AUG. 12, 2017

Government Housing Agencies Update

by Sen. Will ESPERO

On June 15th and July 12th respectively, Representative Tom Brower who chairs the Committee on Housing and I, chairman of the Senate Committee on Housing, held joint informational briefings with the Hawaii Public Housing Authority (HPHA) and with the Hawaii Housing Finance Development Authority (HHFDC) to get an update on their housing projects for our state.  Together, these state agencies are responsible for building, managing, and assisting in the development of affordable housing and rentals..

The Hawaii Public Housing Authority was established in 1935 by the Territorial Legislature to provide housing for low-income residents of Hawaii. HPHA is tasked with managing federal and state public housing programs, including Section 8 and senior housing. The Hawaii Housing Financing and Development Corporation is the finance and development arm of the state’s affordable housing program. It works with developers and manages several funds that include the Rental Housing Revolving Fund, Dwelling Unit Revolving Fund and oversees the issuance of the low-income housing tax credits (LIHTC) which are finance tools that developers in Hawaii use to build affordable housing in our state.

One focus of the HPHA briefing was the completion of phase 2 at Kuhio Park Terrace which is expected to create about 300 new units.  This project has been delayed for several years, and could have been built by now. I pressed Director Hakim Ouansafi to resolve his differences with The Michaels Development and start building or end the contract and find a new builder.  I was assured positive progress would occur.

The other main HPHA project update was the Mayor Wright/Iwilei transit-oriented development (TOD) partnership with Hunt Development.  This plot of land currently has 349 units, and it will be re-developed into a mixed-use property with 2500 rentals of which 75% will be affordable rentals using Hawaii Public Housing Authority guidelines and income requirements.  The project will be done in several phases over an estimated 10 year period.  The City and County Department of Planning and Permitting said it believes the soonest the project can be ready for construction is 2019.  With that being over 16 months away, I am hoping we can cut the approval time on permits and begin building sooner by streamlining the approval process.  Key permits include zoning permits, building permits, and off-site improvement permitting.  Investing in sewer and drainage projects will also cost millions and will need time to be completed.

This transit-oriented development project should be the first TOD project to get started near a rail station.  Hunt Development has already spent over $1,000,000 in pre-development costs.  This important housing project will be one to watch, monitor, and when necessary question as we work to build over 22,000 affordable housing units on Oahu in the next 10 years.

The Hawaii Housing Finance Development Corporation updated the committees on a number of initiatives that will help build the affordable housing stock. As the agency that administers the award of low-income housing tax credits, gap loan financing, and other low-interest loans to developers, HHFDC plays a critical role in our community. Led by its director, Craig Hirai, the committee learned that the pipeline of affordable rental projects is quite robust and the demand by the private sector to build is held back mostly by the amount of funds that the state is willing to invest in its housing trust funds. With the cost of building at all-time highs along with restricted rent prices, developers cannot build projects without significant subsidies or incentives from the state. Developers are ready, willing and able to build affordable housing if the state and County are willing to accommodate them.

I was happy to also learn that the Alder Street project, which is a joint HHFDC-Judiciary effort, will be funded by the HHFDC. For several years this rental project failed to receive enough funding from the legislature despite immense community support, being infrastructure-ready, along the rail route, and on state-owned land. This project will be a mixed-use building targeting those who make 60% AMI and below as well as serving the juvenile services needs of the Judiciary. The project is slated to be completed the end of 2021.

The HHPA and HHFDC are two government agencies which play an important role in building affordable housing for our residents.  Their work and efforts are paramount to solving Hawaii’s housing shortage.  With government and the private sector working together, Hawaii’s housing needs can be solved in the next 5 – 1o years. 

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