The Kaua‘i Housing Agency’s mission to is provide and preserve affordable, quality housing for Kaua‘i’s residents.
Broadly, we perform this mission in two ways: 1) by administering roughly $8 million in rental-assistance funding a year; and 2) by facilitating the development of affordable or “workforce” housing. The development aspect of our mission can be further broken down into two parts.
First, we directly finance and develop affordable-housing projects, usually as rentals, primarily to serve residents that earn less than 60% of the area median income (AMI). That is $40,850 for an individual and $58,300 for a family of four. These income limits come as a requirement of the federal funding we receive, and these funds cannot be used to develop housing for folks making more than that threshold.
Our second method of providing housing is through the administration of our County Housing Policy, which was enacted in 2008. As currently written, the policy requires private developers building 10 units or more to offer a percentage of those housing units at prices that are affordable to individuals or families earning from 60% of AMI up to 140%. 140% of AMI is $99,800 for an individual and $142,550 for a family of four.
Generally, these are folks who make too much to qualify for federally-subsidized housing, but not enough to afford market-rate housing. In effect, this policy requires a developer to provide “workforce” units at prices below what it costs to build them, and to subsidize those workforce units with profits from their market-rate units.
However, no workforce-housing units have been developed under the current policy. So while the policy had good intent, we have to ask ourselves, “Is it working?”
The 2019 Hawai‘i Housing Planning Study estimates that Kaua‘i has a need for 4,281 new housing units by 2025 to meet projected demand. Given our affordable-housing crisis, council Housing Committee Chair KipuKai Kuali‘i and Council Chair Arryl Kaneshiro, in cooperation with the housing agency, are proposing changes to the housing policy that we hope will provide a significant boost to much-needed housing construction on Kaua‘i. Not just to new-home construction, but to the construction of specific types of housing in specific areas.
To arrive at these proposed policy amendments, the Housing Agency contracted Keyser Marston Associates to conduct a Workforce Housing Nexus and Financial Feasibility Analysis. The purpose of the nexus analysis was to provide information regarding the development industry’s ability to sustain existing and potential workforce-housing requirements. Additionally, we considered the goals and strategies expressed in the 2018 Kaua‘i County General Plan. We wanted the housing policy and the General Plan to work together to create the type of community we have collectively decided we want.
One of the primary recommendations from the nexus analysis was that the county consider exempting multi-family, apartment-style projects from the housing policy. The logic behind this recommendation is that these types of projects generally provide the most-affordable housing options, but they typically cannot be rented or sold at a price sufficient to subsidize the lower-income units as required under the current housing policy.
In line with this recommendation, and to promote infill development in town-core areas consistent with the General Plan, we have proposed two narrowly-tailored exemptions to the housing policy. First, we exempt multi-family projects developed in the Lihu‘e, Koloa and Kalaheo special-planning areas, where there is a significant demand for housing. Second, we exempt parcels zoned R-10 and higher only if multi-family projects are built at the maximum density permitted. As a practical matter, there are relatively few units on Kaua‘i zoned R-10 or higher, and almost all the R-10 zoned land on Kaua‘i is in the greater Lihu‘e area. These exemptions do not apply to any lands within Visitor Destination Areas.
The goal of these exemptions is to incentivize private landowners and developers to build much-needed, multi-family units, where jobs, schools and infrastructure are located. Based on the prices of existing multi-family projects in the Lihu‘e area, these prospective projects would serve our residential workforce community.
A recent Op-Ed published in the The Garden Island made the claim that if this amendment were passed, every development anywhere on the island of over 10 units would be exempt from workforce-housing requirements. This claim is patently false. The proposed exemptions are narrowly targeted in limited areas to specifically support the development of multi-family projects, which can produce the most housing units at the lowest cost.
Beyond these limited exemptions, the proposed housing-policy amendments also increase the period of time workforce housing must remain affordable, increases the workforce-housing requirements for resort developments, and requires workforce housing to serve lower-income individuals.
The County Council and the Housing Agency have been publicly discussing the proposed amendments for several months, and will continue to do so. We welcome community input and continue to review all comments and recommendations with open minds.
Adam Roversi is the director of the county Housing Agency.