the facts. Through January 2017, a total of 19 units in Tower A were re-sold. This represents 3 percent of the 635 units in the building. (No units in Tower B have re-sold as Tower B units just closed in January.) Of the 19 units, all except one (on the 44th floor), were re-sold at prices that are below that allowed within the 140 percent AMI threshold. In other words, the units were re-sold, not at “exorbitant” prices, but at prices that are deemed “affordable” using HCDA’s own standards.

The reality is, 801 South St provided 1,000 families with an affordable home. It was a successful project, and this workforce housing model should be emulated. The proposed rule changes would limit owners from ever selling their units for market value, prevent a single person from buying anything larger than a one- bedroom home, and other equally restrictive measures. This in a misguided effort to prevent owners from having the flexibility to make their own real estate decisions.

HCDA’s proposed rule changes will stop future developments like 801 South St. HCDA’s mission is to develop Kakaako and to provide housing for Hawaii’s families. Instead, the HCDA is focusing on a very small number of owners who sold their units and made a profit, even though the prices at which they sold the units were still within the “affordable” range as defined by HCDA. For that transgression, HCDA would effectively stop others from having the chance to own their own affordable home in urban Honolulu.

801 South was built entirely with private funding and no tax breaks. Affordable housing is near the top of everyone’s list of issues that need to be solved. The Legislature is now considering borrowing $2 billion dollars to build affordable housing and rentals. And HCDA is trying to stop another 801 South St from being built. Really?

The better solution is to encourage workforce housing development under existing HCDA rules.

Dale Nishikawa is CEO of Marcus and Associates, Inc., sales agents for 801 South St.