Earning $93,000 per year sounds like a hefty salary, but not in Honolulu.
New federal guidelines now consider an income of up to $93,300 to be low-income in Honolulu for a family of four.
The city of Honolulu published the new income levels Monday showing the city’s median income grew to $96,000 — more than a 10 percent jump from $86,600 last year.
“Based on past experience — I’ve been doing this over 20 years — I don’t remember encountering such a large bump in the income limits,” said Kevin Carney, who works for the nonprofit housing developer EAH Housing. He said the changes likely mean that more people will be eligible for income-qualified units, but rents may rise.
The new guidelines say a salary of $65,350 or less in Honolulu is now low-income for a single person, and a salary as high as $123,200 is now low income for a family of eight. The Department of Housing and Urban Development calculates the data based on the census and inflation and considers salaries 80 percent or below the median to be low-income.
The numbers are important because they’re used to determine the rent for low-income housing units and the price of new for-sale units mandated by the city. The increase means that people can earn more than before and still be eligible for income-qualified units. It also could allow some developers to charge higher rents for low-income units.
Craig Watase, an affordable housing developer at Mark Development in Kaimuki, said the changes are positive.
“This is good news that people’s incomes are going up as a whole,” Watase said. “If people are making more money then as a whole people can afford to pay more rent.”
Watase runs a senior housing complex in Kakaako where seniors recently protested a planned rent increase. Watase is subsidizing existing tenants and said the state recently agreed to subsidize rents as well to ensure existing residents can afford the increase for at least the next two years.
Watase said HUD’s new numbers mean that he could increase rents even further, but he doesn’t plan to do so. “Even though we are allowed to raise the rents higher my budget is such that I don’t think we are going to need to.”
Like Watase, Carney said the news is good. “From our perspective we are going to see more people qualifying to live in our properties. We do get a lot of people that apply that are over-income,” Carney said. “We’re catching another 10 percent in society who are now eligible to apply.”
He said rent increases in EAH Housing’s low-income rental properties happen every year anyway to account for higher operating costs.
“It’s necessary to have some type of a rent increase whether it’s a budget-based rent increase or whether it’s an increase because the income levels went up,” Carney says. “I don’t expect that we’ll see a large impact as far as displacing tenants. We’ve never seen that in the past.”
The changes could also affect for-sale units built under city guidelines. Developers who get rezoning approval in Honolulu must set aside a certain amount of units as affordable, and some can be sold to people earning as much as 40 percent above the median income.
The new HUD numbers mean that an individual earning as much as $114,360 could qualify to purchase an affordable housing unit, or a family of four earning as much as $163,280.
Honolulu Mayor Kirk Caldwell and the City Council recently approved a new housing policy for some development around future rail stations. The idea is to make sure that new housing in gentrifying neighborhoods isn’t always too expensive for typical Honolulu residents.
The new policy allows developers to build for-sale units for residents earning as much as 20 percent over the median income. Now an individual earning as much as $98,020 or a family of four earning $139,960 per year could qualify for these units.
HUD issues new income guidelines annually and they vary widely by area. The income limits also affect federal programs like housing subsidies and public housing.