A Transit-Oriented Housing
Strategy
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
Housing Mosaic
Capital
Wage
Market Income
Demand
Labor
Public
Policy
Materials
Land
Job
Growth
Regional Approach
Goal: Increase Workforce Housing near Transit
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
Source: The Center for Transit-Oriented Development
Breaking the Cycle of Unintended Consequences
in Transit-Rich Neighborhoods
Market Trends
Construction Costs Comparison
Source: Rider Levitt Bucknall
Workforce Housing
Source: Center for Housing Policy, 2009 Housing, Rents, and Income Data
Average Hourly Earnings, Selected Industries
35.00
30.00
2005
25.00
2006
20.00
2007
15.00
2008
2009
10.00
5.00
0.00
Source: Hawaii State Data Book, 2009
Distribution of Honolulu Household Demand vs. Supply
by HUD AMI Levels
> 180% AMI
100.0%
12.3%
23.6%
80.0%
60.0%
7.4%
11.7%
58.7%
13.8%
25.6%
13.1%
40.0%
20.0%
0.0%
10.0%
20.3%
18.0%
3.7%
Single Family
Demand
9.6%
8.5%
8.9%
30.3%
141 - 180% AMI
121 - 140% AMI
81 - 120% AMI
51 - 80% AMI
20.9%
10.5%
7.4%
1.9%
0.4%
0.1%
Single Family Supply
21.8%
8.5%
10.2%
Multi Family
Demand
31.4%
8.5%
2.9%
Multi Family Supply
30 - 50% AMI
< 30% AMI
Combined Housing and Transportation Costs
% of Household Income
70.0%
60.0%
50.0%
20.4%
18.6%
40.0%
21.3%
21.5%
21.0%
21.4%
22.6%
15.0%
Housing
30.0%
20.0%
35.0%
32.0%
28.6%
26.3%
10.0%
33.0%
27.0%
32.2%
29.2%
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Source: http://htaindex.cnt.org
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H
Transportation
Definitions
• Affordability – Pay no more than 30% of Gross
Monthly Income. Housing meets needs of
households
• Area Median Income – At 100% of AMI, half
residents earn below that amount and half
above
• Very Low Income - <30% of AMI
• Low Income – 30% to 59% of AMI
• Moderate Income – 60% to 79% AMI
• Middle Income – 80% to 120% of AMI
Market Trends
• New real estate development in Honolulu is challenged by high
construction costs which result from:
– Strong labor unions and associated high cost of labor
• Although recent declines in construction activity have reduced labor rates –
military construction projects continue to support Oahu’s relatively high
construction wages
– High cost of land
• Approximately 1% of Hawaii’s land is developable;
• The supply of developable land is constrained by:
– Mountains
– Military owned lands
– State of Hawaii owned lands
– Privately-owned lands
– Premium cost of materials which usually must be imported
• Hawaii does not have plentiful natural resources that are generally used in
traditional building materials
– Other factors
• Expectation that developers pay for infrastructure upgrades
• Length of time required for permit and entitlement review timeline
• Zoning considerations (i.e. green space and parking requirements)
Factors That Affect the Amount of Travel & Modal
Choice
Automobile
Transit
Cycling &
Walking
Out-of-Pocket
Costs
Fuel & Maintenance
Roadway Tolls
Parking Fees
Transit Fare
Maintenance
Time Costs
Driving
Parking Search
Walking
Walking
Waiting
Riding
Riding
Walking
Service
Attributes
Effort
Safety
Comfort
Effort
Safety
Comfort
Effort
Safety
Comfort
Short & Long-term Effects of Transportation
System Improvements
Work and non-work travel
(frequency, destination,
Short-term decisions
mode)
Transportation
Automobile ownership
improvement
Mode to Work
Employment location
Residential location
Infrastructure investment
Medium-term decisions
Long-term decisions
Potential Livability Benefit Outcomes associated
w/TOD
Downtown &
Neighborhood
Rejuvenation
Metropolitan
Sustainability &
VMT Reduction
Social Equity for
Jobs &
Housing
Economic
Growth with
Environmental
Quality
TOD 3.0
1. Route Alignment
2. Station Location
3. Station Area
4. Land Assemblage
5. Infrastructure
6. Vertical Development
7. Livability Benefits
Challenge: TOD Housing Difficult,
Time-Consuming, and Expensive
 Land Prices
 Land prices around station are likely to increase because of speculation when a new transit
line is planned
 Affordable and workforce housing developers lack the capital to acquire land before the
prices go up and hold it until ready to be developed
 Financing
 Funding for workforce housing is limited or too restrictive
 Mixed-income and mixed-use projects require complex financing structures involving
multiple sources of funding
 Timeline
 Sites often require land assembly and rezoning, leading to lengthy acquisition and
permitting process
 Community opposition to density and affordable housing can be challenging
 Development near transit requires collaboration among the public, private, and non-profit
sectors , which can be difficult to coordinate given the different needs, constraints, and
schedules
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
Source: Center for Transit-Oriented Development
Housing Challenges
1. Affordable housing and rental housing, both have
negative connotation – NIMBY’s.
2. Typically, projected market rents do not support
new multi-family (rental )construction;
3. Hawaii is dominated by service-sector industries,
whose average employee wage scales do not
support the purchase of housing (for-sale)
4. The majority of employer assisted housing
programs focus heavily on demand-side (for-sale)
programs.
PARTNERSHIP
APPROACH:
Collective, long-term, sustained, and
strategic investments
are needed in order to produce
important community development
outcomes. In addition to brokering a
common agenda, these partnerships
are building the capacity of
community-based groups and other
stakeholders to ensure strong local
leadership. These coalitions help
increase the flow of resources into
neighborhoods, define and execute
market-based strategies, and
develop new approaches to creating
and seizing neighborhood
development opportunities.
aggressive
land
assembly
partnership
approach
regional
connections
housing
development/
rehab tools
targeted
neighborhood
planning
economic
development
sophisticated
market
analysis
marketing
neighborhoods
procedures
that measure
impact
Community Challenge Planning Grant
$40 million total – Honolulu receieved $2.3m max grant + 20% match) to:
Foster reform and reduce barriers to achieving affordable, economically vital,
and sustainable communities.
• Development of master plans or comprehensive plans that promote
affordable housing co-located and/or well connected w/retail,
businesses..aligned w/..transportation plans;
•Development & implementation of plans and strategies that promote
livability and sustainability;
• Revisions to zoning codes, ordinances, building standards, or other laws to
remove barriers…..;
•Revisions to building codes to promote …energy efficiency….;
•Strategies for creating or preserving affordable housing for low, very-low,
and extremely-low families or individuals….;
•Strategies to bring additional affordable housing to areas that have few
housing opportunities….;
•Planning, establishing, and maintaining acquisition funds and/or land
banks for development, redevelopment, and revitalization for the
development of affordable housing
Goal: Increase Workforce Housing
Along the Rail Corridor
1. Truly Affordable Housing
– Pairing lower housing costs with lower transportation
costs
2. Broadening Access To Opportunity
– Producing better economic and social outcomes
3. Increasing Employers’ Access To Metro Workforce
– Improving economic competitiveness and productivity
4. Stabilizing “High-Percentage” Riders
– Increasing transit access to populations who will use it
the most
5. Alleviating Gentrification Pressures Near Transit Stations
– Counterbalance the potential displacement of existing
workforce housing
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
Build On Multiple State, Local Housing Studies
 2008 Comprehensive
Housing Strategy for the
C&C of Honolulu, Mayor’s
Affordable Housing
Advisor Group
State-level Recommendations
 Change purpose of the Land Use Commission to
long-term planning
 Modify Low Income Housing Tax Credit allocation and
requirements
County-level Recommendations
 2008 Report of the
Governor’s Affordable
Housing Regulatory
Barriers Task Force
 Establish county-level Office of Housing and provide
a single government point-of-contact for housing
development (Ongoing)
 Increase long-range housing planning capability at
DPP
 Streamline the entitlement process to reduce length,
cost
 Nine additional studies and
reports conducted between  Revise rules for Unilateral Agreements to 140% of
AMI, transfer/sale of housing credits, and
1991 and 2006 by federal,
enhancement credits. (Complete)
state, and local agencies
 Fee-based expedited third-party review by private
consultants (Complete)
 Plan/budget for infrastructure investment with
Honolulu High-Capacity Transit Corridor Project and
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
TOD
Strategies
1. Focus on creating mixed-income workforce
housing opportunities near transit .
2. Engage employers and employee unions to
expand employer assisted rental housing
programs;
3. Focus on preservation of existing housing units
and; opportunities for acquisition and
rehabilitation/adaption of existing structures;
4. Actively pursue modifications to state and local
regulatory policies to reduce impediments to
create more affordable, energy-efficient housing.
Integrated, Targeted Approach for TOD Housing
Planning and Zoning
Financing
Inclusionary Zoning
Expedited Permitting
Reduced Parking Requirements
Modify Unilateral Agreements
Land Acquisition/Banking Fund
Pre-development Financing
Gap Financing
Preservation/Rehabilitation Financing
Modify LIHTC criteria
Incentives
Coordination
Density Bonus
Impact Fee Waivers
Property Tax Waiver
Tax Abatement
TOD Housing Coordinator
Public-Private Partnerships
Value Capture Tools For Infrastructure
Programming Capacity
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
TOD Fund Structure and Activities
• Enhance impact, funding through collaboration
– Use HUD funding for “top loss” or lead equity capital
– Identify fund manager and define transactional role
– Provide start-up support while structuring the fund
– Create governance agreement to guide fund mission and
mechanics
– Solicit partners to build “capital stack” and mitigate risk
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
Land Acquisition/Banking Fund for TOD
• Buy and hold strategic parcels before the real estate market
heats up to control development later and ensure it meets
community development goals
• Do catalytic projects to help “jumpstart” markets and help
transition auto-oriented places into compact, walkable,
transit-oriented places
• Ensure that existing affordable housing is preserved and
new affordable housing is created—along with other
important amenities—in valuable transit-rich locations
• Target small projects where preservation/development of
affordable housing units is possible
Source: Center for Transit-Oriented Development
Land Acquisition/Banking Fund for TOD
Case Study:
Case Study:
Denver Transit-Oriented
Development Fund
Portland TOD Property
Tax Abatement

$15m credit facility focused on
preserving and creating affordable
housing with access to transit
 Supports TOD by reducing operating
costs through a 10-year maximum
property tax exemption

Public-private partnership with
Enterprise Community Partners
and the Urban Land Conservancy
 Applies to newly-constructed
structures, additions or conversions
within ¼ mile of transit

Provides capital for non-profits to
leverage for purchase, operation,
and rehabilitation of affordable
housing
 Minimum of 10 units, 20% at 60
percent of AMI, 10% at 30 percent of
AMI

100% Loan to Value Ratio, 5-year
hold on property, and risk mitigation
with “top loss” pool
Creating A Transit-Oriented Workforce Housing Strategy for Honolulu
 Sponsor must own or have site
control and demonstrate exemption
necessary for financial feasibility
 Annual cap of $20m for 3 years
Denver Transit-Oriented Development
Fund
City &
County
Of Denver
Enterprise
Communities
Housing
Finance
Authority
&
Foundations
Capital
Sources
Capital Stack or Waterfall
Manager
Commercial
Enterprise
Lenders
Communities
Bridging
Foundations
the Gap
Local Government
CHFA
Senior Debt
CDFI
Fund
DURA
DHA
Borrowers
Urban Land
Conservatory
Take-out Financing
Joint Venture Structure
CDC
• Affordable
Housing
Operator/
Manager
•Workforce Placement
•Social Services
Private developer
•Land owner
•Conceptualization
•Financing
•Entitlements
•Construction
•Operations, Leasing &
Management
City & County of
Honolulu
•Planning & Zoning
•Permitting
•Community Outreach
•Affordable housing
•Transportation
•Infrastructure Financing
City & County
Private Developer
of Honolulu
Market-driven
Maximize community benefits
Infill
Minimize environmental impacts
Mixed-use
Provide services
Proximity to transit
Protect public health & safety
• Return on Investment
• Minimize risk
• Create long-term
value
Community Needs
•Mixed-income,
•affordable housing
•Neighborhood services
•Job creation
•Social & economic
equity
•Infrastructure
GAP
Creating the Implementing Entity – a
local CDC
• The term CDC refers to a type of non-profit entity known as a
"community development corporation". CDC’s are characterized by
their community-based leadership and their work primarily in housing
production and/or job creation. This is what differentiates them from
other types of non-profit groups.
• CDC’s are formed by residents, small business owners, congregations
and other local stakeholders to revitalize a low- and/or moderateincome community. CDC’s typically produce affordable housing and
create jobs for community residents. Jobs are often created through
small or micro business lending or commercial development projects.
Some CDC’s also provide a variety of social services to their target area.
• A CDC is organized under section 501 (c) (3) of the Internal Revenue
Code like any other non-profit entity . Local residents form the CDC getting together and developing a set of by-laws, file for incorporation
with the state government and apply to the federal Internal Revenue
Service (IRS) for designation as a tax exempt non-profit organization.
The IRS designation is necessary in order for the organization to obtain
grants and gifts from any government, corporate, or foundation sources
or from individuals.
Roles & Responsibilities
EDA
SBA
Consultants
•Organization
•Development
•Financing
US Treasury
•LIHTC
•NMTC
HUD
• HOME
• CDBG
• Sec 108
Private Lenders
•Banks
•REIT’s
City & County of
Honolulu
• Community Services
•Economic Development
•Planning & Permitting
Private Entities/
Foundations
•LISC
•Enterprise Foundation
•NeighborWorks
•Living Cities
CDC
• Affordable Housing
•Wealth Building
•Community Transformation
•Asset Management
Roles & Responsibilities
Consultants
•Organization
•Development
•Financing
City & County of
Honolulu
Expertise
• Community Services
•Economic Development Oversight
•Planning & Permitting
Private Entities/
Foundations
•LISC
•Enterprise Foundation
•NeighborWorks
•Living Cities
CDC
Limited
Liability
Partnership
Vision
Neighbor
Management
- hood
Investment partners
residents
Shareholders