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With Hawaii's economic boom having passed nearly a decade ago, the Cayetano administration wants to remove the affordable housing/market price ratio placed on three unfinished state master-planned communities at Kapolei, Leialii, Maui, and Laiopua, Hawaii. Price ratio on
planned housing no longer
viable, governor saysBy Pat Omandam
Star-Bulletin
The affordable-housing requirement, which put many low-to moderate-income families in homes priced out of their financial reach during the "bubble" years of the economy in the late 1980s and early 1990s, now serves as a deterrent to new construction because the average prices of homes has dropped since then, said Ronald S. Lim, the governor's special assistant on housing.
"The HCDCH is not abandoning affordable housing," Lim told state senators yesterday. "Rather, we are seeking to amend the housing conditions to facilitate the development of housing."
Lim said developers who must comply with the 60 percent affordable housing at these projects, based on current market prices, can't generate enough money with the 40 percent market units to underwrite the affordable units and won't take on the development.
"It doesn't work in today's market," he said.
The Housing and Community Development Corp. of Hawaii wants the state Legislature to waive the affordable housing requirement and allow it to work directly with the counties to set affordable housing requirements. The counties are interested, Lim said.
Last year, the agency asked the state Land Use Commission to amend the 60 percent ratio for the three master-planned communities, but the commission questioned whether it had the authority. The state attorney general's office later ruled the commission had no jurisdiction to amend the ratio because the 1988 law, Act 15, had expired.
Sharyn L. Miyashiro, acting executive director of the housing agency, said allowing the agency to work with the counties to set affordable housing requirements would spur development of housing, particularly in Kapolei.
Miyashiro, in written testimony, said the present prices of the market units are insufficient to subsidize the affordable units, making Kapolei, Leialii and Laiopua no longer feasible to develop.
The shortage of affordable housing in the 1980s prompted the Waihee administration to develop the communities by selling large parcels to developers who had to comply with the affordable-housing requirements.
Today, the Villages of Kapolei is about two-thirds complete with about 2,500 homes, while the two other villages remain largely undeveloped because of legal challenges to the state's proposed sale of ceded lands at the sites.
Lim said one of the biggest challenges facing the real estate market will be the lack of available inventory due to low construction during the 1990s and surging home sales during the past few years.
A Senate bill that would allow the ratio to be waived for the undeveloped parcels of the projects is now before the Senate Ways and Means Committee. A joint Senate panel approved the measure yesterday.
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