Editorial: Housing progress needs firm steps
Originally published in the Honolulu Star-Advertiser, May 7, 2019
Editorial Board, Honolulu Star-Advertiser
Hawaii’s affordable housing shortage is a chasm that has deepened for years. This year the Legislature has alloted a relatively good amount to it, but the problem is that “relatively good” is not quite good enough. Last year’s outstanding but overdue appropriation of $200 million has not been replicated and, advocates say, repeat showings of that commitment level is what it will take to make up for decades of lost time.
Overall, it would appear that, despite some out-of-the-box thinking as the session opened, lawmakers signed off without making significant gains on housing needs. Talk of Singapore-style density in apartment projects was controversial, but it at least signaled a grasp of the scale of the housing need.
Weeks into the session, it quickly became clear that anything on that order was going to have to wait for some future year.
There is some rationale here, in a year when projections from the state Council on Revenues seem to be dipping. The Legislature seemed a bit constrained fiscally.
And, connected to the housing issue are other socio-economic and land-use concerns. Advocates are rightly concerned that the failure of a minimum-wage increase to pass will not make it any easier for low-income renters to afford what housing is available.
Compounding the existing shortage, lawmaker efforts to enact a tax-collection scheme for vacation rentals booked through online platforms are proceeding in advance of enforcement strategies. This may have the effect of encouraging more unlicensed vacation rentals, further cutting into the availability of rentals for long-term tenants.
But just focusing on the funding: Among the spending bills sent to the governor is House Bill 1312, which authorizes the issuance of $50 million in general obligation bonds for each year of the fiscal biennium coming up to be devoted to the state’s Rental Housing Revolving Fund. This is the repository that the state’s Hawaii Housing Finance and Development Corp. (HHFDC) leverages to bring in developers of low-income rental housing.
State Rep. Sylvia Luke said there is additional revenue, including $30 million annually from the state conveyance tax, that’s dedicated to the revolving fund.
Luke said lawmakers want to see that HHFDC can spend down the $200 million already allotted, about half of which has been encumbered for projects, before doubling that appropriation. The money appropriated this year should help demonstrate the continued commitment of the state in the meantime, she said.
The public certainly hopes that is true, as the shortage of housing contributes to general poverty and homelessness conditions.
Encouragingly, there is another essential commitment from lawmakers: Luke said they will work with HHFDC in the interim to see that existing projects move along, and that the agency explores ways to ease financing arrangements with developers. The timetable for finance applications is too rigid now, which means that it often takes developers longer to assemble financing than is necessary.
On the homelessness front, a bill to expand the existing “ohana zone” program to at least three Oahu sites failed. However, the existing program has been given more time for implementation and, if HB 257 is signed, would allow it on private land. Also, funding has been renewed for the state’s Housing First program to house and provide help to the chronically homeless.
Beyond these incremental steps, though, the state must stay the course. The housing boost provided last year will have to become par for the course, not a one-off. Ultimately, that’s what it will take to climb out of the hole we’re in.