Lawmakers in the Hawaii Senate Housing Committee on Tuesday rejected a core element of a major housing proposal backed by Gov. David Ige and House and Senate leadership that aims to provide affordable housing near the rail line.

The problem is the so-called affordable housing wouldn’t actually be affordable, according to Sen. Stanley Chang, who chairs the committee.

Under Senate Bill 3104, the state would issue 99-year leases for projects that make 50% of units available to households making 140% of the area median income and invest $275 million in housing infrastructure. A family of four making 140% of AMI could afford a home that costs $867,900. The other half of the units would be market rate.

“I will never accept a bill that has 140% of AMI when we’re talking about free state land and free taxpayer-funded infrastructure,” Chang said. “That is a pure giveaway to developers, and it’s completely irresponsible.”

Senate Housing Committee Chair Stanley Chang made major changes to a bill championed by House and Senate leaders and Gov. Ige.

Chang’s committee advanced an amended version of the bill that would require 100% of units to be available to those making 80% of AMI and below.

For families of four making 80% of AMI, an affordable home would be $495,900, according to data from the Hawaii Housing Finance and Development Corporation. For an individual, that would be $347,400.

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The original version of the bill, which is still under consideration in the House as HB2542, received strong support from U.S. Sen. Brian Schatz, the business community and the construction industry.

But it also generated passionate pushback from affordable housing advocates and other groups, including the Office of Hawaiian Affairs.

“The units must be affordable for the 75% of Oahu’s households needing homes who earn less than $75,000 a year,” said Evelyn Aczon Hao, president of the nonprofit Faith Action for Community Equity, in a statement last month.

“A family earning $75,000 a year can afford a home priced at about $400,000.”

In testimony, Hawaiian Community Assets said the bill was pitched to the public as a solution for residents living paycheck to paycheck but that it fails to address that population’s housing needs.

“According to the most recent Hawaii Housing Planning Study, 52% of the housing units we will need by 2025 must be for low-income households earning up to 80% of the HUD area median income (AMI),” the nonprofit wrote in its testimony.

The data shows a surplus of units available for those whose income is 140% of the AMI, while there is a shortfall of thousands of units at 80% AMI and below. The need is especially great for those making 30% of AMI and below, the data shows.

“We should not be designating homes as ‘affordable’ that are built for people earning six-figure incomes,” the IMUAlliance, an anti-sex trafficking group, testified.

In remarks on Tuesday, Chang said it’s in everyone’s interest to address these community concerns now.

“Without winning the hearts and minds of people, development projects can cross their T’s and dot all their I’s and win every lawsuit, but can be held up by the people of Hawaii who sincerely love the community as it stands today and will physically block development with their own bodies,” he said.

Senators Laura Thielen, Dru Mamo Kanuha and Sharon Moriwaki voted in support of the amendments.

“It addresses the concerns in a meaningful way but still allows us to move forward,” Thielen said.

Gavin Thornton, executive director of the Hawaii Appleseed Center for Law and Economic Justice, said Chang’s amendment is a major improvement, but it could benefit from further discussion to ensure the income restriction isn’t too rigid.

“It might also be helpful to have more flexibility that would allow you to have a few units that target higher-income households in exchange for securing deeper affordability that provides housing for lower-income households,” he said.

Chang said the AMI level would be used to price the units, not restrict buyers, so the communities would be “mixed income.”

The bill faces another vote in the Senate Water and Land Committee, chaired by Sen. Kai Kahele, on Wednesday at 1:17 p.m. in conference room 229.

House Finance Chair Sylvia Luke and Rep. Tom Brower, who chairs the House Committee on Housing, were not immediately available to comment on Chang’s amendments.

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