Honolulu mayor's office outlines rail‑area redevelopment, new housing finance proposals and plan to consolidate housing functions

The Mayor's Office of Housing presented an update Wednesday to the Honolulu City Council Committee on Housing, Sustainability, Economy and Health on a draft city housing plan that focuses on activating transit‑oriented development around Cooley Station, expanding financing options to build more housing at multiple income levels, and reorganizing city housing functions into a proposed Department of Housing and Land Management.

Kevin Oje, executive director of the Mayor's Office of Housing, told the committee the plan "builds on previous reports" and lays out strategic priorities and measurable steps to increase housing production, noting high local housing costs including a "$1,100,000 median home price" and "median rents approaching $2,000." He said the plan aims to concentrate growth near rail stations and to use public land to spur development.

The plan highlights the Cooley Station redevelopment area — described in the presentation as roughly 20 acres bounded by Dillingham Boulevard, South King Street, Evollet Road and Cooley Street — as the immediate priority for a mixed‑use, transit‑oriented district. The city has acquired several parcels there, including a First Hawaiian Bank branch (closed December 2023) and the Veil Center property (closed January 2024). The presentation said city land holdings amount to about 42% of the redevelopment area and combined state and city holdings reach about 75% of the site, creating a "unique opportunity" for coordinated redevelopment.

The office said preliminary modeling from the Center for Creative Land Recycling (CCLR), provided through EPA technical assistance, indicates the site could "conservatively support 1,500 to 2,000 housing units." CCLR's analysis also supported the city's successful grant applications: a state CIP planning award of $700,000 (up from an applied $200,000) and a Federal Transit Administration planning grant of $2,000,000, which the office says together provide $2.7 million for planning and connectivity work in the area.

The administration listed near‑term procurement steps: an RFQ for a first portfolio of city properties (including 1615 Ala Wai, 1421 Pensacola, 130 Baratonia and Enner Road) was expected to be posted the week following the briefing; an RFQ for an Evollet/Veil Center development partner is scheduled for Jan. 25; and additional RFQs and consultant RFPs will be staged through 2025. The office projected master planning work to conclude in 2026, environmental and historic reviews (EIS/NEPA and preservation) by 2027, and entitlements and permits for the Veil Center redevelopment by 2028 with a first‑phase groundbreaking in 2028.

On financing, the office outlined limits of current subsidy tools and proposed exploring multifamily taxable revenue bonds as an alternative to expand capacity beyond the State's private activity bond (PAB) allocations and low‑income housing tax credits. The presentation said the statewide PAB cap in 2024 was about $378 million, with Honolulu's share roughly $142 million, and that typical PAB allocation activity on Oahu has supported roughly 350–400 units per year. The office noted two PAB financings scheduled to close in April–May 2025 (KPT and West Loch), totaling about $140 million and supporting roughly 430 units.

To reach middle‑income housing needs, the office described a model drawn from Montgomery County, Maryland: issuing taxable multifamily revenue bonds to provide low‑cost construction equity, combined with construction loans and local credit enhancement. The office said revenue bonds would not count against the city’s debt ceiling because they would be secured by project assets rather than the city's full faith and credit. The presentation noted legal and charter constraints on using the city's Affordable Housing Fund as a pledge for revenue bonds and said the city is discussing alternatives with bond counsel and the Hawaii Housing Finance & Development Corporation (HHFDC), including whether HHFDC's Rental Housing Revolving Fund could provide the comfort bond investors seek.

The office described the Affordable Housing Fund (derived from one‑half of 1 percent of property tax collections) as the city's most flexible resource, generating "approximately a half to $9,000,000 a year," and said it currently supports projects restricted at 60% area median income (AMI) and below for 60 years. The presentation said the office has an $8 million award pending and expects a $5 million RFP to post the following week.

On organizational change, the mayor has proposed consolidating housing functions into a new Department of Housing and Land Management (DHLM). The office told the committee the plan is structured into six divisions (administration; housing development; housing finance; housing policy; property and asset management; and land transactions), would employ about 51 positions overall, requires four new positions in the budget, and is currently in union consultation with a resolution prepared for council consideration after consultation concludes (the office said union consultation was due Jan. 17). The office said three key positions in the proposed structure would be appointed: director, executive director and deputy director.

Council members asked for details about staffing, the role of the Department of Planning and Permitting (DPP) after reorganization, property management oversight, use of the Affordable Housing Fund, and potential charter amendments needed to implement the proposed bond structure. Councilor Tom Okimoto praised the proposal to centralize housing functions and asked that the administration consider unlocking long‑standing, underused funding sources. Vice Chair Cordero asked the office to confirm the Affordable Housing Fund's AMI target and size. Oje/Auger answered questions on timelines for RFQs and emphasized the administration’s intent to move from planning into execution: "The city and County must take a more direct and active role in the development, financing and execution and delivery of affordable housing," the presentation quoted.

The committee did not take formal votes during the briefing; members requested recurring one‑page updates tracking the 10 properties the office intends to solicit in 2025 and asked the administration to return with further details on financing options, draft procurement documents and the finalized housing plan, which the office plans to publish as Mayor’s Message No. 5 by Jan. 31, 2025.

The briefing provided timelines, funding assumptions and legal constraints the city will need to resolve before construction; it also flagged environmental contamination, possible flood susceptibility and sea‑level‑rise risk in the Cooley Station area as issues that will need remediation and mitigation as part of master planning and eventual development.