The Hawaiʻi Community Development Authority has a program that lets middle-income residents buy homes at below-market rates. It's called “reserved housing.” But some buyers are skipping that program — and paying more.
Gentry Homes set aside nearly a quarter of the 400 homes it's building in Kaʻulu as reserved housing. The project near the Kapolei Costco is the first major housing development in Kalaeloa.
The homes were priced below market rates as part of the reserved housing program. The state agency oversees development in Kakaʻako and in Kalaeloa, which is the former Barbers Point Naval Air Station.
But Gentry found that some buyers are choosing to pay more for the new homes. That's because the reserved housing program comes with certain restrictions; for example, a “regulated term” that says how long a buyer must live in the home before they can sell it.
Gentry says there were 14 reserved units that weren't selling. So the developer asked HCDA if it could use credits from another project to satisfy its requirements. It also asked if the regulated term could be shortened from five years to two years.
Both moves are a first for HCDA, which gave final approval at this week’s meeting. Now the agency is reviewing the program to make sure the restrictions on reserved housing are appropriate.
Another state agency that provides funding for affordable housing developers is also looking at changing the regulated term for homes built under its policies.
That term for holding on to an affordable home is currently 10 years. But a bill introduced in the state Legislature this year would allow people to sell those homes whenever they want to — the sales price would be tied to an index, possibly related to the home’s rate of appreciation.
As HCDA Executive Director Craig Nakamoto points out, the goal of these programs is to sell affordable housing.
He says if those homes are not sold, they’re not in the hands of the people who really need them.
