In essence, Hawaii tries to promote affordable housing by requiring private developers to sell units above market prices to off-set lower-priced affordable housing. However, Carl Bonham (Executive Director of UHERO) stated his skepticism of the model, stating:
There’s very little evidence that I’m aware of that that model works anywhere in the country. And the only time that it works is when you have demand for housing that outstrips supply so that prices can go up and developers are able to charge more than what they would in an unrestricted market, right. That only works for very short periods of time during what we typically refer to as housing booms.
This story is part of a series by Yoshioka examining the state of housing in Hawaii. The other two entries in the series are also worth reading, including: “Affordable Housing: Nothing Being Built on Neighbor Islands” and “Millennials in Hawai’i Are Purchasing First Homes.”