City, de­vel­op­ers must add af­ford­able homes

Honolulu Star-Advertiser - - VIEWS & VOICES -

How city lead­ers han­dle im­me­di­ate hard choices about Oahu’s hous­ing cri­sis will sig­nif­i­cantly shape the is­land’s fu­ture.

Oahu needs some 24,000 af­ford­able hous­ing units to meet pent-up de­mand, but the mar­ket­place is adding only 2,000 to 3,000 units to the sup­ply an­nu­ally, with most priced in the lux­ury bracket. Most of the de­mand — 75 per­cent — is for house­holds earn­ing less than 80 per­cent of area me­dian in­come (AMI). That trans­lates to $80,450 for a fam­ily of four, ac­cord­ing to data cal­cu­lated by the U.S. Depart­ment of Hous­ing and Ur­ban De­vel­op­ment.

Mayor Kirk Cald­well will soon be ask­ing the City Coun­cil, hous­ing de­vel­op­ers and oth­ers to make mo­ment-of-truth de­ci­sions that will af­fect fu­ture gen­er­a­tions. Sev­eral decades in the mak­ing, there is no pain­less fix for our af­ford­able hous­ing prob­lem — but reme­dies need to start now. On Thurs­day, in his fifth State of the City ad­dress, Cald­well out­lined an at­tack strat­egy that will likely be slammed by many de­vel­op­ers as too tough, and by hous­ing ad­vo­cates as too lax. At the very least, the mayor wants to com­mit the city to fa­cil­i­tat­ing ap­proval of 800 af­ford­able units ev­ery year over the next four years. That adds up to a small dent in de­mand, but could help Oahu pivot away from a fu­ture in which the is­land morphs into a sort of gated com­mu­nity, af­ford­able only to the wealthy.

Key to the mayor’s lat­est af­ford­able hous­ing pitch is a mix of re­vised city reg­u­la­tions and com­mit­ments paired with a fresh stack of in­cen­tives for the de­vel­op­ment com­mu­nity.

The ad­min­is­tra­tion and the Coun­cil must now work in tan­dem, push­ing aside any im­pulse for po­lit­i­cal in-fight­ing as the need for a much larger in­ven­tory of rea­son­ably priced homes is ur­gent, re­flected, in part, by our on­go­ing prob­lems re­lated to home­less­ness. Cur­rently, Oahu’s af­ford­able hous­ing re­quire­ments come into play only through re­quests for zon­ing changes linked to build­ing heights and den­sity. Cald­well wants changes so that at the build­ing-per­mit stage ev­ery green­lighted large hous­ing pro­ject — re­gard­less of zon­ing sta­tus — will be on the hook to build a cer­tain num­ber of for-sale homes or rentals re­served for mod­er­ate- and low-in­come house­holds. De­vel­op­ers would build af­ford­able hous­ing on-site, off-site or opt for an in-lieu pay­ment or land ded­i­ca­tion. The in-lieu op­tion should be lim­ited to rare cases, how­ever. If not, many de­vel­op­ers mo­ti­vated by pos­si­ble quick profit would sim­ply pay a fee based on $45 per square­foot of would-be af­ford­able hous­ing and con­tinue to build only for the high-in­come bracket. That, in turn, could wedge city gov­ern­ment into the busi­ness of con­struct­ing af­ford­able hous­ing, a pur­suit it’s ille­quipped to take on.

Among the in­cen­tives tai­lored to en­tice pri­vate-sec­tor de­vel­op­ers to ac­tu­ally build af­ford­able hous­ing: waivers for fees rang­ing from sewer hookup to park ded­i­ca­tion; launch of “concierge as­sign­ments” to fast­track ap­pli­ca­tions through the per­mit process; and var­i­ous other tax waivers tied to con­struc­tion and rental prop­er­ties. The riski­est lure may be a plan to cre­ate a fi­nanc­ing pro­gram with more than $100 mil­lion an­nu­ally in pri­vate ac­tiv­ity bonds for de­vel­op­ers to bor­row money at re­duced in­ter­est rates. Should a de­vel­oper fail, the city could be left pick­ing up pay­ment. Also, the Cald­well ad­min­is­tra­tion wants to lease var­i­ous chunks of city-owned land to de­vel­op­ers who agree to build af­ford­able hous­ing on them. Some of the sites are al­ready slated for tran­sit-ori­ented de­vel­op­ment (TOD) linked to the city’s multi­bil­lion-dol­lar rail pro­ject. Rail-side de­vel­op­ment presents a golden op­por­tu­nity for the city to in­sist upon af­ford­able hous­ing near some tran­sit sta­tions along the pro­posed 20-mile line. City lead­ers need to scru­ti­nize each el­e­ment of the mayor’s pro­posed strat­egy and ham­mer out an ac­tion plan bal­anc­ing cal­cu­lated risk with safe­guards. Risk is un­avoid­able as most de­vel­op­ers can­not be counted on to vol­un­tar­ily help the city solve this prob­lem. But it will take in­cen­tives and shared risks to change the alarm­ing tra­jec­to­ries of hous­ing de­mand and home­less­ness. With costs steadily ris­ing and lift­ing homes out of reach for a large swath of the is­land’s peo­ple, time is of the essence.

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