Affordable Housing – Essential Truths & Political Realities

by Gary Hooser

Affordable housing must remain a top priority in the 2025 Hawai’i legislative session.

There are many paths to get there. Unfortunately, the large landowners, real estate developers, contractors, and all the big money guys, will once again be focusing their demands on “streamlining” land-use regulations and “fast-tracking” rezoning and permitting processes.

We each see the world through our unique lens. Many of us believe these laws are essential tools needed to protect people and the planet from the pillage and plunder of unchecked capitalism.

Others who profit from that capitalism, see them as unnecessary, cumbersome, and expensive impediments to development (and related profits).

Development-friendly legislators will support bills reducing land use regulation but rarely introduce measures to increase staffing of the agencies responsible for doing the work.

The land development industry is a formidable political force united in pushing to reduce environmental protections, limit public input, and expand upward the definition of “affordability.”

These are attractive political options because they have no immediate financial cost or “budget impact.” They cost nothing to implement but the long-term negative impacts on people and our natural environment can be significant and irreversible.

Hawai’i is one of the most beautiful and desirable places to live on the planet. The demand for real estate here is thus insatiable.

The median income for a family of 4 living in Hawai’i is $133,656 (100% AMI). This means half earn more, and half less.

It’s this bottom half of income earners who need the most help but the push by developers is for “workforce” housing, serving households earning up to 140% of AMI.

While it’s hard to believe, new homes in Hawai’i can be priced at $700,000 and still qualify as affordable “workforce” housing.

The overall median price of a home in Hawai’i as of December 2024 was $975,000 and the average price was $1,246,145.

Developers and their friends at the legislature will tell you any new housing is good housing, and that there’s a “trickle-down” effect.

But the so-called trickle-down theory does not work here. Real estate prices are always drawn upward – pulled always by the insatiable demand.

A resident moves into a new “workforce” housing unit, and their previous home is then rented to a new occupant at a higher rate – always seeking the market price.

Meanwhile, no one’s building anything for those folks working full time, often at multiple jobs – yet living in the garage of friends and family, or in their car down at the beach park.

We must support the development of new workforce housing, but the most critical need is for those earning below 100% of median income.

No developer or land owner will develop truly affordable “below market” housing unless required to do so by the government or offered generous government incentives.

Selling homes “below market” translates to a potential windfall profit for buyers. Consequently, homes sold benefiting from government/developer subsidies must include buy-back provisions, prohibitions against vacation rental, and/or other “anti-speculation” clauses.

Yes, there are many paths to increasing affordable housing: Direct financial subsidies, tax credits, developer mandates, low-interest loans for ADU rental construction, government-backed first-time home-buyer mortgages, expanded sewer systems, urban redevelopment, and “Singapore style” transit-oriented development – to name just a few.

We can do this. We can do it without compromising environmental protections, and we can do it in a manner that supports those with the greatest needs first.

There’s no shortage of wealth in the islands to help pay for it. Foreign investors, uber-wealthy second-home owners, corporations “banking” lands in existing urban areas, hotels, tourists, and more – all have the capacity to help fund affordable housing, and none are leaving because their taxes are too high.

GARY HOOSER is a former Hawaiʻi State Senator and Majority Leader.

About Author

You May Also Like

More From Author

+ There are no comments

Add yours

This site uses Akismet to reduce spam. Learn how your comment data is processed.