Affordable-home sizes getting squeezed

Affordable housing: Like all Hawaii real estate, it’s gotten more expensive. It’s also getting incredibly smaller.

Imagine a room 20 by 15 feet. That’s 300 square feet, or the size of some studios recently built in Honolulu, and even tinier abodes are coming.

Such homes — sometimes called micro-units — are on a leading edge of a trend that local residents with middle and lower incomes are likely to see, which is raising concerns and forcing people to change the way they live.

Lila Moore, a retired public school teacher, moved into a new, roughly 300-square-foot affordable studio rental in Kakaako recently and is grateful. But she also was shocked at the apartment’s size.

“At this stage of my life, I don’t need a lot, but I admit I cried when I first saw how small it was,” she said.

Moore and her dog, Mojito, live simply now with a small flat-screen TV and a short stool at a miniature dining table. A sort of chaise lounge that serves as a bed but also folds into a chair fits into a 73-inch space between her refrigerator and the apartment’s exterior wall.

“You just have to be creative about furniture,” she said. “Thank God that I can still afford to live in Honolulu.”

Smaller homes are being produced by developers that need to make a certain percentage of housing in high-density projects affordable to moderate-income residents under city and state regulations.

These regulations try to keep developers from skimping on their obligation by giving only partial credit for units with fewer bedrooms and bathrooms. But the rules don’t address a home’s overall size, so a 400-square-foot unit with one bedroom can count for more than a studio of the same size.

Current city rules also specify that the number of bedrooms in affordable homes shall be similar to, or greater than, the associated market units. But that rule is being tested by the developer of a high-rise called ProsPac Tower proposed on Keeaumoku Street mauka of a Walgreens store.

ProsPac’s developer wants to deliver 78 affordable rentals as nearly all studios containing 248 to 467 square feet of living space while nearly all market units are bigger.

Specifically, half of the tower’s market units feature two bedrooms. Another 37 percent contain one bedroom. Only 9 percent, or 32 market units, are studios, and another 16 feature three bedrooms. In contrast, the affordable units comprise 72 studios plus six one-bedroom units that were converted from studios without changing their size, according to a city Department of Planning and Permitting report.

Kamana‘opono Crabbe, CEO of the state Office of Hawaiian Affairs, said in written testimony to the City Council last month that a “more meaningful” affordable-housing contribution may be needed for ProsPac’s project given unit sizes and allowable rental rates.

Crabbe said rental rates for the affordable studios averaging about 300 square feet would be close to the average cost in the nation’s most expensive housing market, New York City, based on square footage, or $4.82 at ProsPac compared with $4.98 in New York.

“Accordingly, to better ensure more meaningful affordable housing opportunities, the (City Council) may wish to take the allowed per-square-foot rental rate into account when evaluating the maximum (income limit for renters) and/or the potential inclusion of minimum unit size/mixed housing type requirements for the project’s ‘affordable’ units,” he said.

The developer, ProsPac Holdings Group, contends that it is providing more affordable housing than what DPP seeks for towers near rail stations under a trade-off for tower height and density bonuses.

ProsPac Holdings said its proposed 78 affordable rentals represent 18 percent of the tower’s 429 units. DPP seeks 15 percent. However, DPP rules give less credit for smaller units and extra credit for larger units. Full credit is based on a two-bedroom, 1-1/2-bathroom residence. So a developer obligated to produce 100 affordable homes could build 132 studios or 72 three-bedroom, two-bathroom homes to satisfy the requirement.

Applying DPP’s discount for studios, ProsPac’s affordable-housing contribution is actually 16 percent because one studio counts for 0.86 of an affordable unit.

If the equation was based on square feet of living space, the developer’s affordable-housing contribution would be 8 percent.

In response to ProsPac’s permit application, DPP noted in a report that the developer’s plan doesn’t meet the comparable bedroom standard and that the city’s affordable-housing rules need amending.

“The proposal limits the type of households who will benefit from affordable housing to singles and couples, and (do) not include larger families,” DPP’s report said. “The DPP understands that higher standards for affordable housing is needed.”

Victor Geminiani, co-director of the Hawaii Appleseed Center for Law and Economic Justice, said the percentage of affordable housing required should be based on the total floor area of all residences, not by bedroom count, or ridiculous results such as 150-square-foot affordable studios could result.

Outside the city’s jurisdiction, in Kakaako, state rules are also allowing developers to produce tiny affordable homes.

Last year the affordable rental midrise Keauhou Lane, developed by Oregon-based Gerding Edlen and Kamehameha Schools, opened with studios ranging from 298 to 350 square feet, one-bedroom units with 451 square feet and two-bedroom units with 632 to 745 square feet. This is where Moore lives.

By comparison, the affordable Kakaako condo 1133 Waimanu opened in 1996 with one- and two-bedroom units ranging from 534 to 751 square feet in connection with market towers Nauru, Hawaiki and Koolani.

The latest planned tower in Kakaako, ‘A‘ali‘i at Ward Village, will feature 150 condominiums for moderate-income residents. These units will include 60 studios with 277 square feet of living space and 90 one-bedroom units ranging from 430 to 580 square feet.

Market-priced units in the 741-unit tower will include 30 studios the same size as the affordable units and another roughly 190 studios from about 350 to 375 square feet. The rest are one- and two-bedroom units.

The Hawaii Community Development Authority, a state agency regulating development in Kakaako, has a similar rule to DPP’s that gives less credit for affordable homes with fewer bedrooms and extra credit for units with more bedrooms. HCDA also has no rule pertaining to the size of affordable homes.

As part of HCDA’s approval for ‘A‘ali‘i, the tower’s developer, Howard Hughes Corp., is required to provide affordable homes that contain a “similarly representative mix of market-priced units planned for all projects within the Ward (Village) area.”

Ward Village covers 60 acres slated for up to 4,300 homes. Hughes Corp. has about 40 percent of that built or under construction.

HCDA broadly requires that 20 percent of all homes in new towers be affordable to moderate-income residents, and allows developers to spread these out between different projects in master plans.

As for Prospac Tower, a City Council committee passed a resolution last month to approve the project. A final decision has not yet been made.