HCDA considers Kakaako affordable-housing rule changes

A state board overseeing development in Kakaako is one step closer to overhauling its affordable-housing production requirements after a hearing Wednesday.

The board of directors for the Hawaii Community Development Authority received an overview of a second draft of proposed rule amendments crafted by the agency’s staff.

Though the proposed changes have been contentious, there was hardly any new public testimony presented following a previous public hearing in June that was the fifth public hearing on the issue since March.

Total testimony sent to HCDA includes 147 pages of written comments that include residents telling the agency that its proposed reduction in prices for affordable homes isn’t big enough, and developers saying more restrictions will result in less affordable housing being built.

Generally, HCDA aims to make more new homes in Kakaako a little more affordable to residents with moderate incomes and to maintain the affordability of these homes for much longer.

One of the biggest changes proposed would keep rents at affordable apartment projects in place for 30 years instead of 15 years.

Another big change would give HCDA the right to buy back and resell affordable for-sale homes at prescribed prices, which provide some profit to the seller, if they are resold within 30 years. The current requirement allows HCDA to repurchase a unit only if the initial owner sells within two to five years, depending on the project.

Prices of affordable housing in Kakaako also would be tweaked by the proposed change. HCDA rules require that developers reserve 20 percent of new homes in large projects for residents who earn no more than 140 percent of Honolulu’s annual median income, which the agency calculates as $84,900 for one person, $97,000 for two people and $121,250 for a family of four.

The proposal would keep this income limit in place for buyers and renters, but related purchase prices or rents would be reduced to be affordable for households earning up to 120 percent of the median income.

At the 120 percent level, a home could be sold for about $430,000 to a single person, $495,000 to a couple or $610,000 for a family of four. The 140 percent level translates to sale prices at about $505,000 for a single person, $580,000 for a couple or $720,000 for a family of four.

HCDA has been working on overhauling its affordable-housing rules for two years, and its board had been expected to make a decision in June. But several new suggestions by staff, which were made in response to public comments, triggered a requirement to hold two additional public hearings on the rule change.

The 36-page draft under consideration by HCDA’s board is available online.

The board anticipates making a decision at a Sept. 6 meeting slated to start at 1 p.m. Public testimony will be accepted at that meeting in the agency’s conference room at 547 Queen St.