HONOLULU — Affordable housing guidelines set by a state agency could rate two-bedroom homes costing $1 million as affordable for some households eligible for government-subsidized housing.
The guidelines established by the Hawaii Housing Finance and Development Corp. were aimed at helping developers produce affordable housing, the Honolulu Star-Advertiser reported Sunday.
There is little likelihood developers could produce and sell $1 million homes to satisfy an affordable-housing condition under state and county requirements typically tied to projects receiving zoning changes, development bonuses and fee waivers.
“These formulas get to be so crazy that they get to be above market price,” said Kenna StormoGipson, an analyst with the Hawaii Budget and Policy Center. “Their guidelines clearly need revamping.”
Household income, family size and interest rates are primarily used to compile annual housing affordability tables.
Similar formulas are used by Honolulu and the Hawaii Community Development Authority, a state agency regulating development in Honolulu’s Kakaako neighborhood, where some of Oahu’s priciest condominium towers have been built.
“The pricing of these homes is really based on what buyers value them at with all of the restrictions that are placed on them,” said Race Randle of Howard Hughes Corp., the developer of Ward Village in Kakaako.
The Hawaii Housing Finance and Development Corp. begins with federal data for Honolulu’s median household income, which was $101,600 last year. Median income is the figure at which half of all households earn more and half earn less.
The calculation is adjusted so median income results are defined by family size. The corporation’s rules allow households earning as much as 140% of the median income to qualify for subsidized housing. The limit equates to $123,480 for a single person and $176,260 for a family of four.
Under current guidelines, families of four in Honolulu earning 140% of the median income can qualify for subsidized housing priced as high as $1,026,800.
During last year’s state legislative session, then-Sen. Laura Thielen and Sen. Sharon Moriwaki, both Democrats, and Sen. Kurt Fevella, a Republican, introduced a resolution calling for the agency to review and compare its affordable home price methodology against other places with high housing costs, such as San Francisco.
The resolution, which called for the agency to report analysis results to the Legislature before this year’s session, did not receive a hearing and was not adopted.