Say It Ain't So! HCDA Says NO to Affordable Rentals

06/01/2015 04:19 pm ET | Updated May 29, 2016

Howard Hughes Corporation got screwed last week. That doesn't happen often, me concluding a big national company with deep pockets and big budgets got screwed. But when HCDA, the planning oversight organization in charge of the future of Honolulu's urban core, denied the Howard Hughes request to convert a planned building from condos-for-sale to rental units, the HCDA said no.

Say what? Somebody wants to build affordable rentals and they can't?

If you live in Hawaii, you know there's a housing shortage, that almost half of the population rents (a much higher percentage than elsewhere in the country), and that finding decent rentals is akin to a blind squirrel finding an acorn. It might happen, but don't count on it.

But here's the thing. Howard Hughes made a rookie mistake some time last year. They started thinking, started getting creative. They started asking questions.

Their permit for their "reserved housing" building at the corner of Ward and Halekauwila had already sailed through HCDA and they were all set to build it, a perfectly fine modestly priced building for Hawaii's working families - parents and a couple of kids - making somewhere between $104,300 and $121,650. (HCDA rules are specific, and income levels are determined by the annual AMI determination, as set by HUD.)

But Howard Hughes realized what most of us already knew. Hawaii's working families need rentals.

What if they converted the proposal to a rental project, they wondered.

Good idea, right? It seemed simple enough, and HCDA has rules for that too. A rental development in the urban core is required to keep the units available as price-controlled rentals for fifteen years before the developer can convert the building to units for sale. And the income levels for those projects are a bit lower - $86,900 to $104,300 - perhaps opening the housing door to those having even more trouble finding a place. It seemed to make sense. Just shift the project from one set of rules to the other and maybe it could be a win-win. Howard Hughes meets their HCDA requirements and 300+ new rentals come on the market.

Queue the rookie mistake. Howard Hughes went over to HCDA and started asking questions, spit-balling, brainstorming, what-ifs bouncing around. Then somebody says something about extending the price controls beyond fifteen years, maybe even doubling it to thirty years. Yeah maybe! Seems like a stretch, but maybe! High-fives all around. Everybody left happy and excited.

If you've ever agreed to buy your college-bound kid a car, you already feel the headache coming on. No matter how tempting it is to go test drive that tricked out sports car - which your kid knows you'll never buy him - you can't do it.

You must resist. You can't. Just don't.

Because once he's felt that supple leather and heard that engine roar, there's no going back. That perfectly fine Honda Accord with the airbags and the good warranty might as well be hauled out to the trash. Frankly, he'd rather take the bus than be seen in that piece of junk.

HCDA took the bus. When Howard Hughes came back to them with their formal request to transition that development from condos-for-sale to a rental program, with the standard fifteen year requirement as outlined in the regulations, HCDA stomped their feet. Absolutely not, they declared - by a unanimous 9-0 vote - even after virtually all the affordable housing advocates on the island supported the proposal.

Yes, you read that right. Even the affordable housing folks were on board. Affordable rentals - that's something everybody could rally behind.

But HCDA had tasted thirty years. They'd felt that supple leather, imagined the wind in their hair. Fifteen years? They'd rather take the bus.

Yep. Howard Hughes got screwed. But they're a big company with deep pockets and plenty of plans. They'll get over it.

The real problem is this: the people of Honolulu got screwed. Over 300 affordable rentals in the urban core of Kakaako went poof in the pound of a gavel. HCDA took the bus, and families looking for affordable rentals are once again on the prowl with no great prospects on the horizon.

Howard Hughes says they'll appeal, try one more time. I hope they do. And I hope that by the time they come back to the table, HCDA recognizes what that college kid eventually figures out. That Honda Accord has a fine AC system, gets good gas mileage, and beats the hell out of the bus.

Honolulu needs rentals and we need them now. If Howard Hughes wants to build them and build them now, HCDA should find their APPROVED stamp and get out of the way. Their mission is to create an urban community with room for everyone, and affordable rentals are exactly what's needed when we're trying to find room for everyone.