Affordable Housing on Oahu

Updated 3/8/20

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

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

  • 30% or less - 5,400
  • 30% to 50% - 4,350
  • 50% to 60% - 2,209
  • 60% to 80% - 3,289
  • 80% to 100% - 2,884
  • 100% to 120% - 1,870
  • 120% to 140%* - 2,500

*140% Area Median Income (AMI) on Oahu in 2019 is $118,160 for a family of one, $134,960 for a family of two, and $168,700 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:

  • Use Suitable and Available Lands. The plan mapped approximately 10,688 acres of state, county, and private lands that would be suitable to develop or redevelop housing for low- and moderate-income families. 40% of the lands were on Oahu, 22% on Maui, 30% on Hawai‘i Island, and 8% on Kaua‘i. 
  • Preserve the Environment. Development will not occur in many areas of the islands in order to ensure Hawaii’s natural beauty remains.
  • Transit-Oriented Development (TOD). Expect new mixed-use development along the 20-mile Honolulu rail line. Much of this land is currently underutilized and owned by the state or county. Development plans include more housing options for low-income families, seniors, and single professionals, walker- and biker- friendly paths, green spaces, commercial centers, community services, job opportunities, and more – creating convenient work-live communities at the rail stops. Neighborhood TOD plans have been developed for the following areas: East Kapolei, Waipahu, ‘Aiea-Pearl City, Halawa/Aloha Stadium, Airport Area, Kalihi, Downtown, Kaka‘ako, and Ala Moana.
  • Mixed-Income Development. As witnessed in the transforming Kaka‘ako neighborhood, affordable housing development in Hawai‘i has been typically financed and constructed by private companies and allocates housing units for a variety of incomes. For example, 690 Pohukaina sold units for households making 60% AMI and 140% AMI. Mixed-income development seeks to ensure a positive quality of life for all Hawaii residents and specifically has a goal of supporting “special needs groups including persons with disabilities, frail elderly and the chronically homeless.”
  • Land Use and Zoning Regulations. The plan seeks to streamline and expediate regulatory burdens to spur affordable housing development. It recommends re-examining and eliminating duplication of land use and zoning regulations along with further coordination between various state and county agencies involved in the processes.
  • Find Funding. The plan recommends a few methods to fund affordable housing, including private-public partnerships, public financing programs, legislative funding for a Rental Housing Revolving Fund (RHRF) and a Dwelling Unit Rental Fund (DURF), and tax exemptions for certain affordable housing programs.

The Progress:

From December 2014 to June 2018, the state had built 5,300 new homes, including 2,000 affordable homes. According to the Hawaii Housing Finance & Development Corporation, 433 affordable units were under construction in June 2018, and 5,946 units were in the pipeline/pending phase, of which 5,235 were affordable.

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 Hawai‘i needs. I challenge the community, developers, the construction industry and the banks to all come together and build the housing units that we need.”

How to Find Affordable Housing on Oahu:



Frequently Asked Affordable Housing Questions (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.

Sometimes the developers have their own requirements beyond HHFDC’s above requirements.

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.

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.

What is the 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).

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.

How can I apply for affordable housing?

Speak to your real estate professional or check the HHFDC site for the latest affordable housing listings. Applications are typically made via the developer, who typically has an exclusive real estate brokerage firm.