The legislature directed the $300 million in 2022 to the state’s Rental Housing Revolving Fund, which makes low-interest loans to housing developers. 

It was the revolving fund’s largest cash infusion in its then-16-year history. In 2021, legislators had earmarked $25 million for the fund and it later would add $280 million to spend during the 2024 and 2025 fiscal years.

Gov. Josh Green in December proposed keeping the momentum going with $250 million more for the fund over the next two fiscal years, which, if approved by the Legislature, would be raised through general obligation bonds.

Following the record appropriation, $320 million went to develop about 2,000 apartment units around the state, from Hilo to Kihei to Kaka’ako.

The state funds played a key role in pushing forward housing for the lower-income families, those earning below 60% of the state’s area median income — about $83,500 for a family of four in Honolulu. Many teachers would qualify since their average salary was $73,319 during the last school year, according to the Hawaiʻi State Teachers Association.

Building low-income housing comes with extra challenges in a state that already has a host of challenges. While it costs as much to build affordable housing as market rate housing, lower rents bring in less income, making it harder for developers to make their money back. That, in turn, makes it tougher to raise capital to even start construction in the first place.

Loans from the revolving fund are meant to help developers close that financing gap. 

Just over half the 2022 appropriation went to five lower-income projects—four of them now being built—for a combined 1,036 apartment units.

That was a major boost, said Arjuna Heim, director of housing policy at Hawai’i Appleseed, a nonprofit research and advocacy organization.

“That is the only program we have that significantly delivers housing for people at the low- and very low- income spectrum,” Heim said. “Without having those funds earmarked specifically for that, I’m not sure how else we would be able to house a significant portion of our community.”