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UH Researcher Skeptical of Housing Proposal To Build $300,000 Units

The U.S. National Archives

Honolulu is the third most expensive housing market in the country. That is according to a February analysis from the University of Hawaii Economic Research Organization. But Hawaii has always been an expensive place to live, according to one of the state's top economists. 

A proposal at the state capitol to address the lack of affordable housing in Hawaii's largest population center has garnered signinifcant community attention in recent weeks. ALOHA Homes, as its known, would offer urban apartments for around $300,000 sold under 99-year leases. It's an idea modeled on a successful public housing program in Singpaore.

This week, the Unviersity of Hawaii Economic Research Organization released its analysis of the proposal. In short, it acknowledges the dire need for more and less expensive housing, but is skeptical about the state's ability to produce units for $300,000 or less. The current ALOHA Homes plan would not include a regular subsidy to offset building costs.

Sumner La Croix is a reserach fellow with UHERO and the author of Hawaii: 800 Years of Political and Economic Change. He co-authored the UHERO brief on ALOHA Homes. He told HPR that Hawaii's affordabiltiy issues go beyond land scarcity.

"We have somewhat onerous regulation of land. If a development project fails at any level of the regulatory process it's dead."

According to La Croix, the State of Hawaii was a pioneer in implementing this type of development regulation to protect the environment. That protection has come at the expense of cheap housing. 

"It's not clear to me that single family homes are ever going to be cheap here. It's not clear on Oahu that we want to cover the isalnd with single family homes. In some sense that would be killing the resource we depend on. But on the other hand we certainly can build up in various areas.  "

La Croix went on to acknowledge the need for structural reform to local development regulations.

"I think what people see today is that we're building up with luxury condominiums and not with more affordable housing. I think there's tweaks to the regulatory mechanism that would help push more affordable housing."

The ALOHA Homes bill wouldn't change those regulatory mechanisms, but it does aim to increase the stock of affrodable housing by 6,000 units per year. The proposal appears dead in the 2019 legislative session, but will likely be introduced again next year.

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