Lessons from a conversation with Honolulu City Councilmember Kymberly Pine, Chair of the Committee on Zoning & Housing

My key takeaways from Honolulu:

  • Policymakers must understand developers’ perspectives and their work to appropriately incentivize affordable housing development.
  • Unwieldy bureaucratic systems can be a true strain on development. Simplifying standard protocol could go a long way in incentivizing affordable housing creation.

What makes Honolulu’s story about affordable housing unique?

While Honolulu’s natural beauty has been ever-present, affordable housing has been historically lacking. These points are not unrelated: Honolulu is a desirable and expensive place to develop. Development there centered around projects like hotels that had reliably high cash flows for foreign investors. In response to booming development, affordable housing production was unwelcome due to general concerns of over-development. As a result, affordable housing was built so far out of the city’s center that the sprawl has led to some of the worst traffic in the country.

Affordable housing development was also stifled by various regulations. ADA requirements limiting heights of buildings without elevators made it nearly impossible for developers to build enough affordable units to create sufficient income, for example. And, with the creation of the federal Low Income Housing Tax Credit program in the 1980s, Honolulu tried to incentivize the development of apartment buildings by requiring 50% of their units to be affordable for residents 60% of the Area Median Income (AMI) or below. Only 10 units were built under these guidelines.  A later Honolulu bill changed the 50% minimum to 30%, without much success. The “solutions” to lacking affordable housing over a few decades had not involved working with developers to understand the challenges.

Honolulu’s history shows that developers were never going to build affordable housing if they were going to lose money in the process. Something needed to shift.

What is the state of affordable housing in Honolulu today?

Developing in Honolulu is still extremely expensive, and the city has some of the most expensive housing costs in the nation. Housing has been Councilmember Pine’s priority throughout her City Council term, and she has worked with developers and partners to make affordable housing a feasible development choice. Recognizing that developers have a crucial role to play in creating more housing for her low-income constituents, she learned about what would make more affordable housing projects pencil. What regulations would need to shift to allow for the creation of more affordable units?

Councilmember Pine learned that developers were willing to engage and, like many of us, prefer to have choices. New ideas were generated collaboratively. Honolulu has since tested and adapted new policies to incentivize affordable housing development. For example, a program was established to allow buildings to exceed the standard FAR if more than 50% of units were 140% AMI or below. Under this policy, a lot of not-so-affordable housing for the higher income levels was built. Legislation course-corrected and now limits this to 120% AMI.

Other great strides have been made recently to welcome affordable housing development in Honolulu. For affordable housing in particular, there are fewer parking requirements, set backs requirements are more flexible, and there are no property taxes or sewer hookup fees. Five-story walk-ups are allowed once again. Affordable housing units are allowed in certain areas that had been zoned for single-family homes only. A commitment to fifteen-year affordability is required rather than affordability in perpetuity. Today, Honolulu policymakers and affordable housing developers understand how to work together to achieve the same end goal.

If you could wave a magic wand and change any one policy at any level of government, what would it be and why?

Two ideas:

The Department of Planning and Permitting should innovate beyond their current regulatory role. As is, the Department reviews in such detail that it can take two years for projects to receive permits. Projects are lost that way. The Department could provide permits efficiently by focusing their review only on health and safety and by trusting architects and engineers’ stamps. This change would benefit Honolulu’s economy; construction jobs could start earlier, shipping companies could plan accordingly, and people would be housed sooner.

Allowing tiny homes to be developed on agricultural land for farmworkers would help Hawaii invest in its own economy. While Hawaii historically had a thriving agricultural economy, today Hawaiians primarily rely on imported food. To bridge the desire for a robust local food economy and more affordable housing, Councilmember Pine is eager to work with people who claim opposition to tiny homes on agricultural land for environmental reasons.

What makes you hopeful about housing in Honolulu?

Honolulu’s affordable housing development industry is focused and eager to build. Even throughout COVID, with many industries unable to continue business as usual, development teams are working toward building more affordable housing and preparing their permits. As planned, the recent policy shifts are encouraging more affordable housing development in Honolulu.

What are effective ways to include the people most impacted by affordable housing issues in government-level decision making?

Toward the beginning of her term, Councilmember Pine held a meeting with approximately one hundred stakeholders, ranging from housing developers to dedicated housing advocates. Typically on opposite sides of the aisle, those groups arrived at the meeting without trusting the “other side.” Councilmember Pine facilitated an eye-opening conversation that engaged stakeholders to think through what it would take for all parties to come together to develop more affordable housing. Developers were given the opportunity to teach about the complexity of developing affordable housing. Advocates were given the space to share stories that demonstrated the value of affordable housing in real people’s lives. In this collaborative format, foes became friends. All stakeholders contributed to the creation of the Bill 59 bill that passed the Honolulu City Council with a unanimous vote.