Frequently Asked Questions
Frequently Asked Questions (FAQs)
The Housing Team in the Office of the Governor aims to provide and protect affordable housing for our local residents. The Housing Team is tasked with the Governor Josh Green’s housing policy priorities, including coordinating the Build Beyond Barriers Working Group which was established under Governor Green’s Emergency Proclamation Relating to Affordable Housing. Following are frequently asked questions.
The Housing Crisis
Q: Is there a housing emergency?
Yes. Hawaiʻi’s housing crisis, which has been going on since the 1940s, has reached a state of emergency with fewer and fewer families able to afford to buy or rent a home. Home prices are nearly three times the national average. During the past 45 years, as the housing shortage has increased, home prices have skyrocketed by 1,200 percent, while incomes have only grown half as fast. Hawaiʻi has the highest median home price, the highest cost of living, is the most unaffordable market in the U.S., and has the highest level of housing regulations in the U.S.
It takes three times longer to obtain a building permit in Hawaiʻi than the national average, adding to our scarcity of housing, and driving up costs. The state’s housing crisis escalated during the pandemic. According to a report by The Economic Research Organization at the University of Hawaiʻi, home prices skyrocketed by 35% between 2019 and 2022.
To afford a median priced home in Hawaii, a family needs to earn $252,000 a year. Over 55 percent of renters throughout the state are rent burdened, meaning that they pay more than 30 percent of their income on rent. Nearly 30 percent are severely rent burdened, meaning that they pay over half of their income on rent each month. The state is losing workers, local families are moving away, more Native Hawaiians now live on the continental U.S. than in Hawaiʻi, and native Hawaiians make up 40% of our neighbors experiencing houselessness.
The Hawaiʻi Housing Finance and Development Corporation estimates that the state needs to build 10,000 housing units each year to address demand but that only 4,000 units are being built each year. Meanwhile, regulations can add $233,000 to the cost of a new home in Hawaiʻi, making it even harder to build new homes. It all comes down to supply and demand. Demand has been outpacing supply for decades, adding even more fuel to create this housing emergency.
Q: How will more housing help?
Demand for housing in Hawaiʻi greatly outweighs housing supply, which creates housing scarcity and increases the cost of housing. A 2019 report by the Hawaii Housing Finance and Development Corporation (HHFDC)found that the State needs approximately 10,000 new housing units per year to begin addressing the historical housing shortfall, but only 4,000 new units on average are currently being constructed each year. Through suspending onerous regulations and modernizing and streamlining the development processes, the proclamation will shorten development timelines, thus increasing the supply of units and helping to make housing more affordable for our people.
The Proclamation Relating to Affordable Housing
Q: How does the Proclamation define affordable housing?
The Fifth proclamation defines affordable housing as housing that is offered to applicants who earn 0% to 140% of the area median income (AMI). Affordable housing projects may include mixed-use projects, or mixed-income projects where 60% or more of the project’s housing units meet the definition of affordable housing.
Q: Why was 140% of the area median income (AMI) chosen as the threshold for affordable housing?
The U.S Department of Housing and Urban Development (HUD) and the HHFDC, which provides critical financing to affordable housing projects, sets a 140% AMI threshold across a number of programs and financing mechanisms. This threshold allows housing to be built for Hawaiʻi’s workforce, including nurses, firefighters and teachers who earn too much money to qualify for traditional public housing that targets extremely low-income and low-income populations, but they also earn far below the $252,000 a year to afford a mortgage for the median-priced home in Hawaiʻi.
Q: What does an Emergency Proclamation Relating to Affordable Housing do?
The Proclamation is a state initiative that creates a process to promote the expedient development of affordable housing, creating more housing options for Hawaiʻi residents.
Q: How long will the emergency proclamation be in place?
Governor Josh Green anticipates that the emergency proclamation will be in place until the end of 2024.
Q: Can the proclamation be amended or changed?
Yes. The proclamation can be updated at any time and must be re-signed by the Governor every sixty days.
Q. What were the prior proclamations related to housing issued by the Governor?
On July 17, 2023, the Governor issued the Proclamation Relating to Housing that declared an emergency due to the lack of housing for the people in Hawaiʻi. Additionally, on September 15, 2023, the Proclamation Relating to Affordable Housing was issued that clarified the emergency related to the lack of affordable housing for Hawaiʻi residents. The Proclamation Relating to Affordable Housing was reissued on October 24, 2023, December 22, 2023, and January 18, 2024.
The Fifth Proclamation Relating to Affordable Housing expands the definition of affordable where developers must now produce 60% of their units at 140% or less of the area’s median income — instead of the previous 50% plus one — to qualify for exemptions and waivers under the EP. This will add hundreds of additional affordable housing units to be built each year.
The latest EP also suspends certain state fees and taxes for affordable housing projects such as the school impact fees and general excise taxes as well as county fees such as park dedication and wastewater fees. Finally, the EP concludes the Build Beyond Barriers (BBB) Working Group, transferring the certification process management to the HHFDC.
Q: Are there areas where this proclamation does not apply?
The Proclamation does not apply to the areas affected by the Lahaina wildfire, as indicated by an attached map in the Fifth Proclamation Relating to Affordable Housing.
Q: What types of properties and developments are excluded from the proclamation?
The proclamation does not cover individual single-family property owner development or luxury homes.
Q: What has been updated across different versions of the Proclamations Relating to Affordable Housing?
The Sixth Proclamation Relating to Affordable Housing, signed on April 19, 2024, is a continuation of the preceding proclamation with no significant changes.
The Fifth Proclamation Relating to Affordable Housing, signed on February 20, 2024, includes a number of changes to help affordable housing developers offset rising interest rates and increasing building costs brought on by inflation and supply chain disruptions. It achieves this by:
- Reassigning the affordable housing project certification process to the Hawaiʻi HHFDC;
- Waiving school impact, wastewater, and park dedication fees and General Excise Taxes (GET) for affordable housing projects that offer at least 60% of their units to applicants at or below 140% AMI; and,
- Allowing state and county projects to pursue an expedited 201H-38 process to receive entitlements faster.
The Fourth Proclamation Relating to Affordable Housing, signed January 18, 2024, was a continuation of the preceding proclamation with no significant changes.
The Third Proclamation Relating to Affordable Housing, signed December 22, 2024, expedited the affordable housing permitting process by:
- Allowing State and County housing and permitting agencies to fill vacancies and expand their staff without having to apply for a certification from the BBB;
- Suspending the traditional procurement process for both State and County housing and permitting agencies so they can hire third-party reviewers, private contractors, and other consultants to reduce their bottlenecks;
- Clarifying the BBB chair’s authority to limit oral testimony to agenda items and limits the amount of time each person gets to testify to give testifiers an equal amount of time; and
- Allowing developers to publish their public notice in the state Office of Planning and Sustainable Development’s “The Environmental Notice,” to fulfill their public notice requirements.
The Second Proclamation Relating to Affordable Housing, signed October 24, 2023, is similar to the preceding proclamation and introduces an amendment to Section 201(H)-38(a)(3) to allow State affordable housing projects that have already received approval from the Hawaiʻi Housing Finance and Development Corporation to proceed without the need for additional legislative or county approval.
- The Proclamation Relating to Affordable Housing, signed September 15, 2023, added “affordable housing” to the title. This change reiterated the focus of the BBB Working Group on pushing forward affordable housing development in Hawaiʻi;
The EP also:
- Excluded the area affected by the Lahaina wildfires, whose boundaries are marked by the state’s Lahaina wildfire map (See attached map). This change clarifies that the EP does not apply to the region of Lahaina. The rebuilding of Lahaina will begin only when the residents of Lahaina are ready and according to the timeline they choose;
- Reinstated the state Sunshine Law for BBB Working Group meetings. Meetings will be conducted in accordance with Sunshine Law and will be virtual, with testifiers to speak only on agenda items with a two-minute time limit to summarize their testimony;
- Restored HRS Chapter 6E relating to the Historic Preservation Law;
- Restored HRS Chapter 343 relating to Environmental Impact Statements; and
- Rescinded the exemption for projects larger than 15 acres and less than 100 acres from going before the state Land Use Commission for zoning and other approvals. After careful analysis, it was found that less than a handful of private real estate projects will benefit from this section of the EP.
Q: How do you apply?
The Hawaiʻi Housing Finance and Development Corporation implements and manages projects coming in for waivers and exemptions under the Fifth Proclamation Relating to Affordable Housing. Contact [email protected] for more information.
Q. What is the reason for having separate processes for affordable state and county housing projects and private projects?
We have two separate processes for these types of affordable housing projects 1) to identify and plan how our state and county agencies will work through the crisis and 2) to provide a framework to support the housing efforts by private developers.
State agencies like the HHFDC, the Hawaiʻi Public Housing Authority (HPHA), the Department of Hawaiian Home Lands (DHHL), and the Hawaiʻi Community Development Authority (HCDA) as well as county housing agencies are directly responsible for developing and preserving affordable housing for Hawaiʻi residents. They operate through boards, legislative oversight, and/or commissions of volunteer leaders. They focus on making housing more affordable and accessible for low-income and moderate-income individuals, families, and Native Hawaiian beneficiaries.
We also know that the private sector plays a critical part in expanding affordable housing options in Hawaiʻi and are facing rising challenges in the current interest rate environment. This means that all affordable housing efforts, whether from the state or other sources, fit into our overall plan to address the housing emergency effectively.
Ensuring Affordability of Housing Units
Q: What measures are you taking to ensure that housing units built under this proclamation remain affordable?
This will vary project by project. For example, a vast majority of the 10,000 homes to be built under the HPHA’s Ka Lei Momi redevelopment of Hawaiʻi’s public housing stock will remain affordable for low-income tenants for many generations. The project will include 7,500 low-income rental units for families earning zero to 60 percent of the area’s median income, another 3,000 units for families earning between 80 percent and 100 percent of the area’s median income and 1,000 units which will be sold on a leasehold basis with 99-year leases.
Hawaiʻi’s Reserved Housing program comes with a few restrictions. Homeowners must agree to live in their new condominium for a minimum time period and, if they sell the unit, they are required to share some of the increased equity on the unit with the state, which is then put back into the reserved housing program to develop more affordable housing.
Financial Incentives and Implications
Q: Does the emergency proclamation include any financial incentives?
A: The proclamation suspends certain fees and taxes for housing projects so long as 60% of its housing units are offered to those at or below 140% AMI or are Hawaiian homesteads as administered by the Department of Hawaiian Home Lands. The fee waivers and exemptions include:
- Administrative exemption from the General Excise Tax (GET);
- Administrative waivers from school impact, wastewater, and park dedication fees.
The Build Beyond Barriers Working Group
Q: What was the Build Beyond Barriers Working Group (BBB)?
The BBB was a working group established under the first Proclamation Relating to Housing and the first Proclamation Relating to Affordable Housing comprised of city, county, and state agencies that review or approve housing plans, permits, and related applications, and community stakeholders. The BBB was designed to bring together stakeholders to identify challenges in affordable housing development.
The BBB successfully served its purpose—where lawmakers have since introduced numerous bills codifying key provisions of the Proclamation. The certification process for affordable housing projects was transferred to HHFDC, which is uniquely positioned to execute the EP with its expertise in affordable housing development.
Contact Information
Q: I still have a question, who can I contact?
You can reach out to our team at [email protected] for more information.