State of Affordable Housing in Hawaiʻi, 2022 VIRTUAL BAR CONVENTION, The Real Property & Financial Services Seminar, Wednesday, October 18, 2023, 9:00 a.m. – 12:15 p.m., Jesse K. Souki, www.hawaiilanduselaw.com

1. State of Affordable Housing
in Hawaiʻi
2022 VIRTUAL BAR CONVENTION
The Real Property & Financial Services Seminar
Wednesday, October 18, 2023
9:00 a.m. – 12:15 p.m.
Jesse K. Souki
www.hawaiilanduselaw.com

2. 2022 Estimates of Homelessness
Source: The 2022 Annual Homelessness Assessment Report (AHAR) to Congress, Part 1: Point-in-time Estimates Of Homelessness, U.S. Department of Housing and Urban Development, Office of
Community Planning and Development, December 2022, https://www.huduser.gov/portal/sites/default/files/pdf/2022-AHAR-Part-1.pdf.

3. Economic Self-sufficiency
income required to meet basic needs without subsidies
Source: Self-Sufficiency Standard: Estimates for Hawaii 2020, Department of Business, Economic Development & Tourism, December 2021, at
https://files.hawaii.gov/dbedt/economic/reports/self-sufficiency/self-sufficiency_2020.pdf.

4. Incomes Below the Self-Sufficiency Standard in 2020
• Statewide
• 18.2% two-adult couples with no children
• 34.7% two-adult couples with two children
• 43.1% single-adult with no children
• 50.0% single-adult with one child
• 80.0% single-adult with two children
• A single adult with no children in Honolulu needed to earn an hourly
wage of $18.35 in 2020
• The minimum wage in 2022 was $12.00 per hour and will increase by
$2.00 every 2 years until 2028 when it will reach $18.00.
Source: Minimum Wage and Overtime, State of Hawaii, Dept. of Labor, Wage Standards Division, at https://labor.hawaii.gov/wsd/minimum-wage/.

5. ALICE: Asset Limited, Income Constrained, Employed
earning more than the Federal Poverty Level, but not enough to afford the basics
Source: ALICE cost of household essentials for all counties in Hawai‘i, United Way of Northern New Jersey, https://www.unitedforalice.org/state-overview/Hawaii.

6. Housing Demand
based on population projection, 2020-2030
Source: Hawaii Housing Demand: 2020-2030, Department of Business, Economic Development & Tourism, Research and Economic Analysis Division, December 2019, at
https://files.hawaii.gov/dbedt/economic/reports/housing-demand-2019.pdf.

7. Needed Units by HUD Income Guidelines According to Income
new households+ unmet demand + homeless households
Source: Hawai`i Housing Planning Study, SMS, December 2019, at https://dbedt.hawaii.gov/hhfdc/files/2020/01/FINAL-State_Hawaii-Housing-Planning-Study.pdf.

8. Housing Unit Production 2010-2018
• 2010 - 520,088 units
• 2018 - 546,213 units
• 26,125 units
• 2,902 on average per year

9. Impediments to Production
• Geographic Limitation
• Lack of Major Off-Site
Infrastructure
• Construction Costs
• Government Regulations
Source: Hawai`i Housing Planning Study, SMS, December 2019, at https://dbedt.hawaii.gov/hhfdc/files/2020/01/FINAL-State_Hawaii-Housing-Planning-Study.pdf.

10. Geographic Limitations: Estimated Acreage of
Land Use Districts
1993 2022
Urban, 200,698
Conservation,
1,973,792
Agricultural,
1,926,883
Rural, 11,015 Urban, 187,697
Conservation,
1,958,897
Agricultural,
1,955,704
Rural, 10,090
Source: State of Hawaii Databook, Department of Business, Economic Development & Tourism, Research & Economic Analysis, at https://dbedt.hawaii.gov/economic/databook/.

11. Residential Construction Costs
• Estimated cost to build a single-
family home in Honolulu
• $280 to $535 per square foot
• 2nd highest behind New York
• Multifamily properties
• $255 to $430 per square foot
• More expensive than New York
and 2nd to San Francisco
Source: Janis Magin Meierdiercks, O‘ahu Construction Costs Are Up, But it Could be Worse, Haw. Business Magazine, May 10, 2022, at https://www.hawaiibusiness.com/oahu-construction-
building-costs-up-affect-bid-prices-hawaii-real-estate/ (interview with Erin Kirihara, Hawai‘i region executive vice president at RLB).

12. Regulatory Ecosystem

13. The Usual Land Use Process
• General Plan
• Community/Development Plans
• Land Use District
• Zoning
• Environmental Review
• Permitting
• Discretionary
• Over the Counter
• Public Review, Consultation,
Outreach
• Contested Cases & Litigation
We’re Here

14. Special Management Areas

15. “Expedited” Review
Source: Hawai`i Housing Planning Study, SMS, December 2019, at https://dbedt.hawaii.gov/hhfdc/files/2020/01/FINAL-State_Hawaii-Housing-Planning-Study.pdf.

16. Government Land Ownership
Source: Hawaii Statewide GIS Program, Download GIS Data (Expanded), Office of Planning and Sustainable Development, at https://planning.hawaii.gov/gis/.

17. Hawaii Community Development Authority
• Legislature Creates a Community Development District
• A specific board is created to administer the new district
• HCDA adopts plans and implementation rules under HAR chapter 91
• Programmatic EIS
• Developers/landowners present applications for projects to HCDA
• Reserved housing requirements
• HCDA does not need to follow county plans and permitting but coordinates
• HCDA owns and develops property within the district
• HCDA may work with landowners to create improvement districts

18. HCDA Affordable Housing in Kaka‘ako CDD
• Reserved Housing Completed in
2022
• 803 Waimanu
• 40 Reserved Housing units
• ‘A‘ali‘i
• 150 Reserved housing units
• Ko‘ula
• 64 are reserved housing units
Source: Hawai'i Community Development Authority, 2022 Annual Report to the Hawai'i State Legislature Regular Session of 2023, January 2023, at
https://dbedt.hawaii.gov/hcda/files/2023/04/2022_HCDA_Annual-_Report-Final.pdf.

19. HRS chapter 53, Urban Renewal Law
• Initiation and approval of
redevelopment plan
• Urban renewal projects in
disaster areas
• Acquisition of lands
• Letting of contracts
• May Issue bonds
• Power of condemnation

20. Final Thoughts
• Development costs money
• Government must subsidize it or build it with public monies
• There needs to be incentives (e.g., cheap money, reduced development costs,
available public infrastructure, etc.) to encourage the private sector to build
• Debt-service coverage ratio
• will cash flow (i.e., rents) cover debt payments for the life of the project?
• Be wary of permit exemptions
• A predictable, rational administrative process is needed to gauge risk
• No process is rife with unknown risks
• The minimum legal requirement may not be good enough
• Think systemically about the project from start to finish
• Develop an integrated permitting strategy
• Start early during site selection