Very affordable housing

HILO — Turns out the county’s affordable housing requirements can be pretty affordable for developers.

The County Council on Wednesday is set to approve payments from two developers who opted to make payments rather than constructing affordable housing near their developments as a condition of rezoning. The two resolutions sailed unanimously through the Finance Committee on March 13.


Resolution 519 accepts $23,600 from Wainani 42 LLC to satisfy the affordable housing requirement for a rezoning that allowed the construction of 50 units at its North Kona site off Kaiminani Drive. In all, it’s required to pay $94,400 if it wants to complete the development of 200 units at Wainani Estates, according to a 1998 resolution passed by the County Council sitting as the county Housing Agency.

Houses in the subdivision are listed for sale on real estate websites ranging from $559,000 to $929,000.

Resolution 522 accepts the remaining $50,000 from KW Kona Investors LLC, the second half of $100,000 it was required to pay to rezone and develop 50 hotel units in Kona Village.

The money satisfies the “basic housing requirement by providing or causing the provision of affordable housing units to meet the direct and indirect resort hotel employee housing demands generated by the resort development or by undertaking other related mitigation measures, such as employee training,” according to a 1987 ordinance passed by the County Council.

In 1987, the county calculated that eight affordable housing units would need to be built, at a cost of $12,500 each.

Times have changed, prices have increased, but the original agreement stands. The development agreements don’t contain a sunset date or a cost-of-living adjustment.

The money collected from affordable housing payments goes into the county’s housing revolving fund, Housing Administrator Neil Gyotoku told the council. He said there’s about $1 million in the account.

“It can be used for any housing program within a 25-mile radius,” Gyotoku said in response to questions from Kona Councilman Dru Kanuha and North Kona Councilwoman Karen Eoff. “It can be used to help other projects being developed or to improve existing housing or existing programs in that area.”

A 2014 study by the nonprofit Rural Community Assistance Corporation found approximately one-third of Hawaii’s 400,000 households are “cost burdened,” paying more than 30 percent of household income on housing costs.

“With the cost of living ranging from 30 percent above the national average to well over 60 percent, depending on family size, Hawaii’s affordable housing and homeless problems have reached crisis proportions,” the study says.

Affordable housing ultimately falls on county governments, the report noted.


“Most state programs are not designed to create developer incentives to build affordable homes necessary to meet the demands of this income group,” the report said. “Since counties are in the best position to control private development through zoning density, subdivision, building standards, and other requirements, affordable housing to meet the needs of moderate-income families is mostly initiated at this level.”

Messages left with the two developers weren’t returned by press time Monday.

  1. KonaDude March 27, 2018 3:39 am

    Once again, lots of rules but not much enforcement!! The government has the ability but takes the cash instead.

  2. bigislandkane March 27, 2018 5:59 am

    This is a huge part of the problem of affordable housing when the County allows developers to “Buy them out’ at a rate of only $12,500 per unit!!! It should be more like $125,000 per unit.

  3. Joan Sheldon March 27, 2018 6:17 am

    Letting Developers out of building affordable building units with their project and only paying $12,500 per unit to the County a JOKE…. of course The County couldn’t build anything habitable for $12,500 either. The fact that the County can use the money for “other Projects” means affordable housing is just shelved. They could, however, build units with the $1,000,000 they say they have in the affordable unit county FUND……….so why don’t they?

  4. antifaHI March 27, 2018 7:37 am

    That’s a joke–paying money instead actually building units?! We need to have the worker bees where the work actually is located. That’s the concept of any urban settlement. The law should actually outlaw monetary compensation. especially when it comes to investment properties, condos, and second home projects.

  5. Bigislandfarmer March 27, 2018 7:39 am

    Disgusting. The requirement should be one for one with no option to buy out. Failure to do this creates segregation. This is why the “resort” zoned areas in Kona and Kohala are 60-80% white on an island that is 80% non-white. So this corrupt council is going after vacation rentals under the guise of lack of affordable housing while giving 1%er developers whatever they want without actually doing much about increasing low-cost housing. The poorest people here are disproportionately single mothers and non-whites. For the women and people of color on the council to ignore this is unacceptable.

  6. 4whatitsworth March 27, 2018 9:19 am

    Someone should look at why with so much inexpensive land there is a shortage of even reasonable housing here. I think what one would find is that regulations, soft costs, archaeology, and utility connections, etc are probably close to 100K per unit for a single family home site, then add $12,500 for affordable housing credit and carry the debt and risk for 5 years with an uncertain outcome. If the development goes then whoever builds the home probably has another 50K is soft costs associated with all the bureaucracy here so its 172K + the cost of the house if you don’t count the carrying costs.

  7. Buds4All March 27, 2018 4:33 pm

    “β€œIt can be used to help other projects being developed or to improve existing housing or existing programs in that area.” ” LIKE EOFF’s Vacation Rentals!

  8. paul March 27, 2018 4:48 pm

    this council has a million in an account???????watch out!!!! will probably spend on welfare or salaries….corruption and waste at its best

  9. diverdave March 27, 2018 11:45 pm

    The legal mafia in action.

  10. Mauka Tom March 28, 2018 10:21 am

    They should have to pay a lot more, and the fee should be pinned to cost-of-living increases. The money should not flow into yet another county slush fund, but instead should be legally required to be spend on construction of new affordable housing units.

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