Proposed affordability rules for Kakaako draw concern
KAKAAKO (HawaiiNewsNow) - When its second tower is completed in January, the 801 South Street project will be home to more than 1,000 families.
But the project's developers say a new draft proposal for future affordable housing in Kakaako will make it harder to build middle-income projects like theirs.
"I don't see us doing another 801 if the proposed rules go through. I don't see it," said Dale Nishikawa, CEO of Marcus & Associates, which heads sales for the project.
"From a sales standpoint, we would be uncomfortable with trying to sell 1,000 units under rules like that. I don't believe we would be able to do it."
Under the draft rules, the Hawaii Community Development Authority wants to lower maximum income for buyers from 140 percent to 120 percent of median income.
This would make the affordable homes available for people who make less money. But it will also mean fewer people would be eligible to buy into workforce housing projects.
For a family of four, the new rules will drop the maximum incomes from about $120,000 to $100,000 a year.
HCDA officials say a recent city study showed that 120 percent area median income level is where most of the demand for housing is.
"What we are looking at in achieving those rules is creating deeper affordability and increasing the number of affordable units in Kakaako," said Deepak Neupane, the agency's director of planning and development.
Developers say the new rules are an overreaction to recent Hawaii News Now reports that buyers in the 801 South Street project are earning huge profits by flipping their units.
Nishikawa said only a small fraction of the 600 units in the project's first tower have been resold.
"To focus on the fact that 16 or 20 (have been resold) ... to focus on the fact that some people sold and made money on it is misguided," he said.
Developers also complain about what they say are tighter rules on re-sales for profit.
The HCDA is required to hold two public hearings on the draft rules before they can be finalized, which is expected some time next year.
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