Building affordable housing shouldn’t be optional

THE ISSUE A bill proposes to increase affordable housing percentages for development in Kakaako and remove the option to buy out of the requirement.

Affordable housing remains an intractable issue across the state even as home prices level off and the market adjusts to current economic conditions.

Government attempts to help by requiring a certain number of lower-cost units be included when new projects go up, but because developers are given the option to buy out of the requirement, the number of affordable homes is slow to grow.

A bill making its way through the state Legislature would direct the Hawaii Community Development Authority to close off that option for high-rises in Kakaako that seek increased density or heights. In addition, it would increase the mandatory percentage of affordable units from 20 percent to 25 percent upon passage, rising to 35 percent in the year 2018.

Though well meaning, the measure would not only attach the requirement to residential and resort projects but to commercial and industrial development as well. It may be that lawmakers envision mixed-use structures as a way to alleviate the shortage because models for development can accommodate both homes and businesses. Still, figuring a percentage of units for housing in commercial settings would be complicated.

The bill predictably has little support among developers and large landowners, which makes its approval unlikely, but others who have spoken in favor of it point to the authority's goal of having 75 percent of the 19,000 units targeted for Kakaako be affordable. At present, fewer than 2,000 units fit the bill and though more are scheduled to come on line soon, nearly half of the district's land already has been developed.

Moreover, affordable is in the eye of the mortgage holder. Affordable means a unit that a family earning no more than 140 percent of the median income at the time of the sale can buy, but in luxury buildings, owner association fees that can run into hundreds if not thousands of dollars puts a so-called affordable home out of reach.

The bill would allow builders that exceed the minimum percentage to transfer the surplus to another one of their projects or sell it to another developer. It would exempt projects of less than an acre from the requirement.

Supporters contend that for Kakaako to achieve a balance of income levels, more workforce housing, including affordable rentals, should be built and that enough projects have been aimed at wealthy buyers. The opposition argues that applying the higher standard to Kakaako alone would discourage investors from building there.

That argument has validity. What lawmakers should consider then is to hold percentages steady and instead make the requirement unequivocal as well as discounting accompanying fees for those units.