- Special Projects
Honolulu’s affordable housing policy requires that any developer seeking approval for a zone change set aside 30 percent of their units for people earning moderate incomes or less.
Thirty percent may sound like a lot, but in fiscal year 2014, only 33 units were produced under that policy, known as inclusionary zoning.
That’s according to the city Department of Planning and Permitting, which crunched the numbers this week to figure out how many “affordable” units were produced in Honolulu between fiscal years 2011 and 2014.
The numbers include units produced under agreements with developers who have received zone changes, known as unilateral agreements. They also include self-reported numbers from developers of all other units that were built in Honolulu targeted to low- and moderate-income residents.
Most of them are units that are affordable to people earning 120 percent of area median income or below — in 2014, that was $114,980 for a family of four.
Others are aimed at families earning as much as 140 percent of area median income or as low as 80 percent of area median income, said city Department of Planning and Permitting spokesman Curtis Lum.
Lum said the agency didn’t yet have numbers from fiscal year 2015, which ended in June this year. He explained the numbers are different from figures provided last December because of updated information provided by developers.
In total, there were nearly 800 “affordable” units built in fiscal year 2014, more than in any of the previous three years.
But the fact that only 33 units were produced through unilateral agreements in fiscal year 2014 illustrates the ineffectiveness of Honolulu’s existing affordable housing policy.
Mayor Kirk Caldwell is expected to roll out his final Oahu housing strategy this month which would require more developers to build low- to moderate-income housing.
According Harrison Rue, who is managing the city’s development around rail, the policy will require developers who are building 10 or more units to set aside a certain percentage for affordable rental or for-sale housing.
Imposing such a policy would affect far more developers than the current rules. Rue said the policy that will be presented this month is similar to the draft version released a year ago, but the mayor has lowered the percentage of units he plans to ask developers to set aside. (Click here to read more about what to expect from the policy this month.)
But even after Caldwell finalizes his proposed changes to the affordable housing requirements, it may be an uphill battle to get the strategy approved by the City Council.
Gladys Morone, who leads the Building Industry Association of Hawaii, said that requiring developers to set aside a certain number of units as “affordable” forces them to subsidize those costs by driving up the prices of the market units. That creates a gap in the supply for moderately priced units.
“Nothing’s for free,” she said, citing a report by the University of Hawaii Economic Research Organization criticizing the effectiveness of inclusionary zoning policies. “Somebody is going to have to pay for that and it’s probably the new homebuyer.”
She said she wants the mayor’s policy to be successful, but is concerned that the proposal will simply tweak the current rules rather than actually create more housing.
There may also be legal issues with extending the inclusionary zoning requirements to developers of all large housing projects, according to David Callies, a law professor at the University of Hawaii.
“It’s essentially a developer tax and the city has no authority to levy such a tax,” he said.
Similar rules have been contested elsewhere, with the California Supreme Court ruling in favor of inclusionary zoning rules this year and developers in Chicago filing a lawsuit against similar policies in August.
But there are many housing advocates who were supportive of the mayor’s proposed housing strategy, including Councilman Ron Menor.
Menor said the fact that only 33 units were produced in 2014 under the city’s existing inclusionary zoning rules illustrates his long-held belief that Honolulu’s affordable housing policies are inadequate.
He thinks Caldwell’s draft housing strategy was a step in the right direction in part because of its emphasis on providing low-income rentals.
“We have an affordable housing crisis and it largely involves the dire need for more affordable rentals in this island,” he said. “Unless the city requires that a significant percentage of units that are developed be set aside as affordable rentals, the private market will not build enough units to address the need for low-income rentals on this island.”