From the Field: Hawaii Legislators Work to Block Expanded Inclusionary Zoning in Honolulu

The City of Honolulu and Hawaii state legislators are battling over a more ambitious city-wide inclusionary zoning policy announced by Honolulu Mayor Kirk Caldwell (D) during his State of the City address on February 16. His proposal would require all new developments of ten units or larger to have 5% of their units affordable to low income households living at or below 80% of the area median income (AMI). Fifteen percent of units would have to be affordable in developments located in designated areas near public transit. State Representative Beth Fukumoto (R) responded by introducing legislation to prevent inclusionary zoning ordinances that place such requirements on new middle- or low-income housing developments. Ms. Fukumoto argues that only luxury housing should be required to meet the set-aside requirements, and that municipal codes should not discourage developers who want to build for middle income households. 

The affordable housing crisis in Hawaii is extreme, with only 74 affordable and available rental homes for every 100 low income households with incomes at or below 80% of area median incomes (AMI), according to NLIHC’s report The GAP: A Shortage of Affordable Housing. Among all states nationwide, Hawaii has the second greatest shortage of affordable housing for the lowest income households. Mayor Caldwell hopes to see 800 new affordable homes built through inclusionary zoning for each year of his second term.

Currently, inclusionary requirements are only triggered when there is a change in zoning of the property or in a relatively small special development district. The mayor’s proposal would apply across nearly all of the island of Oahu. Additionally, it would expand the term of affordability for housing built through inclusionary zoning, requiring units to remain affordable for 30 years rather than the 10 years currently required with zoning changes. The mayor’s proposal also includes incentives for developers, such as reducing municipal fees for expenses like sewer service or building fees and providing real-estate property tax exemptions during all phases of construction.

Ms. Fukumoto’s bill (HB 1549) has passed through two committees in the House of Representatives. Because it allows for inclusionary zoning requirements for developments serving households with incomes above 120% of AMI, it could pass through both houses. HB 1549 is supported by influential industry groups like the Hawaii Chamber of Commerce and the Building Industry Association of Hawaii.

Advocates have been vocal about the need for new affordable housing development tools at hearings for HB 1549 and have been joined in their efforts by the Office of Hawaiian Affairs, which advocates for Native Hawaiian causes. Data shared by advocates during hearings draws from the recent Hawaii Housing Planning Study published in December, 2016. The data demonstrate that the overwhelming majority of housing demand in the state is from low income households.

Read Mayor Caldwell’s inclusionary zoning proposal at: 

Read the Hawaii Housing Planning Study at: