Many political candidates made statements about affordable housing leading up to Hawaii’s primary election last month.
For example:
>> Hawaii’s housing crisis has reached a state of emergency.
>> Past efforts by state and county governments to deal with the affordable rental crisis have been waning. Simply put, something must be done, something big.
>> We must prioritize selling affordable homes to local families and residents.
Yet for the governor, mayors, legislators and county council members after the Nov. 8 general election, moving the needle on an issue that has been a chronic problem for decades likely will be more than difficult and hard to measure.
Revolutionary or disruptive ideas often don’t fly, and trying to do more within the existing system is fraught with obstacles including community opposition, land use regulations, environmental pitfalls, permitting delays and complicated financing.
“The story hasn’t changed for 25 years,” said Craig Watase, president of local affordable-housing development firm Mark Development Inc.
Watase has heard plenty of recent and past aspirations from political candidates, but is resigned that no one has or can assemble the political will needed to make major improvements in the production of local affordable housing.
Ricky Cassiday, a local housing market analyst, holds the same view.
“This is not a political problem,” he said. “It’s a market problem.”
Cassiday said too much bureaucracy and too many restrictions exist over affordable-housing development to deliver enough homes to satisfy demand, and that individual candidates elected to any office can’t decree a solution.
“That’s just the nature of the beast,” he said.
New old plans
Former Lt. Gov. James “Duke” Aiona, who won the Republican primary election for governor, said on the Honolulu Star-Advertiser’s “Spotlight Hawaii” webcast program in July that as governor he would reduce regulations for affordable-housing production, including leaving land use decisions to counties by getting rid of the state Land Use Commission.
Abolishing the LUC is up to the Legislature, and has been contemplated by lawmakers for decades. The idea even was a campaign point for former Maui Mayor Linda Lingle in her bid to become governor in 2002. She held the office with Aiona as her lieutenant for two terms until 2010.
Aiona’s Democratic challenger, Lt. Gov. Josh Green, has promoted a 10-point “emergency plan” to address affordable-housing needs, which includes lofty goals of having county governments reduce the time and cost for building such homes.
Green’s plan also lists strategies that have been done before, including more funding, use of vacant state land and producing villages of so-called tiny homes.
That last item, sometimes referred to as kauhale villages, was something Green announced in 2019. However, state lawmakers in 2020 shot down a $20 million funding bill to produce six to eight tiny-home villages that Green said could rapidly house 1,000 of Hawaii’s most chronically homeless at a relatively small cost of around $25,000 per home.
State Rep. Joy San Buenaventura, chair of the House Committee on Human Services and Homelessness, was cool to the bill, which she said would basically make Green the “homeless czar” for the villages.
Ultimately one kauhale was built in Kalaeloa. The project, Kamaoku Kauhale, opened last year after three years of work supported by Green along with the nonprofit HomeAid Hawaii and the Hawaii Public Housing Authority. It includes 36 tiny homes operated by the nonprofit organization U.S. Vets on city land.
New old projects
It is a harsh reality that developing affordable housing in Hawaii can require numerous partners and take more than several years excluding construction, which sometimes results in government leaders taking or receiving at least partial credit for projects that began under predecessors.
Last month, city officials announced funding for six affordable-housing projects representing what Honolulu Mayor Rick Blangiardi described as the “start of a new beginning for our city.”
The city Department of Community Services awarded $28 million to the six projects planned for a combined 972 homes, and the agency’s director, Anton Krucky, said all six would be done within five years compared with nine years for past projects that received such city grants.
“From Day One of this administration, our team has emphasized the need to create affordable housing for the residents of Honolulu,” Blangiardi said in a statement announcing the grant awards.
Krucky did note that the six projects are on a shorter development timetable partly because the city decided to award grants to projects in later stages of development instead of earlier phases as had been done in the past.
Some of the six projects even began before Blangiardi beat Keith Amemiya in the 2020 election in which both mayoral candidates touted affordable-housing plans.
For instance, a project called Halewiliko Highlands in Aiea stems from a city request for proposals issued in 2018 under then-Mayor Kirk Caldwell. Nonprofit developer EAH Housing was selected and signed a development agreement with the city in 2019.
The 140-unit project also secured about $48 million in financing last year from the Hawaii Housing Finance and Development Corp., a state agency that helps finance affordable housing. The city’s grant is for $6 million. Construction was previously expected to start last year, but is now expected to start next year.
Another one of the six projects, Ohana Hale, dates back nearly a decade and was initially planned as a 180-unit condominium tower in the McCully area reserved for middle-income buyers.
Ohana Hale’s developer, Franco Mola of MJF Development Corp., anticipated in 2014 that construction could begin a year later and be finished by 2017. The Honolulu City Council granted key approvals in 2015 for what was then a $58 million project, but Mola’s plan was upset by financial and sales difficulties.
Initially, Mola was set back by financing delays. Then presales that began in 2018 got derailed by the coronavirus pandemic two years ago, which in turn led to more financial difficulties.
In February, HHFDC approved conversion of the project to rental apartments for households with low to moderate incomes, and is being asked to provide nearly all financing for what is now a $108 million project. The city’s grant is for $4.9 million.
Mola earlier this year estimated that he can begin construction next year and finish the tower in 2025.
Busts and booms
Cassiday said eight years remains a rough standard for how long it takes to develop large-scale affordable-housing projects in Hawaii, though some also fail.
For instance, two years ago the Hawaii Public Housing Authority canceled six years of work to have private developer Hunt Cos. transform the state’s 364-unit Mayor Wright Homes low-income rental housing community in Kalihi into a high-rise complex with 2,500 homes mostly for households with low and moderate incomes.
In Kailua two years ago, a developer couldn’t convince the City Council to approve a zoning exemption for a four-story project with 73 units where monthly rent was projected to be as low as $521, because of the project’s location on the edge of a single-family neighborhood bordering part of the town’s business district.
Many Kailua residents opposed the project called Kawainui Street Apartments, and the Council voted 8-0 to kill the plan.
Ikaika Anderson, who then represented Kailua on the Council, said at the time that he liked the project but wanted to respect the position expressed by many of his constituents.
As a candidate who finished second in the Aug. 13 primary election among Democrats seeking to become lieutenant governor, Anderson said he would build more kauhale across the state, and noted his support for one such project called Hui Mahi‘ai ‘Aina, which was established in Waimanalo two years ago with a mix of tiny homes and tents by community members and volunteers on state land without government approval.
Probably the most effective entity at helping produce affordable housing in Hawaii is HHFDC, which typically provides tax credits, bonds and low-interest loans to finance projects for private developers building low-income housing that can get conceived during one administration and delivered under another.
HHFDC, governed by a nine-member board, is a big reason Gov. David Ige has claimed that his administration met its initial goal of producing 10,000 affordable homes by 2020, with 3,500 more on the way.
State lawmakers gave the agency’s rental housing loan fund a record $200 million contribution in 2018, a big boost over annual appropriations between $25 million and $50 million in recent years. Earlier this year, the Legislature appropriated $300 million for the agency’s loan fund, which is expected to help build 1,938 new units and rehabilitate 800 existing apartments for households with low to moderate incomes.
Green in his bid to be governor made continued increases to HHFDC’s rental housing loan fund part of his 10-point plan.
“We will partner with developers across the state to build tens of thousands of new units of affordable housing, which will in turn create new jobs, build our communities, and grow our economy,” his plan proclaims.
Green’s plan also states, “Our housing crisis will likely continue to be the most challenging issue we face in the coming years.”
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