The developer for the Sky Ala Moana interim planned development transit (PDT) project asked the Honolulu City Committee on Zoning and Planning on Oct. 16 to permit unsold affordable-for-sale units to be rented to households earning up to 80% of area median income (AMI) until the units can be sold under the originally required terms.

Spencer Lee, representing the developer, said the project must provide 84 affordable units under the land-use requirements: 42 “ordinance” for-sale units subject to a 30-year affordability period and 42 community-benefit units that offset height and density bonuses and likewise carried long affordability periods. Marketing periods and staged AMI pools have expired; the developer reported 38 affordable ordinance-unit studios and two-bedroom units remain unsold (30 studios, 8 two-bedroom), and 24 community-benefit units remain unsold.

Lee told the committee the developer received a temporary permission from DPP to rent unsold units to households at 100% AMI through Dec. 31, 2027, but requested a change to allow renting to households at 80% AMI instead. The developer said renting the unsold units until sale will prevent the displacement of 54 current renters who would otherwise be subject to termination when DPP’s temporary permission expires. Lee emphasized that any rental period would not shorten or alter the 30-year and 10-year affordability periods that apply once units are sold: “The period of time that the units are rented to affordable renters will not diminish the current 30-year and 10-year affordable period,” he said.

Committee members and the director of planning and permitting discussed how the city’s affordable-housing framework in ROH Chapter 29 allows developers to choose different compliance options (for example, providing 10% of units affordable for 30 years, 20% for 20 years, or 30% for 10 years). Members noted the 30-year requirement tied to the 10% option can be a market disincentive; several council members said a broader ordinance review may be warranted. Councilmember Waters said the department and council should work on greater flexibility in the rules.

Committee members asked about rent-to-own structures and whether rental payments could be applied to future purchase. The developer said no rent‑to‑purchase structure is currently in place but said he would consider options and that the developer has not adopted a rent-credit policy for renters who later buy units. Councilmembers and DPP noted precedent in other programs limiting long affordability periods and indicated willingness to work on ordinance changes in future legislation.

Public testimony supporting amendments to permit rentals at lower AMI was offered; Angelie Melodie Young said she supported the developer’s approach and praised the outreach and experience of the development team.

After discussion the chair recommended that Resolution 25-288 be reported out for adoption as amended; DPP indicated support for the CD1 on the record.

Clarifying details in the record: the project is required to provide 84 affordable units (42 ordinance units, 42 community-benefit units); 30 of the unsold ordinance units are studios; to date the developer reported 4 of the ordinance-for-sale units sold and 21 community-benefit units sold; the developer currently rents many of the units under DPP’s temporary permission through Dec. 31, 2027; the developer requested permission to rent unsold units to households at 80% AMI until sale without reducing the statutory affordability periods.