Affordable housing unitsBy Gordon Y.K. Pang
may be made available
to all home buyers
Homes and condominium units designated by the city as "affordable housing" would be available to all home buyers for a two-year period under a bill to go before the City Council.
The Planning Commission yesterday voted unanimously to approve the plan forwarded by Planning Director Jan Sullivan.
At issue are the affordable units that the state and the four counties began requiring of housing developers beginning in the 1980s.
Supporters of the plan say home and condominium prices have dropped to the point that the difference in value between affordable and market units is rapidly diminishing.
For instance, Sullivan's report to the Planning Commission cited a recent study showing the average sales price of a new multifamily unit in 1997 at $200,070, while the market-priced unit was $206,216.
The bill would lift restrictions on who can purchase those designated units. The Council could choose to extend the two-year period.
The plan also calls for the mandatory buyback period for affordable housing units to be reduced from 10 years to three during that period.
Developers testified in favor of the plan, arguing that prospective home buyers who qualify and want to purchase affordable housing units have already done so, leaving a large inventory that can't be sold.
The city estimates that developers have been required to designate up to 4,400 units as affordable housing.
Harvey Goth of Schuler Homes said his company has at least 271 units in Waikele that are designated affordable housing that have not been sold.
A certain amount of those homes are required to go to a family of four earning less than 80 percent of Oahu's median annual income for a family of four -- which is about $58,000.
"The biggest problem is trying to move the 80 percenters," Goth said.
"Buyers do not want to buy "affordable units' encumbered with buyback provisions and shared appreciation provisions when they can presently buy "market units' for the same price or close to it," said Dan Davidson, executive director of the Land Use Research Foundation.
Reducing the buyback restriction may also allow those who purchased within the last 10 years to regain some of their equity, Davidson said.
Sullivan had the bill drafted in response to two resolutions passed by the Council.
A resolution introduced by Councilwoman Rene Mansho called for the city to study the possibility of reducing the length of buyback restrictions. The other, introduced by Councilwoman Donna Mercado Kim, called on the city to temporarily freeze affordable housing requirements.
Councilman Steve Holmes believes throwing out the restrictions for two years will lead to real estate speculation.
Holmes said that developers "should be coming back to the Council to seek changes on a case-by-case basis."