Ash Center: Trouble in Paradise – Hawaii’s Affordable Housing Conundrum

December 7, 2010
Ash Center: Trouble in Paradise – Hawaii’s Affordable Housing Conundrum
Jim Secreto with the Director and Deputy Director of Honolulu's Department of Planning and Permitting

HKS Student Helps Honolulu Secure Grant in Transit-Oriented Development
By Kate Hoagland

With its picturesque island beaches, festive and colorful luaus, and a summery climate year round, many view Hawaii as the ultimate tropical paradise. “There is no question that Hawaii is a beautiful place,” said Jim Secreto, HKS MPP 2011. “But the experience that tourists have while visiting Hawaii masks the very real, day-to-day struggles of the people that live there.”

Secreto explored issues of affordable housing and transit-oriented development for the city of Honolulu this past summer as an Ash Center Summer Fellow in Innovation. His work with a team of dedicated staff resulted in the city securing a $2.3 million joint grant from the U.S. Departments of Transportation and Housing and Urban Development to further improve transit-oriented development in the region.

“This is wonderful news for our community, and it reflects the hard work and cooperation of many people,” said Honolulu Mayor Peter Carlisle in a recent press release. “We are committed to making sure rail transit and transit-oriented development projects are done right, and this grant will be a big help.”

Third Most Expensive Home Ownership Market in the U.S.
According to Secreto, living the American dream in Hawaii’s tourist-driven economy is often much more difficult for the average Hawaiian. The state has the third most expensive home ownership market in the U.S., just below the New York City neighborhoods of Manhattan and Brooklyn. Land is at a premium in Hawaii—over 900,000 residents live on the Island of Oahu where Honolulu is located, an area half the size of the full state of Rhode Island. Median home prices far exceed the necessary salaries to pay such prices, forcing many area residents to find more affordable options far outside of the city with long commute times to work.

According to the city’s 2008 High-Capacity Transit Corridor Environmental Statement, residents struggle with some of the worst commute times in the country—peak-travel can take up to 47 percent longer than most cities due to high traffic congestion. Moreover, housing and transportation costs make up nearly half (45 percent) of the living expenses of most Honolulu residents.

“How is the person that is cleaning your hotel bedroom or serving you drinks at the Waikiki bar going to live the American Dream?” said Secreto. “That’s where the rail corridor can provide opportunities.”

The Elements of a Winning Grant Application
Honolulu has recently broken ground on a high-capacity rail corridor transit project to be completed in 2019 which would build 20 miles of rail lines connecting the western side of the island to the city center. By 2030, the majority of Honolulu’s jobs and population are expected to be along this corridor. With the rail project underway, the city of Honolulu has taken this timely opportunity to evaluate ways to make the city more livable for its residents. As part of this effort, Secreto and his colleagues’ winning grant application requests funding to improve Honolulu’s economic competitiveness by increasing opportunities for affordable housing and public transport.

The application outlines several activities that the grant funds:

    • A newly-created consultant would enhance coordination and collaboration between the public and private sectors to streamline regulatory processes and foster improvements in zoning and financial credits.
    • The grant also proposes authoring a strategic plan on how to build or increase affordable housing near the transit lines. The plan would look at renovating existing properties, reclaiming vacant properties for adaptable reuse, and building new housing.
    • Most importantly, the grant establishes the framework for a catalytic demonstration project. Local developers, nonprofits, and financial institutions would collaborate to map out the feasibility of building affordable housing along the transit line. Such a project would show how creative public and private partnerships could not only reduce the development time, but also cut the overall cost of development. Innovative tools such as low-income tax credits, affordable housing subsidies, and expedited permitting could be evaluated as alternative means for cutting costs.

From the Real World to the Classroom
For Secreto, his Summer Fellowship in Innovation taught him much about how to innovate at a local level and how possible it is for cities to improve the lives of their citizens. “I think my overlying takeaway was that you can make an impact in your community and that can be transferable anywhere,” said Secreto. “I would not have had this experience without Ash. Not only is the grant going to have amazing consequences for the people of Honolulu, the experience is also shaping my own career path.”

Secreto’s work kicks off an ongoing relationship between the city of Honolulu and the Ash Center. Harvard Kennedy School students are encouraged to apply for Policy Analysis Exercises (PAE) in the spring semester to assist with the city of Honolulu’s transit-development work.