Priced out of Paradise: Governor works with developer on plan to build more affordable rentals
KAKAAKO, OAHU (HawaiiNewsNow) - One in five people in Hawaii qualify for public housing -- but only one in 20 get in. In other words, there's too much demand for affordable rentals and not enough supply.
Gov. David Ige says government has a responsibility to ensure there are more affordable housing options, which is why he's introduced a legislative package that would leverage state resources in partnership with private developers.
"Over the last decade, if you go back, very little housing has been produced and so I think it's that pent up demand which the Legislature and the executive now sees that we want to take action on," Ige said.
Housing is considered "affordable" if you pay 30 percent or less of your take-home income on it. Here in Hawaii, many are paying 50 percent or more.
"Oh, it's overwhelming," said Stanford Carr, president of Stanford Carr Development, which built Kakaako's Halekauwila Place, an affordable property.
"We need to build thousands and thousands more of these units," he said.
Carr said all of his tenants are "residents who represent 80 percent of the workforce. They're government employees, school teachers, firemen, small business owners, folks in visitor-related industries. We have studios, one, two, and three bedroom units all targeted to households at 60 percent of AMI (area median income). That translates into a single person making less than $41,000 a year and translates into rents starting at $500 a month," Carr said.
The governor's plan would add more money to the state's Rental Housing Revolving Fund by eliminating the current cap of $38 million or 50 percent of conveyance tax revenues.
It would also finance the Dwelling Unit Revolving Fund -- money that would allow for infrastructure improvements to highways and sewage, a major obstacle for affordable housing projects if developers have to take on those costs. Another initiative identifies state land that can be provided for rental development.
"Our proposal is committed to generating 10,000 units over the next few years," Ige said. "I know that that's far short of the total demand -- but clearly, when you look at the past decade where very little was done, it really makes the first step to getting and creating more housing for our residents."
Analysts say Hawaii needs 66,000 units over the next few years.
And experts say this type of public-private partnership is exactly what is needed to make that happen.
"The development side has the entrepreneurial spirit and the urgency," said Ricky Cassiday, a real estate analyst. "The public side has some great resources -- they have land, they can borrow, and they can channel their efforts to solve real problems like infrastructure and they can do it in a collaborative way."
The governor's legislative proposal came out of a meeting with housing experts aimed at discussing the roadblocks that have prevented affordable rentals from being built over the past decade and what role the state could play in removing some of those hurdles.
"We were working with them to look at the different tools that we have with state government," Ige said, "and how we can make them work together better to get more affordable housing."
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