Housing crunch
tops priorities

Neighbor island officials are
united in initiatives to help
residents afford homes

KAILUA-KONA » Gov. Linda Lingle called it "the issue that brought us together" in her State of the State address last month. The Legislature responded by introducing fistfuls of bills. Big Island Mayor Harry Kim identified it as a top priority three years ago, and county leaders on the neighbor islands are using the word "crisis."

"Affordable housing is always an issue," said Edwin Taira, Hawaii County housing administrator. "It just depends on how high (a priority) it is. And right now it's very high."

On Kauai and the Big Island, the median price of single-family homes has jumped more than 50 percent in the last year -- to $575,000 on Kauai and $352,750 on the Big Island. Oahu's median price is more than $500,000, and Maui's tops $600,000.

In June the Kauai County Council termed the Garden Isle's housing crunch a crisis, urging developers to build more housing for residents and resort employees and provide more land for construction.

The Big Island mayor also is looking to the private sector for help with this "major, major problem."

"They are my only hope," Kim said.

Pete Hoffmann, a Hawaii County councilman and chairman of the County Housing Agency, said he is determined to finding affordable solutions for the Big Island, defined by the county as homes costing $214,000 for a family of four with an annual income of $51,000.

Hoffmann, who noted that he could not afford today the Waikoloa home he bought eight years ago, said it is the only issue on which he wants regular progress reports from his constituents.

The Hawaii County Council tightened its affordable-housing policy last month, doubling to 20 percent the amount of units a developer must build at an affordable or lower cost.

The new policy also requires that those units be built within 15 miles of the proposed development, and hikes the in-lieu fees -- money paid to the county in lieu of building affordable units -- if a developer chooses not to meet the requirement.

"We have to appeal to developers to develop with a community sense and feel," Taira said.

Already, several projects are in the works to put more homes on the market for middle-class buyers.

The county is leading the way by kick-starting development of 268 acres in Waikoloa that were handed to the county in 1988 by Transcontinental Development Co. to meet the housing requirement of Waikoloa Beach Resort.

A master developer for the new project is to be chosen this month, Taira said, although construction of the 800 to 1,200 affordable units likely will not begin for another year.

At least one company on the Big Island is following the county's lead. Westpro Holdings is set to build factory-assembled steel tract houses on 30 lots at Discovery Harbor near South Point.

Sections of the modular homes will be constructed at a new $2.5 million factory near Honokohau Harbor and trucked overnight 60 miles to the development, said Westpro Holdings President Alan Dickler.

Each three-bedroom, two-bathroom home will be completed in about 60 days and cost $320,000, or about $30,000 less than the median price of a Big Island home and about half the price of the average home.

"We could foresee the problem and are in a unique position to help," Dickler said.

"It's not answering all the questions," Dickler said, noting housing solutions also must address land and infrastructure issues.

"You need cooperation from everybody," from planners to developers, he said.

The company was the first in more than a decade to build lower-cost housing into its project rather than pay the county's in-lieu fees, he said.

Another project, Lohaki Makai between Kailua-Kona and Kona International Airport, includes 19 affordable-housing units. And still another is lined up: 100 low-rise condominiums at the 10-acre Seascape development inland from the airport will sell for about $250,000, about $200,000 less than the average condo price in West Hawaii.