Financial snags delay construction of large affordable rental project on Oahu

The Parkway Villages project was supposed to start construction by November. But developer Kobayashi Group is asking the City Council for a two year extension.
Published: Aug. 25, 2022 at 10:29 PM HST|Updated: Aug. 25, 2022 at 10:50 PM HST
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HONOLULU (HawaiiNewsNow) - The rush to build more affordable rentals for Oahu’s working-class families is facing a major setback.

The Parkway Villages project, planned as one of Oahu’s largest affordable apartment projects with over 400 units, was supposed to start construction by November.

But developer Kobayashi Group is asking the City Council for a two-year extension.

“This is a project I would have thought was pushed along quicker based on the premise that it is workforce housing and affordable housing,” said City Councilmember Calvin Say.

“Having this postponed for two more years just compounds the housing shortage issue we have.”

City leaders were eager to get the new units on the market with rents likely starting at about $700 a month for the lowest income tenants while larger apartments rent for about $1,600 a month.

The developer said it’s still trying to finalize the building permits with the city Department of Planning and Permitting. The funding was only recently approved by the state of Hawaii Housing Finance and Development Corp.

That funding is through a tax credit program for affordable housing.

Developers said the credits have been rarely used on Oahu during the past 20 years, leaving tens of millions of dollars on the table.

But the building industry and city officials have rediscovered the funding source as the construction climate has gotten tougher.

“It’s been a challenging two years for all of us. You know, with the rise in interest rates... supply chain issues and inflation on construction materials and delays in delivery,” said Hawaii developer Stanford Carr.

The Kobayashi Group applied for these tax credit last year but didn’t get approval.

It reapplied and received the go ahead last month, prompting the City Council’s zoning committee today to approved the project’s new construction timetable.

So for now, the 405 affordable units will have to wait.