Kakaako agency revisits 'affordable'
The HCDA approves spending $100,000 on a consultant to review the guidelines
The state Hawaii Community Development Authority yesterday approved up to $100,000 to pay an outside consultant to update its rules on so-called affordable housing requirements for developers.
The consultant should be on board by early next year and complete the study by summer, according to HCDA's executive director Daniel Dinell.
"We've had a good track record in delivering affordables since the rules were formed," said Dinell. "But we want to do an even better job in the future in terms of making sure Kakaako is a place that can be home to many types of people."
The rules were originally established more than 20 years ago, and though they have been amended about five times, they need to be updated, he said.
Developers and affordable-housing advocates both agree that rules need some revision -- housing advocates say they don't address real housing needs, while developers say they fail to reflect the current housing market.
As the rules stand now, developers seeking to build projects that are higher or denser than currently allowed must set aside 20 percent of the units at an affordable rate or pay a cash equivalent.
A&B Properties, for instance, last month released 63 of its 352 units in its Keola Lai project at below-market prices in exchange for permission to build higher than the parcel's height limit. Priced between $275,000 to $375,000, the 63 units target potential buyers in the "gap group" -- those who make too much to qualify for low-income housing, but are still locked out of the housing market.
Many of the applicants for units are young professionals and young couples looking to buy their first home. At market rate, one-bedroom units at Keola Lai start at $400,000.
Under HCDA guidelines, below-market units must target individuals making 140 percent or less than the median income, as established by U.S. Department of Housing and Urban Development.
For single individuals, A&B is taking applicants who currently do not own a home and make an annual income of $84,688 or less as a single person, or $94,850 or less as a family of two or more.
KC Rainbow Development agreed to set aside 124 two-bedrooms at its new condominium project, Moana Vista, as affordable rentals. The rentals will likely go for between $1,600 to $1,700 a month, said director of operations Allen Leong.
Affordable rentals, under current HCDA guidelines, must target individuals who make exactly the median income.
"We're trying to create a mix of opportunities," said Dinell.
In Kakaako to date, there are a total of 1,388 affordable housing units, in various projects that range from 1133 Waimanu to Kamakee Vista and Kauhale Kakaako.
But affordable housing advocates question the guidelines, saying rental rates and prices are still much too high.
"When they go for the mix, they're mixing to the highest number possible," said Bev Harbin of the Kakaako Improvement Association. "This does not address the near-homeless, or the people who have more than half of their paycheck going to rent."
She said the units set aside for affordables do not target enough of the working class, which makes 80 percent or less of the median income.
"How about the epitome of our workforce," she said. "How about policemen, firemen, schoolteachers?"
Honolulu's elementary schoolteachers, for instance, made an average income of $40,880 last year, according to most recent pay scale study by the U.S. Bureau of Labor Statistics. With that kind of salary, two teachers in Honolulu could make a go at buying a two-bedroom condo at Keola Lai for $360,000. But when the maintenance fees, property taxes and insurance coverage are all tallied, more than a third of their income is going toward housing.
The 63 affordable units at Keola Lai, however, are out of reach for the bulk of individuals making 80 percent or less of the median income.
"The word 'affordable' is a relative term," said Kendall Hirai, director of the Hawaii HomeOwnership Center. "It means different things to different people."
Some developers say the numbers don't pencil out for them when they set aside 20 percent of the units as affordable. Prices vary according to unit size and floor level, but these are not reflected by HUD's guidelines, which are based on income. To compensate, developers either have to price their market-rate units even higher, or absorb the loss, which gives them little to no incentive to build.