A Honolulu councilman is proposing a measure that would create a special fund to attract developers to build along the rail.
City councilman Ernie Martin told KHON2 he introduced the idea after attending a recent rail conference.
Martin says other cities, like Denver, do similar legislation and they’ve been successful.
“Everyone knows we’re in a severe shortage of affordable housing statewide,” Martin said. “I think they predict we need a minimum of 20,000 more affordable housing units within the next 10 years.”
The councilman said getting developers to build affordable units is a challenge.
“Developers have testified on numerous occasions that it’s quite difficult for them to construct affordable housing units, it’s just too expensive,” he said.
Martin told KHON2 developers would end up taking a loss because the money brought in from affordable units isn’t enough to cover the cost of construction.
“They would be losing money and it wouldn’t make it financially feasible for them to construct such units,” Martin said.
But here’s how Martin’s proposal would work.
Let’s say the cost of a project is $10 million, but the profit from affordable housing only brings in $5 million. Money from the special rail housing fund would supplement the difference.
“Hopefully by creating this type of incentive of special financing, I think developers might take a look at it instead of just focusing on Kakaako where a lot of the development has occurred thus far,” Martin said.
So where would the money come from?
Martin said existing resources and federal funds could be moved around, or the money could come from the private sector.
If the idea comes to fruition, Martin said the focus would begin near Waipahu and Pearl City.
He said more affordable and workforce housing along the rail would also promote more riders.
“By developing along the rail line you eliminate the necessity of having to own a car,” Martin said. “So what we want to do is create any opportunity or incentive to push people towards riding rail.”
The proposal is on the agenda for this week’s city council meeting. We’ll let you know where it goes.