Hawaii legislators’ efforts to address the state’s affordable housing crisis may barely make a dent in the huge demand for homes.
A 2014 analysis by the Hawaii Housing and Finance Development Corporation estimated that more than 20,000 rental units are needed in the state by 2020. Of these, more than half are needed by low-income families earning less than $57,480 for a family of four, or 60 percent of area median income.
The Legislature’s most ambitious proposal this session — to set aside $50 million for the Rental Housing Trust Fund — is half of what Gov. David Ige requested, and is expected to produce only about 400 new rental units in the next three to four years.
Advocates for more housing say that every little bit helps, but the contrast illustrates the daunting task of increasing the production of low-income rentals in Honolulu, where the median home price was $700,000 in March.
Efforts to fund the improvement and expansion of dilapidated public housing projects have also fallen flat. If no money is appropriated before the session ends in May, Hawaii Public Housing Authority Executive Director Hakim Ouansafi said the planned redevelopment of Mayor Wright Homes could be delayed.
Conditions at the 364-unit Kalihi public housing project have improved since residents sued the state, but the development still has an estimated $14 million backlog for immediate repairs and maintenance.
“We typically hear the same tune from the Legislature, that we have to do something about affordable housing. But when it comes down to push comes to shove, the money keeps getting cut.” — Kevin Carney, EAH Housing
Housing is competing with numerous other funding priorities this year, including public school repairs, a Kona courthouse and Maui’s hospitals.
And even as they discarded efforts to tear down and rebuild public housing projects through private-public partnerships, lawmakers have also shied away from funding stopgap repairs.
The proposed budget put forth by the House didn’t include any money to maintain sanitary conditions in public housing, and the Senate only set aside $5 million. That’s consistent with the governor’s request, but far less than HPHA’s estimated $275 million immediate repair and maintenance backlog.
An omnibus measure known as House Bill 1354 could still secure money for public housing improvements as well as the construction of new affordable housing projects, such as micro-units and housing for homeless veterans.
But as of Tuesday, advocates said the bill lacked specific proposed appropriations, leaving observers in the dark as to how committed policymakers are to the initiatives.
Sen. Jill Tokuda, who heads the Senate Ways and Means Committee, didn’t respond to requests for comment. Neither did Rep. Sylvia Luke, who leads the House Finance Committee.
Advocates for affordable housing say they still hope that more funding will emerge before the session ends.
But Kevin Carney of EAH Housing, a nonprofit affordable housing developer, is concerned about lawmakers’ decision to slice in half the governor’s $100 million request for the Rental Housing Trust Fund. Carney is also alarmed by another bill that would cap the amount of money the fund receives from the conveyance tax on real estate sales and leases.
“We typically hear the same tune from the Legislature, that we have to do something about affordable housing,” Carney said. “But when it comes down to push comes to shove, the money keeps getting cut.”
“We’re left with whatever they’re able to save to get to us, and it’s never enough.”
Housing advocates have set their sights this year on securing $100 million for the Rental Housing Trust Fund, which gives out low-interest loans to developers to subsidize rental housing for low-income people.
The House proposed budget set aside $50 million for the fund. Senate budget figures weren’t immediately available Tuesday but Craig Hirai, executive director of the Hawaii Housing and Finance Development Corporation, said the Senate appropriated the same amount.
The Senate also appears willing to set aside $1.9 million to help Housing First, just shy of the $2 million the governor requested. The program currently receives $1.5 million annually to house 54 highly vulnerable homeless people, and the increase could help expand services to the neighbor islands.
Other measures aimed at increasing the production of low-income housing include House Bill 277, which would help fund infrastructure for affordable housing projects; Senate Bill 974, which would allow the Rental Housing Trust Fund to subsidize mixed-use rental projects; and Senate Bill 971, which seeks to ensure that rental projects remain affordable.
But lawmakers have also advanced House Bill 1469 to cap how much money the Rental Housing Trust Fund receives from the conveyance tax, the fund’s primary dedicated income source.
Hirai took an optimistic view of the session during a phone interview Tuesday.
While he opposes the proposed cap, Hirai said the agency is expecting $30 to $40 million in conveyance tax revenue this year, so a $38 million limit wouldn’t translate into a dramatic cut.
“It’s always better to have more,” Hirai said. “But I think we should be appreciative.”
Still, limited funding means the agency may have to turn away developers who want to build low-income housing projects.
Developers who submitted applications for funding April 1 requested a total of $94 million, but the agency only has about half of that amount available. It expects to receive even more applications before the next deadline in August.
Fewer developers may plan projects if they’re not confident about the amount of funding available.
Carney from EAH Housing said the problem with one-time appropriations to the fund is that “they’re basically just a one-time shot in the arm.”
“(Lawmakers) are not adding the consistency that we as developers need to see,” Carney said, noting that developers like him plan projects years in advance. “We would like to see more, because with more we could do more.”
He noted that state studies illustrate a huge gap between the demand for rentals and the existing supply.
“It’s going to take a lot more funding and making a lot more land available for us to even come close to catching up with that deficit,” Carney said.
While rental housing is getting some attention this session, public housing appears to be getting overlooked.
Tokuda from the Senate money committee killed three bills — Senate Bills 267, 121 and 973 — that would fund public-private partnerships to redevelop three public housing projects at Mayor Wright Homes, Kuhio Park Terrace and North School Street.
Lawmakers also don’t seem interested in spending more than $5 million on repairs even though the 10-year projected maintenance cost for public housing exceeds $820 million.
Ouansafi from the state’s public housing authority said that lack of funding could delay the redevelopment of Mayor Wright Homes and the low-rise units at Kuhio Park Terrace, some of which are so dilapidated they are uninhabitable.
“With any project, lack of funding either kills it or delays it,” Ouansafi said of the plan to redevelop Mayor Wright Homes. “We are just hoping it doesn’t kill it.”
Lawmakers could still decide to insert funding for public housing in the omnibus bill HB 1374. But during a phone interview Tuesday, Ouansafi sounded defeated.
“We are a state agency and we rely on state funding to do a lot of work,” he said. “We just have to reset and look at where we’re at and prioritize with whatever money we have to be able to try to make a difference in people’s lives. But no doubt when the funding is low, it will have a negative effect on tenants.”
He said the effect is even worse for the more than 10,000 residents on the public housing wait list, because if no funding is appropriated the state will have to consider closing certain housing units that are too deteriorated.
Luke from the House Finance Committee explained earlier this session that booming construction for Kakaako condos and the Honolulu rail project have raised the price of labor, and that it wouldn’t make economic sense to invest a lot in infrastructure this year because it would be expensive and drive up labor costs. The state also has to keep its bond rating in mind, she said.
Real estate researcher Ricky Cassiday, who conducted the Hawaii Housing and Finance Development Corporation’s 2014 housing study, said he’s disappointed about the death of Senate Bills 267, 121 and 973, which would have enabled the redevelopment of public housing through private public partnerships.
“The state has the power to do something,” said Cassiday, contending that there’s not enough urgency on the part of state officials to move forward with these projects.
There is still about one month left in the legislative session, giving lawmakers time to change their minds about priorities.
After each chamber votes on the remaining bills next week, legislators will meet in conference committees to negotiate their differences and fill in the blanks for bills like HB 1354.
Some nonprofit leaders hope legislators will decide to boost financial support for rental housing. The group PHOCUSED launched an online petition to encourage lawmakers to raise the appropriation to $100 million as the governor proposed.
Scott Morishige from PHOCUSED said that the nonprofit has interviewed 2,800 homeless people and found more than a quarter could get off the streets if affordable housing were available, without the need for additional social services.
Even though he’s lobbying for more, Morishige said the proposed $50 million infusion into the Rental Housing Trust Fund is an acknowledgement of how serious the housing crisis has become.
Ouansafi from the state public housing agency is also trying to be optimistic.
“We do hope and pray that through the conference committee that the House and Senate will agree on the larger amount for the CIP (capital improvement projects),” Ouansafi said.
He calculated that the Senate’s $5 million appropriation for repairs and maintenance comes out to about $800 for each of the 6,200 units that HPHA oversees.
“We’re happy to get it, don’t get me wrong,” Ouansafi said. “But when you’re running 6,200 units, it doesn’t go far at all.”