Attorney Scott Settle, Managing Principal of Settle & Meyer, joins producer/host Coralie Chun Matayoshi to discuss what more needs to be done to address Hawaii’s affordable housing crisis.
Transit Oriented Development (TOD)
The new Honolulu Rail Transit System presents an opportunity to develop commercial and residential projects around rail stations. Rail will benefit surrounding communities that should accept what goes along with it – taller buildings and higher density.
The new stadium should include a mix of housing types and income restrictions. Lots of retail and commercial space should be included to create a walkable neighborhood.
The ALOHA Homes (Affordable Locally Owned Homes for All) is a pilot project to build low-cost 99-year leasehold residential condominium units on state-owned and county-owned land within one mile of the Honolulu Rail Transit System in urban redevelopment sites sold to qualified residents. Sufficient legislative funding is needed to subsidize the desired price point.
Department of Hawaiian Homelands (DHHL) $600M Legislative Allocation
It will be a challenge for DHHL to meet the timeline to expend the $600M legislative allocation to assist beneficiaries on the waitlist. DHHL can’t just grant undeveloped land to beneficiaries – they would need to spend money on infrastructure. Beneficiaries who dream of owning a house on land may have to settle for a high rise to stretch infrastructure and construction costs. Once DHHL and its beneficiaries come to a consensus on how best to serve the 28,000 on the waiting list, the math will help determine the answer. One option is to use the $600M to build 1,500 condominiums or use it to subsidize 3,000 or more units. Another option is to use the funds to develop infrastructure on raw lands and deliver lots to beneficiaries. At $150,000 per lot, DHHL could deliver 4,000 lots or some combination.
Hawaii Public Housing Authority Plan to Add 10,000 New Homes
The Hawaii Housing Authority is setting an ambitious agenda of replacing 1,000 dilapidated units and adding over 10,000 new homes for low and middle-income households using a private master developer to reduce expenses and save time.
Building 10,000 new units will cost several billions of dollars and take a long time, even under the best of circumstances. But replacing 1,000 units can be done efficiently and cost-effectively by a developer if it is given the flexibility to put those units on selected sites and provided the subsidies needed to meet the specified affordable restrictions for those units. That may take allocating the state’s limited resources to this project over other competing affordable projects.
Vacant Home Tax Proposal
There are over 34,000 vacant homes on Oahu and the Honolulu City Council is considering a Bill to tax property owners for leaving them empty instead of renting them. Violators could face fines of up to $25k per day and the city could foreclose on the property if fines go unpaid.
Assuming the plan passes constitutional muster, it might be a stick to increase available rentals in the short term. Over the long term, it may backfire and create more “have and have nots”, with high end housing just absorbing the additional real property tax cost and being taken further off the market and unavailable to anyone other than the most elite. A better method for providing more homes to local families and kupuna is to incentivize building more for them in the urban core where infrastructure and services exist.
Zoning More Land for Urban Development and Encouraging More Ohana and Accessory Dwelling Units (ADU)
Only 5% of Hawaii’s land is zoned for urban development, and while anything and everything helps, increasing density in areas already classified as urban may be a better and more balanced approach to increasing housing while preserving rural, agriculture and conservations lands. Putting infrastructure on to undeveloped land is very expensive, and it would be quicker and more cost effective to increase density on already developed land. Encouraging more Ohana and ADUs is a good idea and has already been approved for most of Oahu. The city or state could go further by doing away with single-family zoning altogether, but that might not be politically feasible. Eventually we may have no choice if urban in-fill is not allowed to take up the slack or if neighborhoods do not build enough of their fair share of housing to meet the demand of local families.
To learn more about this subject, tune into this video podcast.
Disclaimer: This material is intended for informational purposes only and does not constitute legal advice. The law varies by jurisdiction and is constantly changing. For legal advice, you should consult a lawyer that can apply the appropriate law to the facts in your case.
