Hawaii’s First Micro-Unit Rental Community Comes to Downtown Honolulu

Hawaii's First Micro-Unit Rental Community Comes to Downtown Honolulu

Nohona Hale in Honolulu is Hawaii's first micro-unit rental community. The affordable housing development opened in 2020 as central Honolulu, like many other parts of the state, became prohibitively expensive for many Hawaiians to reside. Nohona Hale has more than 100 apartments, all of which are affordable for low- to moderate-income households. The development is in one of the city's core commercial districts, offering residents easy access to jobs, services, and amenities. The apartments are micro-units: condensed studio apartments with fully functioning kitchens and bathrooms. The micro-unit design allowed the developer to maximize the number of apartments that the development's small lot and dense urban neighborhood could accommodate.

Background

In 2014, the Hawaii Community Development Authority (HCDA) saw an opportunity to bring affordable housing to downtown Honolulu. One of HCDA's few remaining parcels at the time was an underutilized parking lot for a commercial development in Honolulu's Kakaʻako neighborhood. Housing in this neighborhood has become increasingly expensive, and many residences constructed in recent years are market rate and luxury condominiums. In 2015, HCDA selected EAH Housing and Bronx Pro Group as the development partners and transferred the land to the developers under a 65-year ground lease.

HCDA encouraged the developers to consider micro-units to maximize the number of units on the lot, which was less than 10,000 square feet, and further the agency's sustainability goals in the dense urban area. In accordance with this vision, EAH and Bronx Pro began constructing the 16-story, micro-unit building in 2018. The residences, known as Nohona Hale, opened in January 2020. Despite the ensuing COVID-19 pandemic, all initial residents moved in over the subsequent months.

Excluding the land, which HCDA sold for a nominal amount, the development cost approximately $51 million. The Hawaii Housing Finance Development & Corporation (HHFDC) supported the project with a $21 million low-interest loan from the Rental Housing Revolving Fund. Nearly all the remaining financing came from tax-exempt bonds and equity from 4 percent low-income housing tax credits from HHFDC. The developer applied for these three funding sources with a single consolidated application.

The Apartments

Nohona Hale consists of 111 studio apartments that are each 355 square feet. Eleven studios are reserved for households earning no more than 30 percent of the area median income (AMI), and the remainder serve households earning up to 60 percent of AMI. The main living area of each studio features a combination sofa/wall bed unit. Each studio also has a kitchen, bathroom, and a 70-square-foot private outdoor lanai accessed through sliding glass doors. The lower two floors of the building house community amenities, including an indoor/outdoor lounge area with a kitchen, fitness center, laundry room, and bike and moped storage room. The property also offers residents an outdoor community garden. Furthermore, a street-facing convenience store occupies part of the ground floor. The Leadership in Energy and Environmental Design Gold-certified building features solar photovoltaic panels, solar thermal water heating, low-flow water fixtures, and LED lighting.

An Urban Setting

Kakaʻako is a commercial district in Honolulu's urban core. Locally owned businesses, creative workspaces, public gathering spaces, and public art line the vibrant community's streets. Nohona Hale is a short walk from the neighborhood's many restaurants, cafes, bars, shops, and services. Medical centers, schools, public parks, and beaches also are within a mile of the property. Multiple bus routes serve the area, and a planned station for Skyline, the city's new rail transit line, will be a few blocks away from Nohona Hale.

The development's proximity to services and transit is especially beneficial considering the development's lack of onsite parking. Marian Gushiken, vice president of real estate development at EAH Housing, Hawaii, explained that the small lot could not accommodate a separate parking lot or structure and that adding parking below the apartments would not only significantly increase development costs but also alter the building's design. Including parking also would have reduced the total number of units that could be built. Gushiken said that, despite initial concerns, the lack of dedicated onsite parking has not been a significant issue. An initial survey of residents indicated that only about a quarter of residents own a car, and those who do generally arrange for offsite parking.

Significance

Although Gushiken acknowledges that this type of development might not be appropriate for certain settings, particularly less dense or car-dependent areas, she believes that downtown Honolulu is well suited for a micro-unit development. "If we see other opportunities in the urban core, we would love to do something like it again," she said. This development allowed more than 100 low-income residents to live in a high-amenity neighborhood in one of the nation's most expensive housing markets.