The Honolulu City Council is considering a measure that could incentivize developers to build affordable rental housing.
The council last week postponed Bill 3, but will bring up the measure again after consulting with stakeholders.
The bill would amend a $10 million city program by offering grants to developers before the construction of rental units, instead of just after construction. It would also allow developers to receive up to $35,000 per eligible unit — up from a maximum of $15,000.
“We are very much in support for having our developers also having some type of capital stack that they can also tap into because it's very, very expensive right now to do any type of building on the apartment side,” said Ned Rodrigues, vice president for Bank of Hawaiʻi, which helps fund affordable housing projects.
The City and County of Honolulu’s Office of Housing said more incentives for developers are necessary. It said the costs associated with housing construction have grown since 2021 when the grant incentive bill was introduced.
“This is a step in the right direction for the city to achieve its objective of encouraging the creation of affordable rental units for the gap income group, who make too much to qualify for low-income rental units, but not enough to afford market rent,” the city department said in a written statement from January in support of Bill 3.
“With high interest rates and the rising cost of construction, the development of workforce rentals is an even bigger challenge today than it was three years ago," the statement said.
