Saturday, January 25, 2014

 

Model of future Kakaako validates concerns


by Larry Geller

Too much

What a great gift this morning’s front page is to opponents of overbuilding by the HCDA in Kakaako. Thank you, Star-Advertiser.

Yes, this is snipped from our Honolulu newspaper, not a Hong Kong edition.

This official depiction validates a photoshopped Waikiki 2050 Slideprojection of Waikiki in 2050 that I made for a presentation to the Waikiki Neighborhood Board.

Rep. Scott Saiki has introduced bills to reform (or abolish) the HCDA. Today’s article reports:

Saiki (D, Downtown-Kakaako-McCully) acknowledged that HCDA is responding to market conditions that are favorable to development. "I think what's happened is that along the way they have not adequately answered questions that have been raised by the public about the direction of Kaka­ako and the extent of the buildup in the area," he said.

[Star-Advertiser p. A1, Too much, too fast?, 1/25/2014]

Indeed, conditions are currently “favorable for development.” The economy has improved for many on the Continent, and climate change is bringing extremes its cold outsideof heat and cold that make condos in Hawaii extremely attractive to those who notice that the weather is much, much better here.

Take the recent “polar vortex”  for example. A composite of news coverage illustrates why those Kakaako condos should sell quickly.

Really, I can sympathize. I’ve done snow. I’ve driven on icy roads to get to work. I’ve waited for the snowplows to clear the streets. I know what –15ºF feels like.

Those condos will sell. Some will sell to snowbirds with little or no income taxable in Hawaii. Nevertheless, they will drive cars and further jam up the streets for the rest of us.

So what about the rest of us? What about housing for Oahu or Hawaii residents? From the article:

But some in Kaka­ako complain that the HCDA has catered to developers at the expense of infrastructure, traffic and the ocean and mountain views of existing residents. Others cringe at luxury penthouses designed to lure wealthy mainland and foreign investors when high-rise units designated as affordable are priced out of reach of many residents.

“Priced out of reach of many residents” could more accurately be “Priced out of reach of most residents” because the definition of “affordable” appears to be affordable to those earning 140% of the Area Median Income.

me·di·an ˈmēdēən/ adjective:  denoting or relating to a value or quantity lying at the midpoint of a frequency distribution of observed values or quantities, such that there is an equal probability of falling above or below it.

So at 140% of the median, “most” do not fit into this category.

As to “workforce housing,” our “workforce” can’t be making anything near 140% of the median. Ask your waiter the next time you visit Zippy’s.

Now, I’m admittedly out of my depth here, but I have seen charges that HCDA allows the use of a 2.9% mortgage rate in the calculations. If true, then this also bears scrutiny. What is the actual rate buyers will get for these units? Wouldn’t the range of 5.5-6% be more accurate? Perhaps someone who understands this will comment—or submit testimony on one of the many bills introduced this session related to the HCDA.

Honolulu has no regime of rent control or rent stabilization. There is no protection for renters, including seniors on limited income or those at the lower end of the income scale. The HCDA is not looking out for the segment of the market that is getting squeezed, but instead, as the article notes, enables the creation of “luxury penthouses designed to lure wealthy mainland and foreign investors.”

Why not repeal the HCDA and begin some serious urban planning for the rest of us? Luxury penthouses can co-exist with rent-controlled apartments. New York does it. We can too.



Comments:

Great article. Alas, someday I will be leaving Hawaii because I can't not afford the cost of living here. I have had a good 12 years here though and enjoyed my time, but it looks like Florida is going to be as close as I will ever get to the nice weather here.
 


Thanks for your comment.

Good luck to you whether you stay or go. And if you need to go to Florida, as many in New York did who were fed up with the snow, please go in good health. I don't know how many times I heard or said that when we lived there.
 

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