The state Office of Hawaiian Affairs has rekindled an effort to undo a ban on residential use of land it owns in Kakaako, but with a new twist aimed at swaying past opponents and a majority of state lawmakers.
OHA, a state agency created to benefit Native Hawaiians, has drafted a bill that proposes allowing some residential use in Kakaako, makai of Ala Moana Boulevard, with a caveat that more than 50% of all resulting homes be reserved for Hawaii resident households that don’t earn over 140% of Oahu’s median income.
Furthermore, buyers of the reserved homes would have to be owner-occupants, and a preference would be given to those who work within 5 miles of the area in “essential” fields that include education, health care, law enforcement, hospitality and construction.
Less than half of what could be 1,000 to 2,000 homes on much of the 31 acres OHA owns in what is known as Kakaako Makai would be market-priced housing, according to the plan.
Proceeds from market-priced home sales would help the agency pay for other components of its development plan in the area, including a Hawaiian cultural center and public waterfront promenade along the Ewa edge of Kewalo Basin Small Boat Harbor.
Kai Kahele, a former state and federal lawmaker who won a seat on OHA’s board of trustees in Hawaii’s Aug. 10 primary election and then became board chair, briefed members of a state House of Representatives committee Monday on the agency’s new Kakaako Makai plan.
Kahele framed the new push, which follows more than a decade of unsuccessful OHA attempts to permit residential use in Kakaako Makai, as helping the state end a chronic affordable-housing shortage.
“OHA wants to be at the table to contribute to (solving) a crisis in this state, which is the lack of workforce housing, a lack of affordable housing,” Kahele told the House Finance Committee. “We feel that it is a strong message that the state and OHA can send together that we want to create workforce housing in the urban core that is affordable to local families that are part of the state’s essential workforce that we need to keep here.”
The draft bill also states that even the proposed market-rate homes would be only for owner-occupants.
“We’re not creating workforce housing, or housing period, for out-of-state investors,” Kahele said.
OHA officials plan to present the new Kakaako Makai plan at a community meeting scheduled to begin at 6:30 p.m. today at the Harry and Jeanette Weinberg Ho‘okupu Center next to Kewalo Basin Park.
Developing parts of the man-made peninsula comprising Kakaako Makai has been under the governance of the Hawaii Community Development Authority, a state agency, for more than four decades.
During much of this time, housing had been a permitted use on portions of the roughly 200-acre peninsula, which was once a city dump and later covered by a waterfront park and commercial uses including warehouses, base yards, ship repair facilities, office buildings, a children’s museum and the University of Hawaii medical school.
The Legislature in 2006 passed a law to prohibit residential use in the area to block a private project on public land solicited by HCDA aimed at enlivening use of the area.
That project, by Honolulu-based Alexander &Baldwin Inc., included three condominium towers clustered on one inland lot, a hula amphitheater, restaurants, stores, a farmers market, a public waterfront promenade and a pedestrian bridge spanning the Kewalo Basin harbor channel.
Community activists, including residents in mauka Kakaako condo towers, surfers and park users participating in grassroots organizations Save Our Kakaako and Friends of Kewalos, lobbied lawmakers for a residential development ban.
A&B withdrew its plan after a near-unanimous final legislative vote, and HCDA urged then-Gov. Linda Lingle, a Republican, to veto the bill so as not to restrict future redevelopment potential. Lingle did not issue a veto, and the ban became law without her signature.
Six years later, in 2012, OHA agreed to a state offer approved by the Legislature to take ownership of 31 acres of Kakaako Makai land in lieu of $200 million to partially settle claims over unpaid revenue generated from former Hawaiian crown lands, referred to as ceded land.
OHA accepted the land with the residential use prohibition but also pushed at the time to lift the ban so it could maximize future development revenue used to help support programs for agency beneficiaries.
While the settlement was pending in 2012, the Senate passed a bill to allow residential development on two parcels intended for OHA, but the measure died in the House.
Later, OHA leaders publicly claimed that the agency was pressured to rush the settlement and that the $200 million appraised value for the land was overblown by more than double.
Yet several proposed bills since 2012 to allow residential development on at least some of the nine Kakaako Makai parcels owned by OHA have failed at the Legislature despite strong support in the Senate.
Much of this legislation died under the direction or heavy influence of longtime House member Scott Saiki, who represented Kakaako and had been House majority leader and then House speaker during OHA’s earlier bids to allow residential use in Kakaako Makai.
Saiki lost his seat in the Aug. 10 primary election to former state Board of Education member Kim Coco Iwamoto, and Rep. Nadine Nakamura (D, Hanalei-Princeville-Kapaa) became the new speaker of the House.
Now OHA is floating a new strategy for consideration by revamped House leadership and the rest of the Legislature.
“We think we have a better plan this time,” Kahele said at the House Finance Committee briefing.
Under the draft legislation, which is still subject to an OHA board vote to make it part of a bill package the agency submits to the Legislature, residential use is proposed for five of OHA’s nine parcels along with four blocks owned by Kamehameha Schools.
Two of the OHA parcels and four Kamehameha Schools parcels fronting Ala Moana Boulevard are proposed for 400-foot building height limits, up from HCDA’s existing 200-foot limit.
Two other OHA parcels fronting Kewalo Harbor, including the former home of Fisherman’s Wharf restaurant, are proposed for residential use under an existing 65-foot height limit.
The fifth OHA parcel, a lot shaped like a grand piano one block inland from the harbor front where OHA contemplates developing a hotel, is proposed for residential use under an existing 200-foot height limit.
Ron Iwami, founder of the Friends of Kewalos nonprofit that has opposed residential use in Kakaako Makai for two decades, said he and other board members want to hear more details about OHA’s new plan before taking a position on it.
“We’re going to listen and learn,” he said. “We’re being open-minded.”
Iwami praised Kahele for reaching out to the nonprofit to personally explain OHA’s new plan, but wants to hear more because some things in the draft bill appear vague. Iwami also expressed concern for relatively high income limits and prices for workforce housing units.
The income limit, which at 140% of the median is the top end for affordable housing under state regulations, equates to about $137,000 for a single person, $156,000 for a couple and $194,000 for a family of four. Maximum home sale prices tied to such incomes could range from roughly $500,000 to $720,000 under state guidelines and current interest rates.
Kahele told the House Finance Committee that he envisions homes aimed at households earning 80% to 120% of the median income instead of 140%.
“That is your typical (Department of Education) teacher married to a fireman, and they have a child or two,” he said. “That’s the model we’re looking at.”
The Legislature’s 2025 session is scheduled to begin Jan. 15.
