Housing progress needs to speed up

In a market with some of the most expensive for-sale homes nationwide, more than 40 percent of Hawaii’s households are renters. And due in part to a persistent shortage of housing, average rental rates are pricey and beyond the reach of many seeking so-called affordable housing.

The pent-up demand for housing on Oahu is being addressed by a marketplace that’s adding 2,000 to 3,000 housing units to the supply annually, with most priced in the luxury bracket. But three-quarters of the demand clamor is coming from households earning less than 80 percent of area median income (AMI). That translates to $80,450 for a family of four, according to the U.S. Department of Housing and Urban Development (HUD).

Much of our affordable-housing focus envisions construction of new inventory — now proceeding at a snail’s pace. So, it’s refreshing to see recent successes with makeovers that preserve existing inventory. In the case of River Pauahi, a 38-year-old four-story building on the edge of Chinatown, a new contract with HUD is providing Section 8 vouchers that ensure tenants will pay no more than 30 percent of their income for housing.

Last week, the local development firm Ahe Group celebrated completion of a three-year effort to acquire and renovate River Pauahi, which had been in disrepair. Ahe and a partner bought the building in December and amended the land lease with the city to keep rental rates affordable for low-income residents for the next six decades.

Also, Honolulu Hale just marked the first anniversary of two housing projects — one in Waianae and one on Beretania Street, across from Central Union Church — that provide permanent housing for families that have grappled with homelessness. In both cases, apartments in the city’s newly purchased buildings are tailored for working families earning 50 percent or less of AMI — that’s $50,250 for a family of four.

Housing is considered “affordable” when a household spends less than 30 percent of its income on shelter and utilities. In Hawaii, it’s estimated that more than one-third of all households are paying rents that exceed that threshold.

Moreover, Hawaii ranks No. 1 in the nation for having the widest gap between wages and the price of rental housing, according to the National Low Income Housing Coalition’s annual report. The report is based on a “housing wage,” an estimate of the hourly wage that a full-time worker must earn to afford a modest and safe rental at the 30-percent threshold.

In 2016, the national housing wage was $20.30 for a two-bedroom rental unit, based on a yearlong 40-hour work week, according to the report. In Hawaii, the housing wage was $34.22 for such a rental. Clearly, such disparity is contributing to homelessness. Oahu’s count of nearly 5,000 homeless people is the highest per capita homeless rate in the nation.

In an ostensible effort to confront the problem, the Legislature in 2016 passed Act 127, which set a goal of developing at least 22,500 affordable rental units by 2026. The legislation noted: “Without sufficient affordable rental housing, the future social, community and economic consequences for Hawaii may be dire.”

But when some lawmakers rightly tried to follow up that warning this year with ambitious funding — one called for $2 billion for housing development — efforts fizzled. Instead, funding was tagged to support a mere 400 new rental units, according to affordable housing advocates. A drop in the bucket.

Hawaii’s affordable housing problem is a complicated mix of money, politics and regulations. As state and city leaders and others continue to expand the rental supply with new units, they must also take care to include maintaining existing inventory in the solution.

Makani Maeva, Ahe president and CEO, said: “We talk about building new housing and there being an affordable-housing shortage, but at the same time if we let assets deteriorate or let them go to market (price), we’re losing housing.” She’s right, of course. We need to build, but we also cannot let what we have crumble or easily exit the affordable housing inventory.