Affordable Housing on Oahu

Affordable housing is when housing costs are no more than 30 percent of a household’s income, according to the Hawaii Office of Planning and Sustainable Development.

By REAL. Updated May 20, 2023. | Real Estate | 10 min. read

If your household is making $100,000 per year after taxes, you would be spending $2,500 on rent or a monthly mortgage payment and utilities. However, with median single family home prices on Oahu at $1,100,055 and two-bedroom apartments renting on average for more than $2,500, “affordable housing” is hard to find in Hawaii.

The Problem:

Hawaii will need 64,700 new housing units to meet demand by 2025, with 70 percent of those units priced for households making less than 80 percent of the area median income (AMI), according to the Department of Business, Economic Development & Tourism’s study in 2015. Shown below is quantities existing affordable apartments in Hawaii.

The Goal:

Build at least 22,500 affordable rental housing units by 2026, as established by Act 127 in June 2016.

The definition of “affordable” varies, yet a generally-accepted guideline is that rent, including utilities, should not exceed more than 30% of gross monthly household income. The following is the breakdown of Hawaii’s targeted number of “affordable” units for each area median income (AMI) bracket:

Area Median Income - Number of Units to be Developed by 2026

*140% Area Median Income (AMI) on Oahu in 2022 is $93,380 for a family of one, $106,680 for a family of two, and $133,280 for a family of four, according to Hawaii Housing and Finance Development Corporation (HHFDC).

The Plan:

A Special Action Team on Affordable Rental Housing published a plan in June 2018, the Affordable Rental Housing Report and Ten-Year Plan, giving policy recommendations for the future:

The Progress:

Governor Ige said, “We now have the opportunity to really increase the supply of units and generate the types of affordable and workforce housing that Hawaii needs. I challenge the community, developers, the construction industry and the banks to all come together and build the housing units that we need.”

The State of Hawaii now has 26,293 affordable housing units in its total inventory, according to data in June 2022 from the Hawaii Housing Finance and Development Corporation. Where is affordable housing on Oahu, Maui, Kauai, and the Big Island? Here is a breakdown of how many affordable housing units are on each Hawaiian Island:

Despite the COVID-19 pandemic, construction continued in Hawaii, as construction workers were deemed essential. There are a number of planned affordable housing buildings that are already underway or might break ground soon, which will add to the affordable housing inventory in Hawaii:

How to Find Affordable Housing on Oahu:

In Hawaii, there are 358 housing complexes, whether they are buildings or other developments, that have affordable housing. Some of this housing is for elderly. Some are for families. Some qualify for federal public housing assistance while others qualify for state public housing. There is special needs housing and also some housing for labor or agricultural workers.



Timing is everything.

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Affordable Housing FAQs

What is affordable housing?

“Affordable housing” is a common term used to describe homes that are rented or sold at below-market rates, for which people typically must qualify based on the area median income (AMI).

On Oahu, affordable housing has become a popular term in the neighborhood of Kakaako, where developers have been required to offer a certain percentage of condominiums at an Affordable Housing rate. The Hawaii Housing Finance and Development Corporation (HHFDC) oversees all affordable housing in Hawaii, including financing and development of the affordable housing units.

Why should I consider buying Affordable Housing on Oahu?

The Affordable Housing program allows eligible and qualified applicants to purchase below market price, which means you could own and live in a new condo in the trendy neighborhoods of Kakaako or Ala Moana even if you are not a millionaire.

What are the income limits for affordable housing on Oahu?

Typically, buyers cannot have an income greater than 140% of the AMI for their respective household size. Some affordable housing buildings have a minimum income requirement as well.

How do you qualify for affordable housing in Hawaii?

Designated affordable housing units are offered to “qualified residents” through a public drawing system or lottery.

A qualified resident meets these requirements:

  • A citizen of the United States or a resident alien
  • At least 18 years old
  • Resident of the State of Hawaii and currently residing in Hawaii
  • Will physically reside in the unit to be purchased
  • Has a gross income sufficient to qualify for the loan to finance the purchase
  • Does not own a majority interest in fee simple or leasehold lands anywhere in the world.

These requirements will vary with each program.

What is the Shared Appreciation Program (SAE) program?

The Shared Appreciation Program (SAE) occurs when an owner sells an affordable housing unit after they have lived there for 10 years. A percentage of the sellers’ profit, which is disclosed at closing and never changes, is then due when the unit is sold, transferred, or rented.

The SAE percentage is calculated by subtracting the fair market value (FMV) by the purchase price (PP) and then dividing that answer by the original fair market value.

For example, a one-bedroom apartment has a fair market value of $500,000, but someone won the affordable housing lottery and purchased it for $400,000.

$500,000 - $400,000 = $100,000 $100,000 / $500,000 = 20%

20% is the SAE percentage when you sell. Therefore, if you sell for $600,000 in 10 years, you will have to pay $120,000 back to HHFDC ($600,000 x .2).

What is the buyback program?

The buyback program requires an owner to live in the newly purchased affordable housing unit as their primary residence for 10 years or for the duration of the program if it differs. If the owner can no longer occupy the unit or chooses to sell or transfer the unit in the first 10 years of their ownership, the HHFDC has the first right to purchase the unit. If an owner sells within the first 10 years, they will receive 1% appreciation plus any improvements, like a new kitchen upgrade, that they have done to the property. Some projects may have longer than a 10-year buyback restriction.

How much do I need to put down on an affordable housing unit?

Some Hawaii affordable housing apartments require deposits of 10% while others only require 5% down. These down payments are what the developer requires, but your loan officer may require a greater down payment to qualify for a loan.

How can I prepare to buy an affordable housing unit?

Like any Hawaii home purchase, it is important to get your finances in order. Ask a loan officer about your financial situation and what you can qualify for. Then speak to a real estate professional about buying affordable or market-rate housing.

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