Multi-Family Workforce Housing
HCDC is Your Partner for Building Multi-Family Workforce Housing
It’s not a secret that Oahu’s housing costs are some of the highest in the country. There is a huge need for more affordable housing units, as many local residents are priced-squeezed within the existing housing market, and many have to make significant sacrifices to be able to find suitable housing.
Building affordable ‘workforce housing’ is more attractive than ever before to landowners and property managers, and HCDC is the leading organization to oversee workforce housing development. We are your primary partner to help bring these units to life.
HCDC can take your project from beginning to end with our comprehensive team of local development consultants. We will work with you through the planning, financing, design, and operations of your new building, ensuring that your development is well thought out, implemented efficiently, and completed on time.
How Bill 7 Will Change Development on Oahu
Bill 7 is a workforce housing pilot project, approved by Honolulu City Council in 2019. This legislation makes it easier than ever before for landowners to replace older apartments and other buildings with modern, denser developments in order to greatly expand Honolulu’s housing stock.
Bill 7 creates financial and logistical incentives for landowners to create permanent, affordable housing opportunities from their existing land or properties. Bill 7 specifically focuses on opening up more affordable units in areas that are zoned for apartments and business mixed-use areas. Many existing units in areas like Makiki, Moiliili, and McCully were built in the 1950s or 1960s, and these units are outdated and often sub-standard.
Pacific Business News explains that Bill 7 is a five-year pilot program, targeting infill lots of 20,000 square feet or less. Bill 7 allows for a higher density of units and smaller setbacks than what was previously permitted and eliminates many of the fees imposed on new development projects. Perhaps most interesting to developers, plan reviews and permits are to be expedited to 90 days. With the provisions and incentives set forth in Bill 7, retired developer Marshall Hung estimates that there could be 500 new units created per year - which could mean 2,500 over the course of the pilot program.
Bill 7 is specifically targeted at those making 100% or less of the local median income (at the time of this writing, the median household income on Oahu is about $88,600 for one person or $125,900 for a family of four. The housing need is for units priced between $1500 and $2000/monthly. With the increased density and incentives for better financing, developers are able to create more units at lower rental prices.
What is Workforce Housing?
Workforce housing is housing that’s meant to be affordable to working individuals and families in a middle-income bracket. Workforce housing is usually targeted at those making 60%-140% of the area median income; at this income level, these households would be disqualified from other traditionally affordable housing opportunities or housing vouchers. Workforce housing can also be referred to as ‘middle-income housing,’ according to the Brookings Institute.
Traditionally, workforce housing is meant to provide housing opportunities for teachers, police officers, social workers, and city/state workers - working families that make a stable income but are often (especially in Hawaii) priced-squeezed out of standard housing markets; maybe residents in this income bracket need to pay a higher percentage of their income on housing.
The goal of workforce housing is to have residents living and working within the city center. This type of housing growth can be really beneficial: not only does it increase the density of existing spaces in the city (sometimes this is called infill development), it makes use of existing housing spaces by building UP instead of OUT. Clustering residents near their workplaces, rather than requiring workers to commute into the city center, can prevent urban sprawl, reduce traffic congestion, and reduce the overall carbon output of residents.
Creating housing of this sort is especially important in urban Honolulu, where middle-income families have historically had to move further from the city center in order to find affordable housing. These residents then need to commute into the city, creating some of the worst traffic congestion in the nation, and necessitating the development of infrastructure and services in less-developed areas, and reducing the quality of life due to the time and cost of the commutes.
HCDC is a committed partner focused on helping developers make the most of the development opportunities that Bill 7 can offer: to learn more about Bill 7 and the incentives, or to discuss your project, reach out to one of our experts here.
