Honolulu Mayor Rick Blangiardi’s administration is offering $5 million in grant funding to stoke the creation of more low- income rental housing on Oahu.

Currently, the city Department of Land Management is soliciting proposals from nonprofit entities and public agencies for funding opportunities through the Affordable Housing Fund, or AHF, which typically provides funding to develop and expand affordable rental housing for households earning 60% or less of area median income.

The fund also comes with the requirement that funded housing remain affordable for at least 60 years.

But in this solicitation, the city is prioritizing projects that serve extremely low-income households — or 30% AMI and below, including those experiencing homelessness — in which a person earns $29,250 a year or a family of four receives $41,750 annually, according to the state Housing Community Development Authority.

“This funding opportunity is a key part of the city’s broader strategy to increase the supply of affordable housing, particularly for those in urgent need, including individuals transitioning out of homelessness,” Kevin Auger, executive director of the Mayor’s Office of Housing, said in a statement.

In a statement, Catherine Taschner, DLM’s director designate, said the program encourages “organizations to bring forward projects that will have a lasting impact.”

“By prioritizing projects that serve extremely low- income households, this initiative underscores our commitment to tackling homelessness and expanding affordable housing opportunities,” she said.

The funding cap is $55,000 per unit, meaning the program could support at least 90 units at full funding, according to city officials.

They add that the actual unit production will depend on project scope, land acquisition costs and whether funds are used for new construction or rehabilitation.

City officials say they won’t know the number of affected units until the completion of the competitive selection process. And while 90 units is the estimated baseline, the final number could be higher depending on how efficiently funds are allocated and whether projects secure additional financing.

The proposal submission deadline is scheduled for 3 p.m. March 18.

Meantime, the city is also seeking developers willing to build or redevelop four new affordable housing projects on city-owned parcels in urban Honolulu.

The properties in question include:

>> 1615 Ala Wai Blvd.

>> 436 Ena Road.

>> 130 S. Beretania St.

>> 1421 Pensacola St.

Under this program, selected developers will enter into a 75-year ground lease with the city and will be responsible for designing, financing, constructing and operating affordable rental housing on these sites. DLM recently issued a “request for qualifications” to redevelop the four underutilized sites, the city said.

The deadline to submit is 1 p.m. March 21.

Both of these efforts correspond with the Blangiardi administration’s unveiling earlier this week of its new plan to expand construction of more housing across Oahu.

Coinciding with the mayor’s second four-year term, the city’s Office of Housing released its 2025-2028 Strategic Housing Plan, which aims to partner with developers to “activate underutilized” city-owned lands on the island and involve using new types of “financing strategies” to build more housing on the island.

The plan, which does not offer an overall number of new housing units the city expects to develop on the island, will supposedly lay the groundwork for such development in the coming years — or at least as long as the Blangiardi administration remains in office.

The mayor’s second and final term ends in 2028.

During a news conference held Wednesday at the Mayor’s office, a few “special guests” — namely, representatives from large developer firms including Kobayashi Group LLC, Stanford Carr Development LLC and Castle &Cooke Hawaii, among others — appeared.

Peter Savio, a longtime real estate developer in Hawaii and president and CEO of the Savio Group of Companies, did not appear at the mayor’s news conference.

But afterward, Savio told the Honolulu Star- Advertiser that the city’s approach to building more affordable housing on Oahu misunderstands the real issue at play.

“We do not have a supply problem; we have a demand problem,” he said. “As we build affordable units and sales restrictions expire, they get resold at market and become unaffordable.”

And most so-called affordable housing units are “unaffordable based on local wages,” he said.

“Real estate markets are local in nature, and slow for the building and sale of homes in a community,” he added. “This means homes are sold tied to the income of buyers and sellers in that community.”

Savio said if applied to housing in Hawaii, and tied to average wages, a three-bedroom, two-bath fee-simple home should sell for about $450,000.

Instead, that home sells for more than $1 million, he noted.

“‘Affordable’ projects have studios at $250,000 (and) one-bedrooms at $400,000. They are lower than market prices but still unaffordable,” said Savio. “Outside demand has pushed our market above the local sale price by over $700,000.”

“Our wages do not allow us to compete for home purchases. We are priced out of our market because of our demand,” he said. “If demand is the problem, building more supply simply attracts wealthy mainland and foreign buyers.”

“If demand is the issue, building more is the worst thing the government can do,” he added.

To solve the problem, Savio claimed the government must establish a program to keep housing affordable in perpetuity.

“This can be done by creating an affordable local market where homes are sold in a controlled market, where price is determined by increase in wages,” he said. “Wages go up 20% over 10 years, the price goes up 20%.”

“All we have done is create a local market for local wage earners, which is what our market would be without the distortion of outside buyers,” he said.

To that end, Savio said he supports new state-level legislation introduced by Sens. Les Ihara Jr. and Carol Fukunaga. He said the measures — Senate Bills 1632 and 379, respectively — are meant to establish “a local market” for housing as well as keep so-called affordable housing “affordable forever.”

“That’s the real story,” he added. “We have a solution and it will work.”

Meanwhile, according to the city and the University of Hawaii Economic Research Organization, or UHERO, the median sales price of a ­single-family home exceeds $1.1 million, and median rents approach $2,000.

In the Honolulu metro area alone, there are nearly 20,000 cost-restricted units, while West Oahu contains approximately 9,000 units, UHERO says.

According to the Hawaii Housing Factbook, 58% of Oahu renters are rent-­burdened, spending more than 30% of their income on housing.

In comparison, 29% are severely rent-burdened, allocating over half their income to rent, the housing report says.