The infrastructure bill that the U.S. Senate is debating has the potential to make a huge dent in Hawaii’s housing needs, according to affordable housing advocates who have analyzed the version of the measure that passed the U.S. House.
The federal funding proposal, known as the Build Back Better Act, encapsulates many aspects of Democratic President Joe Biden’s agenda and Democratic Congress members’ priorities.
Some of its more widely known aspects include provisions to reduce greenhouse gas emissions, provide mandatory paid family leave, subsidies for child care and universal prekindergarten.
It’s not clear what elements of the bill will survive the Senate’s negotiation process. Republican senators have balked at the $3.5 trillion price tag. On Tuesday, The Associated Press reported that President Joe Biden discussed a scaled-down version of the bill that would cost $2 trillion.
Lawmakers this week are debating which elements must be cut in order to pass the measure. On Wednesday, Politico reported that free community college might not make the final cut.
But advocates for affordable housing in Hawaii and beyond hope the housing-related aspects of the bill survive, saying they’re critical to addressing the state’s need for units that are affordable to people earning low incomes.
Kim Johnson, a housing policy analyst at the National Low Income Housing Coalition, said the proposal has the potential to effectively end homelessness in the U.S. if the resources are allocated well.
“We are really treating this as a once-in-a-lifetime opportunity to see these historic investments being made,” she said.
The potential for a major influx in federal funding comes a year and a half into the pandemic, which has worsened Hawaii’s housing affordability crisis.
In Honolulu, the median home price exceeded $1 million in September, up 19% from the previous year. Neighbor island communities like Maui County are experiencing similarly huge increases in housing prices, which are a key reason some local people are moving away.
“Our housing crisis will not just resolve itself.” — Sen. Mazie Hirono
Homelessness in Hawaii in 2020 was the second-worst of any state, according to the National Alliance to End Homelessness. The organization also found Native Hawaiians and other Pacific Islanders have the highest homelessness rate per capita nationwide.
“You had people buying second homes, people coming from the mainland remote working,” StormoGipson continued. “You just had this very clear example of how the housing market is not primarily based on local wages or primarily serving local residents.”
What The Bill Does
The struggle for affordable housing predates the pandemic and extends across the United States, including territories and tribal nations.
“Nowhere are any of the programs that serve the needs of low-income and poor renters funded at anywhere near the level where they need to be,” says Phil Garboden, a University of Hawaii assistant professor who specializes in affordable housing.
Garboden says nationally, only one in four people who are eligible for a housing voucher actually get one, which is in stark contrast to other programs like food stamps or children’s health insurance, which generally serve eligible beneficiaries.
The $3.5 trillion version of the federal spending bill would provide $90 billion in funding for rental assistance; $80 billion to preserve and upgrade public housing, which serves the lowest income communities; and billions more for low-income housing, particularly for older adults and people with disabilities.
The proposal would also create grants for localities that reform zoning laws to make them less exclusionary.
Sens. Mazie Hirono and Brian Schatz, Hawaii Democrats, both support the bill. Hirono said in a statement that Hawaii has had a low-income housing shortfall for decades.
“This problem will persist until we make serious investments in increasing the truly affordable rental stock available for working families,” she said. “Our housing crisis will not just resolve itself.”
The exact amount of money that would come to Hawaii is still unclear. But Johnson estimated that under the House version, the islands would receive $184 million in funding from the National Low Income Housing Trust, which supports the development of housing for people who earn 30% or less of area median income.
If the funding decisions are similar to the American Rescue Plan Act of 2021, Hawaii could benefit immensely, says Gavin Thornton, executive director of the Hawaii Appleseed Center.
Thornton said that Hawaii received the seventh-highest amount of federal funding per capita from that bill, twice that of some other states. That’s partially because of Hawaii’s relatively small population and funding floors that were part of that measure. Ultimately it meant that the federal money made up 9% of the state’s budget, Thornton said.
If the Build Back Better plan is enacted with the housing provisions intact, Thornton estimates Hawaii could get receive $1.4 billion dollars for housing.
“That’s a game changer for us,” he said.
But the bill may look a lot different by the time the Senate comes to an agreement. Spending trillions may require broad support for tax increases. Not everyone supports the housing-related proposals, with organizations like the Heritage Foundation criticizing the provision for incentivizing zoning reforms.
That aspect of the bill is exactly what Keliʻi Akina, head of the Grassroot Institute of Hawaii, thinks the state needs. The organization advocates for fiscal conservatism but says money to incentivize denser housing would be well-spent.
“If that’s what it takes for local jurisdictions to get off the dime and start increasing housing supply, I’m all for it,” Akina said.
Housing is not the only area of the Build Back Better bill that Thornton believes will disproportionately help Hawaii.
Hawaii parents deal with the 12th highest child-care costs in the nation, he said. Subsidies for child care and universal pre-K would save local parents money or potentially enable stay-at-home parents to return to work.
As an archipelago, Hawaii is also already experiencing the effects of climate change, Thornton said.
“On so many levels, this makes more sense for us than for so many other states in the nation,” he said of the bill.
The fact that Hawaii is a Pacific island chain also effects the state’s housing challenges, both by increasing demand and limiting how much can be built to meet it.
“If you are priced out you can’t just decide, oh, you’re going to live in a suburb two hours away and just have a longer commute to work,” said StormoGipson. “I think we feel the consequences of this disconnect between local wages and housing prices, we feel the consequences in a more drastic way.”
The problem is so big that Garboden cautions against seeing the federal spending bill as the end-all, be-all solution.
“It wouldn’t get us to where everyone who needs housing would get it,” Garboden. “But it would get us closer, and that, to me, is pretty significant progress.”
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