Can Hawai’i solve its Affordable Housing crisis? Developers say, “Yes.” HPR’s Wayne Yoshioka reports.
There are more than 50 babies born each day in Hawai’i and many of them will need a place to live in when they grow up. Developer Christine Camp says housing prices can be stabilized if real estate speculation is kept in check.
“Glut the market with rental housing. Rental housing will make it so there’s less speculation in the “for sale” housing because people are not going to buy a unit for sake that in 2 years that’s going to double in price and so I’m just gonna buy it and rent it. Because they know they know they’re not gonna be able to rent it. If there’s 5-thousand rental housing coming up in the same year, no one’s gonna speculate to buy a unit. They’re gonna buy a unit because they’re gonna live there.”
But Camp says developers aren’t building rental housing because they can’t afford it and the use of government land with less than a 65-year underlying ground lease will not provide the collateral needed to secure a loan. She says one way government can help is to provide a pathway to homeownership to build net worth. Developer Peter Savio agrees.
“If you’re gonna build a rental project, you have to build the rental project where the tenants build equity. Otherwise you’re just gonna warehouse people forever and ever. A year ago I read an article about Singapore where they’re 95 percent owner-occupied. They saw that when you rent, all you’re doing is using the poor as the funnel to flow the money to the wealthy land owners. It makes no sense.”
Savio says Hawai’i needs to be different. But, 801 South development partner, Ryan Harada, says the Hawai’i Community Development Authority is not making it easier to build work force housing.
“HCDA has done a good job in the sense that it did add this double density. Unfortunately, they’re trying to make some changes to lower some of the income. My pitch to HCDA would just leave it alone. You have a proven 801 South Street Project. We delivered over a thousand units to the market in four-and-a-half years. There’s not another development that’s done that. So why are you guys messing with this. Leave it alone.”
Harada says the role of government is to help developers with financing, to keep it local, with lower cost. Pushing the margins and limiting buyers, he says, won’t deliver more work force housing…
“ Any time you try to legislate these types of things, it sounds good to all the politicians and legislators and what not but reality is the developers aren’t going to build something without a sufficient margin and banks aren’t gonna finance it if there’s not enough margin, if there’s enough margin and buyers to pay them back.”
Developer Camp says government should leverage resources where it counts because developers don’t follow supply and demand formulas that don’t pencil out.
“If there’s a pent-up demand and all you have to do is build it, why wouldn’t you be building it. And everyone said, “No, it’s because of those greedy developers. And I would say that’s not the case. It’s too difficult because no one would give you the money to build it to get a one percent return or a three percent return while waiting 3, 4, 5, 6, 10 years. You’ve seen projects that get announced years ago and yet you wonder why lot’s still vacant. Difficulty in financing and permitting. That’s what it comes down to.”
Developer Savio says the affordable housing crisis can be solved but elected officials must have the will and not just talk about it.
“On one side they want to create the affordable housing; but on the other side they really don’t. I mean it sounds silly but I’m convinced that it gives politicians something to talk about that’s been around since the 50s, and they say they’re gonna do something but they’ve convinced everyone that they really can’t. I mean to me it’s a game we play.”
Meanwhile, at a birth rate of 50 a day, more than 18-thousand babies are born each year in Hawai’i. Wayne Yoshioka, HPR News.