Kahuina Kakaako: 861-Unit Mixed-Use Tower with 60% Affordable Housing Targets 2026 Groundbreaking

Stanford Carr Development is moving forward with plans for Kahuina, an ambitious 861-unit mixed-use tower in Kakaako that promises to deliver 60% of its residential units as workforce and affordable housing. The developer is targeting a 2026 groundbreaking for the project, which would also include 42,000 square feet of commercial space at street level.

The 40-story tower, planned for a site between Pohukaina and Ilaniwai streets, represents one of the most significant affordable housing commitments in recent Kakaako development history. With 516 units designated as workforce or affordable housing, Kahuina could help address Oahu’s persistent housing shortage — if it can navigate the challenging economics of construction in Hawaii.

Rising construction costs have derailed or significantly delayed numerous Hawaii developments in recent years, raising questions about whether projects with high affordable housing percentages can remain financially viable. Material costs have increased by roughly 30% since 2020, while labor shortages continue to drive up wages across the construction sector.

“The commitment to 60% affordable and workforce housing is exactly what our community needs, but the real test will be whether they can deliver on that promise given today’s construction realities,” said Maria Santos, executive director of the Hawaii Housing Finance and Development Corporation. “We’ve seen too many projects scale back their affordable components when costs escalate.”

Kakaako’s Evolving Landscape

The Kahuina project would rise in the heart of Kakaako’s ongoing transformation from industrial wasteland to urban neighborhood. The area has seen rapid development over the past decade, with luxury towers like ONE Ala Moana and The Collection dominating the skyline.

However, most Kakaako developments have included minimal affordable housing components, contributing to criticism that the area is becoming a playground for wealthy mainland buyers rather than serving local residents. The Hawaii Community Development Authority has increasingly pushed developers to include more affordable units in new projects.

Stanford Carr Development has positioned Kahuina as a response to these concerns, marketing the project as a community-focused development that will serve Hawaii’s working families. The company has experience with affordable housing projects, having developed several mixed-income communities on Oahu over the past two decades.

Financial Challenges Ahead

The project’s financial structure will be crucial to its success. Developments with high affordable housing percentages typically rely on a combination of market-rate unit sales, tax credits, and government subsidies to remain profitable. Rising costs have made this balance increasingly difficult to achieve.

Construction loan interest rates have also increased significantly, adding pressure to development timelines and budgets. Several high-profile Hawaii projects have been cancelled or indefinitely postponed due to financing challenges, including planned affordable housing developments on the Leeward Coast.

The commercial component at Kahuina’s base could provide additional revenue streams to support the affordable housing elements. The 42,000 square feet of retail and office space would activate the street level and potentially house neighborhood-serving businesses like grocery stores, restaurants, and services.

Infrastructure and Transportation

Kakaako’s infrastructure has struggled to keep pace with rapid development, raising concerns about whether the area can accommodate additional high-density projects. Traffic congestion along Ala Moana Boulevard and side streets has worsened as new towers have opened.

The planned Honolulu rail system could eventually provide some relief, with stations planned for downtown and Ala Moana. However, the rail project’s ongoing delays and budget overruns create uncertainty about when improved transit options might become available.

Water and sewer capacity in Kakaako has also been stretched by new development. The Board of Water Supply has required some developers to contribute to infrastructure upgrades as a condition of approval for large projects.

Looking Ahead

Stanford Carr Development will need to navigate the permitting process with the Hawaii Community Development Authority over the coming months. The approval process for large Kakaako projects typically takes 12-18 months, involving multiple public hearings and design reviews.

If approved and constructed as planned, Kahuina would add significant housing inventory to Oahu’s constrained market at a time when the median home price approaches $1 million. The success or failure of the project’s affordable housing component could influence how future Kakaako developments approach workforce housing requirements.

For Honolulu residents struggling with housing costs, Kahuina represents both hope and skepticism — hope that meaningful affordable housing can be delivered in an increasingly expensive market, and skepticism based on previous projects that promised more than they ultimately delivered.