Oct 13, 2010

"The High Cost of Affordable Housing" Hawaii Business article

Hawaii Business Magazine recently published an article about the barriers to creating gov't subsidized affordable housing. 

Comparatively, Accessory Dwelling Units (ADUs) would require no direct gov't subsidy. Homeowners from the Private Sector would bear the costs to build 2nd units on their property.
  • The private sector could potentially build more units (on an estimated 15,098 ohana eligible properties), 
  • at little or no  cost to the gov't, and 
  • would generate revenue in the form of permit fees, GE Taxes, property taxes, etc. 
  • These additional units would rely on existing infrastructure (sewer capacity already approved within the Ohana eligible zone) and existing personnel already trained to handle the permit issuance and required inspections.
Remember that in 1982, when they were first allowed, Ohana Units accounted for 25% of all residential permit activity. Do you think our economy could use a 25% boost in construction activity?

Affordable housing subsidized by the Public Sector is like a giant in the big league, moving slowly but surely toward its goal. A single project may take years to build, but generates hundreds of affordable units. It requires concentrations of capital and expertise and is thus limited to a few players. Whereas the Private Sector works on an entirely different level, like a multitude of little leaguers, each one taking a small swing at a big problem. Small in-fill developments can be done by homeowners and contractors alone. Therefore the Private Sector typically does not require specialized land use approvals or city council resolutions before they begin construction.

Now imagine if ADU's or 2nd dwellings were allowed in Honolulu, we would have both sectors working together to build more housing units. Let's not forget that we're all in this together; let's not forget the Private Sector.