Hawaii Could Lose More Affordable Units Than It's Possible To Replace - Honolulu Civil Beat

About the Author

Charles P. Wathen

Charles P. Wathen is with the Hawaii Housing Alliance.

Affordable housing is divided in two groups by tenure for sale or for rent.

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Not including for sale units, the affordable housing rental stock includes units owned by the Public Housing Authority, units developed with financing by the Department of Housing and Urban Development, the Hawaii Housing Finance and Development Corporation’s low-income housing tax credits properties, USDA properties and inclusionary zoning properties administered by the counties including the state 201H developments.

Over the last 20 to 30 years, we have lost over 3,000 of these units when affordability restrictions have lapsed. Currently, there are only an estimated 17,000 of these units remaining. Over the next 15 years, approximately 4,500 units will lose their restrictions and another 10,000 units over the next 30 years.

These losses are significant and impact our communities in many ways.

Excluded from the numbers above are privately owned apartments that also serve this population. These apartments were developed years ago, have smaller units and affordable rents. In other communities, these units are referred to as naturally occurring affordable housing (NOAH).

Recently, many NOAH units, especially in desirable locations, have been converted to condominiums. It is estimated that over 15,000 units have been converted to condominiums in Hawaii.

View of Alewa Heights located above Honolulu, Hawaii.
Many cities and states have active affordable housing preservation programs to save inventory, but that’s not the case in Hawaii. Cory Lum/Civil Beat/2021

One factor contributing to the loss of these units are the short deed restrictions that were used to develop these properties. As these restrictions expire, many property owners seek higher rents or sell the developments outright. Affordable housing should have long-term deed restrictions and there is no financial reason not to restrict them in perpetuity.

Many cities and states have active affordable housing preservation programs to save inventory but Hawaii and the counties do not. Such a program is urgently needed whether or not officials really want to discuss the loss of these units.

The only time the public becomes aware of the looming loss is via media coverage of particular properties. Recent examples include the Front Street property on Maui and Kukui Gardens in Honolulu.

And only when the media draws attention to the problem does the state and Legislature attempt to solve the problem with additional money. It would be more practical to analyze the current inventory of properties, develop a program to preserve as many units as possible and budget for the cost proactively.

No one at the state has an accurate list of the unit expiration dates and loss projections.

Many times, when the deed restrictions expire, the state is forced to come up with additional money and utilize scarce federal tax credit funds to save the properties. This takes away from building more new units.

No one at the state has an accurate list of the unit expiration dates and loss projections. This should be a priority for HHFDC, and the information should be made public.

Having developed and owned affordable housing, I don’t need to get paid two and three times on the same property every time the deed restrictions expire, and my grandchildren don’t need to inherit a windfall profit.

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About the Author

Charles P. Wathen

Charles P. Wathen is with the Hawaii Housing Alliance.

Latest Comments (0)

HPHA, EAH and other public housing managers need to crack down on the housing residents that should be in affordable rentals and open up public housing to the truly needy. I recall HPHA Hakim, many years ago saying that the vehicle ceiling would be lowered. My family is a one-vehicle and it is 15+ years and I drive by public housing and see so many newer vehicles. Do taxpayers still foot the bill for no-fault for these public housing vehicle drivers?

H_Tanaka · 4 months ago

Among the people who know this subject from the inside out as developers--ranging from Stanford Carr to Christine Kemp to Peter Savio to Marshall Hung and many others--Chuck Whathen knows from the ground up how this works. His advice: once Affordable, always Affordable. (The capital A means a proper noun, not the adjective affordable.) The decision to permanently assign (as in a deed restriction) a rental housing cost conforming with affordability math for the lowest household income quintile, or the first and the second lowest quintiles--an algorithm--is a political decision. Why Hawaii cannot make the decision is not on the developers, who wish to play by predictable rules of the game. Failure to decide is on public policy decision makers. Besides Senator Chang at Ledge does anybody even talk about this? Builders will build what you want, just ask them. Builders mobilize cross-subsidization of lower income quintiles' housing needs, just ask them. Administering affordable housing programs for the longer-run is not on the builders.

Paul_Brewbaker · 4 months ago

Charles, do you have Maui specific data?

KulaMichael · 4 months ago

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