HCDA pauses to deliberate Gentry request to apply off‑site reserve‑housing credits for Kaʻulu project

Honolulu — The Hawaiʻi Community Development Authority on Jan. 7, 2026, heard competing legal and policy arguments over a proposed amendment to a Kaʻulu development permit that would let Gentry Homes apply preexisting reserve‑housing credits from an earlier Waiākea Gardens project toward reserve units in a new third residential development.

HCDA staff recommended the board adopt a decision and order that would permit a first tranche of credit use (14 units) and a second tranche of 32 units effective only upon sale of 15 reserve units, shorten certain regulated terms and impose marketing, affordability‑study and semiannual reporting requirements. "The claim that the success and timely completion of the project rests on the application of reserve housing credits on a minority of units is a baseless argument," staff stated during its presentation, expressing skepticism that applying credits for a minority of units is necessary to complete the project.

Applicant counsel and Gentry Homes executives urged more flexibility. Quentin Machida, identified in the record as president and CEO of Gentry Homes, testified under affirmation that without the use of credits the company could accumulate a substantial unsold inventory and said carrying costs could force the developer to slow work. "As of without using any credits, in about a month, we would have 28 standing reserve homes, a market value of $19,000,000," Machida said, arguing the company needs the ability to seek additional relief if market conditions do not improve.

The two sides disputed several specific staff conditions. Gentry asked for a one‑year time threshold (in addition to a sales trigger) that would allow the company to return to the board to request a second tranche if sales lag, and sought to limit or reframe staff requirements for an affordability study and the degree to which marketing materials must give equal prominence to reserved and market units. Staff replied that the affordability study is intended to assess whether Gentry’s pricing and outreach are achieving the D&O objectives and that marketing and reporting requirements respond to concerns raised by the Office of Hawaiian Affairs and other testifiers.

Staff presented sales and inventory data supplied by Gentry indicating 8 reserve units sold in 2024 and 15 in 2025, with median time available for sale about 9.1 months and median standing inventory about 3.8 months; staff said those patterns affect the timing of any sales trigger for additional credit release. Staff also summarized proposed D&O provisions on density, reserved floor area, and public‑facilities dedication calculations, including a proposed on‑site reserve housing requirement of 49,525 square feet.

Board members pressed on income limits, whether HCDA provides direct financial support for reserved units, and whether targeted outreach (for example in coordination with the Office of Hawaiian Affairs) might improve absorption of reserved units. Counsel said Gentry is open to website and marketing changes and, if the board preferred, would accept a reduced sales threshold in lieu of the year option.

No final decision was recorded at the hearing. After asking members to confirm they had reviewed the record and were ready to deliberate, the authority voted to recess for deliberations; Member Evans moved to recess, the motion was seconded, a voice vote carried, and the board went into a roughly 20‑minute recess to deliberate further. The D&O and the parties’ proposed exceptions thus remain pending a later board action.

What’s next: The board recessed to deliberate; the record shows staff recommended adoption of the D&O with the conditions presented and Gentry requested both time‑based and lower‑sales thresholds for seeking a second tranche of credits. A final action on the permit amendment was not recorded in the hearing transcript provided.