Honolulu Mayor Kirk Caldwell wants to revamp the city’s affordable housing policy to provide more rental spaces and more units that low-income people can afford.

The policy would apply to anyone who wants to build a large residential project on Oahu, a significant expansion of the current affordability requirement that only affects developers who want to rezone land.

Caldwell unveiled his plan Thursday at a press conference at Honolulu Hale along with City Council members Ron Menor, Ikaika Anderson and Breene Harimoto.

The proposal seeks to help people earning less than 80 percent of area median income, or $76,650 for a family of four. A 2011 state housing study found that low-income people comprise 70 percent of Honolulu’s housing need, but Caldwell said “very little” has been done to meet that need.

Kakaako Affordable Housing

Halekauwila Place is the only new development in fast-growing Kakaako considered “affordable” for low-income residents.

PF Bentley/Civil Beat

In the meantime, rents keep rising as wages fall behind. Honolulu now has one of the most expensive housing markets in the nation, with the median home price reaching $700,000 in June.

The city’s current affordable housing policy requires developers who are seeking a zone change to set aside 30 percent of their units for targeted income groups that range as high as 140 percent of the area median income, or $134,140 for a family of four.

But developers who don’t need zone changes can build luxury condos or subdivisions with no regard to affordability.

Caldwell’s proposal would change that by requiring all projects with 10 or more units to abide by new affordable housing quotas, or pay the city a fee, in order to receive a building permit.

Developers would have the option of setting aside 15 percent of units for rental to low-income people; selling 30 percent of the units to moderate-income people earning no more than 120 percent of area median income or building the equivalent of 20 percent of the project in off-site rental units for low-income residents.

The proposed requirements are much stricter than what the state’s Hawaii Community Development Authority mandates in its redevelopment district of Kakaako, where “workforce housing” is defined as housing affordable to people earning 100 to 140 of area median income.

“This is true workforce housing, true affordable housing,” said Caldwell.

The mayor told Civil Beat he thinks this is the first time that the city has ever sought to impose affordable housing requirements at the permitting, rather than the zoning, level.

Caldwell also wants the units to remain affordable for 30-60 years, rather than the current minimum period of 10 years. (HCDA requires for-sale units to remain affordable for just five years.)

It’s “a bold, strong, controversial new proposal,” Caldwell said at the press conference, noting that he will be speaking with stakeholders and working with the City Council to try to improve it. He estimated the proposal would add 4,000 units to the city’s affordable housing stock by 2019.

The draft policy also includes encouraging accessory dwelling units, also known as ohana units, by lifting the requirement that occupants be family members.

Other aspects of the plan involve encouraging micro-units and incentivizing developers to build affordable housing near rail stations.

Policy Called ‘Revolutionary’

Affordable housing advocates praised the plan but raised questions about how it would be implemented.

The details of the proposal weren’t all available Thursday because the city officials were still editing the final draft. One major aspect still hadn’t been decided: Caldwell said the city still didn’t know what kind of fee to charge developers who don’t want to comply with the requirements.

Still, Charles Wathen from the Hawaii Housing Alliance called the policy “revolutionary,” noting that the city has never imposed affordability requirements at the permitting level.

“This is a remarkable policy change,” said Wathen. “This is long overdue. I commend the administration for taking this step.”

But he questioned whether the policy would hold up in court, saying, “There generally needs to be a nexus between affordable housing policies and the benefits and the costs.”

He added that he would prefer to require half of all new affordable housing units to be rentals set aside for people earning 60 to 120 percent of area median income.

Kevin Carney from EAH Housing, which develops low-income rental projects, said he generally likes what he’s seen of the policy and hopes his company can help other developers meet the requirements.

But he noted that whether or not affordable housing gets built comes down to the availability of land and financing.

“Whether they’ll be able to reach the volume they’re looking for, I think that’s a question mark,” Carney said.

Developers are expected to oppose the policy because of its cost.

When Councilman Ron Menor introduced a resolution last year to change the city’s affordable housing requirements to require developers to target low-income people and make homes affordable longer, the measure failed after facing opposition from the construction industry.

The Land Use Research Foundation, which advocates for developers, testified against the resolution, arguing that it would increase the cost of housing and reduce the supply of affordable housing.

The same arguments may be made Friday during a City Council Zoning and Planning Committee hearing on the proposal, especially given that Caldwell’s strategy is significantly more aggressive because it would apply to all housing projects, from luxury subdivisions to high-rise condos.

But at least one developer has come out in support of the project.

Cameron Nekota, a vice president at D. R. Horton Hawaii, said in an email Thursday that the company supports Caldwell’s proposal.

“As a kamaaina company, we remain committed to serving the people of Hawaii by answering the state’s growing need for both affordable and attainable housing,” he said. D.R. Horton is currently seeking rezoning approval for a 11,750-unit project called Hoopili.

Learn more about Caldwell’s proposed housing policy below:

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