Honolulu’s newly signed Bill 7 hopes to make building affordable housing easier and more financially viable. The bill allows property owners with lots 20,000 square feet or less the option to construct new homes— on the condition that they charge rent on 80% of the new units at a rate deemed affordable for those making 100% or below the city’s median income.
Bill 7 also offers several financial incentives to property owners, including waiving the fees for building permits, parking, and wastewater facilities, and a 10-year waiver on property taxes. When combined with an expedited permitting process, it’s never been a better time for property owners to consider investing in building a rental property with the potential to generate income in perpetuity.
Want to make the most of your property under Bill 7? With some carefully budgeting and good design, you can build a rental property that’s both affordable and profitable. Here’s our top five tips for building a rental home for the affordable housing market.
- Create the illusion of light and space: In single story homes, maximize a pitched roof to create vaulted ceilings that not only make the space look larger, but allows for larger windows to bring in more natural light. Well-designed rooflines can also provide increased air ventilation, and added well-placed windows can further reduce energy costs.
- Make the space multifunctional: Small spaces require ingenuity, so use sliding doors or partitions that can be moved to expand a dining space out onto the patio, or close off a common area into a temporary guest space. Materials like glass or vented wood work particularly well at dividing space without making rooms seem too small.
- Use space efficiently: When working with limited square footage, make every inch count. Create storage space under stairwells, use tall ceiling-height cabinets in kitchens, create add additional shelving in closets wherever possible.
- Keep floorplans simple: Open-concept homes with plenty of multi-use space appeal to renters who want to be able to make their individual lifestyles work while living in a space they can’t personally renovate or change. Make the kitchen, dining, and living spaces flow together, and allow residents to use furniture to create use-specific spaces according to their needs.
- Invest in quality building materials where it counts: A rental home might not require high-end marble countertops in the kitchen, but you’ll see a better return on your investment property when you utilize high-quality materials in a few key areas. Good insulation and roofing materials keep cooling costs to a minimal, as do energy efficient appliances and well-designed windows. Spend your money where it will go the farthest, and look for remnant materials for the cosmetic choices whenever possible.
Ready to get building? Home Planning Hawaii can connect you with experts in both home construction and design, as well as help you navigate the permitting and incentive process. Start by checking out our free online estimator, and then let us help you find the best professionals for your next project!