After spending nearly three months fighting to save his $22 million proposal to tackle homelessness from cuts by the Honolulu City Council, Mayor Kirk Caldwell’s administration finds itself in a peculiar predicament.
Final amendments by City Council members last week left the administration with more than double the funding it had requested for the 2015 fiscal year that begins July 1. But the mayor might not see the type of quick fixes he had hoped for when it comes to moving the street homeless population into housing, because some $32 million of the $47.2 million final appropriation is tied to general obligation bonds.
The bonds can be used for capital projects such as construction or renovation, but not for maintenance or management of facilities. This means the city will be pushed back into the housing businesses, Caldwell said at a press conference last week, adding it wasn’t clear if it would be able to expend all of the money appropriated.
The city is also moving forward without a housing department, which had included about 100 employees before it was disbanded in 1996. That makes it more difficult to execute and manage housing deals, Pamela Witty-Oakland, the director of Honolulu’s Department of Community Services, told Civil Beat this week.
The work of administering the mayor’s Housing First agenda, which focuses on getting unsheltered homeless into housing and then providing them with other services, will largely fall to her department. And despite the challenges, she said it was ready to move forward and that the administration has a plan that will be revealed at a press conference Thursday.
“We have a great team that has been a proponent of Housing First for many years and they are very excited to be able to move forward on the Homeless Action Plan,” she said.
Overall, the new funding could eventually help move several hundred homeless individuals and families into permanent housing, making a significant dent in the street homeless population, believed to number about 1,500 people, according to city estimates.
Last year, the administration released a homelessness plan that focused on the hardest to assist population — the chronically homeless, many of whom suffer from mental illness, drug and alcohol addiction, or both.
This group is made up of about 500 people, or about one-third of the total street homeless population, according to city figures.
Witty-Oakland said that the chronically homeless, residing in Waikiki, Chinatown and the Leeward Coast, remain the first priority of the administration.
Nearly $3 million in funds appropriated out of the new operating budget is expected to help house 110 chronically homeless. This is expected to cover rental assistance and costs to provide needed services, such as mental health counseling, health care and treatment for substance abuse.
This breaks down to about $25,000 annually per participant, according to Witty-Oakland. The administration had initially pegged this figure at $48,000 annually, but lowered the estimate after consultation with providers who had been implementing Housing First programs.
Perhaps the biggest, and most expensive obstacle, will be in finding and developing units to house the homeless.
The annual expenditures, which will require a long-term commitment, are expected to save the city money overall. Currently, the city estimates that taxpayers spend up to $50,000 a year for each chronically homeless person, which includes costs of emergency room visits, medical treatments, law enforcement and outreach services, according to the mayor’s office.
But perhaps the biggest and most expensive obstacle will involve finding and developing units to house the homeless.
Within urban Honolulu, the administration identified 215 single-room units in April 2013 that could be used to house the chronically homeless, but only 23 of these were then available, according to a city report.
That’s where more than $44 million appropriated for capital investments comes in, because it could be used to renovate or build new units.
Under Caldwell’s proposed homelessness plan, some $18.9 million for renovating housing units was supposed to come out of the Affordable Housing Fund.
The City Council reallocated $7 million of this for other purposes, while boosting funding for homelessness by $32 million, payable through general obligation bonds.
Caldwell criticized the move last week, noting that general obligation bonds come with more constraints. The city can’t partner with private developers or nonprofits to manage the housing, as it can with cash from the Affordable Housing Fund, he said. The general obligation bonds also eventually cost more. The $32 million in bonds is expected to cost taxpayers $54 million, with interest, after a 20-year period.
Councilman Ikaika Anderson who helped secure the funding, said that the mayor’s criticism caught him off guard.
“I was surprised by his comments at the press conference, being that I met with him twice on Tuesday and never did he share with me his concerns about floating bonds to address affordable housing and homelessness,” Anderson said.
Constructing a typical, 350-square-foot studio is expected to cost the city about $125,000, said Witty-Oakland, meaning that the funding available starting in July could help develop more than 350 units.
Additional appropriations would be needed to house everyone currently on the streets. The total capital cost to house more than 1,400 homeless is estimated at $288 million.
Witty-Oakland said her department would prioritize renovating existing facilities and moving forward on housing projects that are already in the pipeline, as opposed to new construction projects, which can take a long time.
“Construction projects are always a two- to four-year window,” she said. “So construction is what it is. Some of the units, if you do it through acquisition, you can do it sooner rather than later. If you are looking at new construction, it could be the latter part of the spectrum.”
However, the general obligation bond allowance is only good for two years.
Caldwell pointed to a proposed project in Waikiki last week to highlight the potentially lengthy development process. The proposal would include constructing a new building on Ala Wai Boulevard to help house homeless. But the mayor noted that the project, which the city would invest $4 million in, may not be up and going until mid-2017, providing 10 to 24 units.
“By 2017, I think there are going to be more than 10 to 24 more chronic homeless people in Waikiki,” said Caldwell.
“It’s enough money to really be a game changer, not just in Waikiki, but across the island.” — Councilman Stanley Chang
Councilman Stanley Chang, who is championing the project, said it’s still a good deal, noting that the project has already been in the works for some time.
“It is certainly further along than if we were to start from scratch on another building,” he said.
Chang said that overall, the funding appropriated by the City Council last week could have a big impact.
“It’s enough money to really be a game changer, not just in Waikiki, but across the island,” he said.
Once housing for the homeless is built or renovated, the city will also have to provide ongoing funding for services under the Housing First model.
Witty-Oakland said her department was looking to tap currently available sources, such as Medicaid and disability insurance, to help pay those costs over the long run.