Affordable Housing: The U.S. Department of Housing and Urban Development (HUD), gives tax credits to developers who can create units priced for household earning 60 percent of the area median income (AMI). There is no federal subsidy for projects accommodating those who earn higher than 60 percent AMI. However, because it is so difficult for developers to turn a profit at these profits, most decide not to create true affordable housing.
Workforce Housing or Moderate Income Housing: The City and County of Honolulu requires that developers build a certain number of workforce housing when building new projects. Depending on the requirements, these would have to be designed for families earning a maximum of 120 percent area median income (AMI) or 140 percent AMI. Additional incentives are given for units for 80 percent AMI and 100 percent AMI.
Recent bills before the state legislature suggest increasing the number of required workforce housing that developers must build and forcing developers to create a certain number of 80 percent and 100 percent AMI buildings. Developers argue that supplying these properties are not profitable for them and that huge government subsidies would have to be provided by the state or city in order for that to happen.
As a point of reference the median income (100 percent AMI) for a family of four in Honolulu is $82,600 in Honolulu.
Source: Honolulu Star Advertiser, 2-9-2014, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com
