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Honolulu is entering what City Councilmember Tyler Dos Santos-Tam calls a “second wave” of construction for small apartment projects throughout city neighborhoods, a welcome development in the city’s quest to provide more affordable housing.
Last Friday, politicians joined a construction supervisor at a Makiki lot to break ground on the latest project: a 26-unit, three-story walk-up for low-income renters.
Spearheaded by Paul Lam, principal developer of Lam Capital LLC, the project was motivated by Honolulu’s Bill 7, authorizing a pilot program to encourage and speed up construction of affordable rental housing in areas zoned for apartments and mixed use.
Bill 7 expedites planning and permitting while waiving certain fees and providing a property tax break for 10 years, among other incentives. As a result, private developers can build rental units more quickly and profitably.
The goal is to drastically increase Oahu’s inventory of affordable units. Projects brought into the pipeline by Bill 7 and related city efforts to spur building could do just that.
Now, more private landowners and developers must step forward and bring projects into play, with sustained effort and encouragement from the city.
So far, the city reports that 27 affordable housing projects have been OK’d under Bill 7, and five have obtained all permits to proceed to construction.
Lam has plans for additional buildings on Kinau, Pensacola and Alapai streets. With the Makiki project that broke ground last Friday, they will provide nearly 200 affordable units in Honolulu.
Clearly, if hundreds of apartments are incentivized, it will make a marked difference in the availability of affordable housing here.
Bill 7, approved in 2019 and signed by Honolulu’s previous mayor, Kirk Caldwell, is in effect though 2024.
To sweeten incentives further, Mayor Rick Blangiardi last year signed Bill 1, creating a $10 million grant program for affordable rental construction spurred by Bill 7. The grant program also ends in 2024.
The city projects that Bill 1 and Bill 7 will lead to the addition of nearly 1,000 affordable units in town; let’s hope that comes to pass.
Bill 7 is just one of several simultaneous efforts being pursued by city officials to address Oahu’s housing shortage and crisis of homelessness.
Blangiardi will be asking the City Council for an additional $33 million out of federal funding allocated to the city to provide rent and utility assistance in the first three months of 2023. This assistance will shore up families at risk of homelessness, helping to keep them sheltered. Overall, about $310 million is expected to be distributed from city, state and federal funds through 2025.
Another part of the city’s housing strategy is working with owners of dilapidated or vacant homes to refurbish them and get them onto the open rental market.
Blangiardi also said that he hopes the city’s crackdown on illegal vacation rentals and raised taxes on vacant homes will convince unauthorized vacation property owners to rent their units to local residents, with long-term leases.
Finally, in November, the mayor and Gov. Josh Green jointly announced that the city and state would pool resources to provide Oahu housing. This partnership should be expected to truly move the needle on the housing supply, by identifying plots of state land suitable for larger-scale developments and using cooperative methods to streamline construction.
Green also has asked builders to engage with the city and state, and get involved in developing affordable housing. That is an invitation our construction industry must accept. This may well be as good as it gets, with bounteous federal money, supportive administrations and a new legislative session in play.
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