A state board overseeing real estate development rules in Kakaako decided Wednesday to take more time to analyze proposed changes to a long list of
affordable-housing production requirements.
The Hawaii Community Development Authority board agreed to resume
deliberations June 7 at
1:30 p.m. so members and the public have more time to consider and comment on a few additional suggested tweaks presented Wednesday in a report from the agency’s staff.
The changes recommended in the staff report were made in response to comments that residents and business leaders made over the course of three prior public hearings in March and May that followed more than two years of work that included input from the federal Department of Housing and Urban Development, an independent economic consulting firm,
local developers and other stakeholders.
Generally the agency is seeking to make a portion of new homes in Kakaako a little more affordable to residents with moderate incomes and to maintain the affordability of these homes for much longer.
Comments from the public have included a desire for affordable homes to be priced for households with lower incomes than what HCDA is considering. Other comments largely from developers and landowners claim that the proposed
rule changes will choke off production of affordable housing that HCDA desires. Since March, 148 pieces of written testimony have been submitted.
“We received a ton of testimony,” board Chairman John Whalen said after the meeting. “It is a complex set of rules.”
Kakaako is a hotbed of condominium tower construction where special rules differ from city regulations. HCDA has regulated development in the area since 1976 and made numerous amendments to its rules since then.
Current HCDA rules require any project on more than 20,000 square feet of land to set aside 20 percent of the homes built so they are affordable for rent or purchase by residents who earn up to 140 percent of Honolulu’s annual median income, which the agency calculates as $84,900 for one person, $97,000 for two people or $121,250 for a family of four.
This rule would change
so that the 20 percent requirement would kick in
for any project with at least 10 homes. The income limit for buyers would stay the same, but rent or purchase price limits would be reduced. For a two-bedroom home, the average sale price for an affordable unit could be no more than $496,781 under the proposed change. Currently, the maximum price for two-bedroom affordable units can be $606,437.
Other changes being
considered would keep affordable rental rates in place for 30 years instead of 15 years, and give HCDA the right to buy back and resell affordable homes — dubbed “reserved housing” by the agency — if they are resold within 30 years. The 30-year term is one of the recent proposed tweaks. The initial suggestion was to make
the buyback right last in perpetuity. Current rules extinguish HCDA’s buyback rights after two to five years.
A repurchase price would be set by applying annual percentage increases for the median price of all Oahu condo resales to the original market price. HCDA is also proposing to increase its cut of proceeds from resales of reserved housing, or shared equity, which it uses to help produce more affordable housing.
Another tweak suggested by HCDA staff recently would not restrict owners of reserved housing from financing and capitalizing on home improvements they make.
In addition to reserved housing, HCDA has a set of “workforce housing” rules that allow developers to make projects twice as dense if they meet conditions that include making at least 75 percent of homes available to buyers who meet the reserved housing guidelines and don’t use
financial support from county, state or federal government programs.
Proposed changes to workforce housing rules would reduce allowable prices to match the proposal for reserved housing and also impose other restrictions including shared equity and buyback rights that don’t apply now. A
new suggestion added recently would eliminate the restriction on government financial assistance for workforce housing projects to be more consistent with rules the city is trying to adopt for projects outside Kakaako.
