LIHUE — A bill that proposed to reform the county’s affordable housing policy did not pass a second hearing at the Kauai County Council meeting last week, losing in a 6-1 vote.
Bill 2725 was introduced by then Councilwoman JoAnn Yukimura and former Council Chair Mel Rapozo in an attempt to preserve housing designated for low-income families at prices below the normal market value.
Yukimura said she can’t figure out why her bill met resistance, considering that the development of affordable housing was listed among the goals in the Housing Agency’s 2018 budget and the Kauai County General Plan.
“It’s baffling,” she said.
Although the bill passed first reading unanimously, there was some discussion and disagreement at the Oct. 24 council meeting. The bill’s opponents were concerned that stricter regulations will deter investors, ultimately stifling real estate development.
A Nov. 8 opinion issued by County Attorney Mauna Kea Trask was also critical of the bill. In the opinion, Trask expressed concerns about the bill’s future impact on the economy as well as its ability to stand up to legal challenges.
Trask advised the council to “withhold any action,” pending the conclusions of a housing market study, which is being conducted by an independent company at the request of the housing agency to determine the economic feasibility of a countywide “inclusionary housing policy.”
Housing Agency Director Kanani Fu said she expects the study to be finalized and released to the public sometime this week.
“As well intended as this is, it’s premature,” Council Vice Chair Ross Kagawa said of the bill at the Nov. 28 council meeting.
Developers of affordable housing units are required to rent or sell the homes at reduced rates only for a certain number of years. Once that term expires, owners are allowed to rent or sell them at regular market prices, far beyond the price range of the original occupants.
Already the island’s housing deficit stands at about 1,400 units and that number is expected to increase by 9,000 units by 2035, according to the 2018 Kauai County General Plan. Bill 2725 essentially proposed to prevent that eventuality by eliminating or extending the expiration date on affordable housing units.
“The need for such policy is made clear by the example of Courtyard at Waipouli,” Yukimura said during the council’s first hearing on the bill in October.
The development is an affordable housing project whose rent-control restrictions will expire in less than a year.
“That means that the owner will be able to rent or sell those units for residence or vacation rentals at market prices, which means that 41 families will have to leave and find another place to live,” Yukimura said. “The question is, where will they go?”
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Caleb Loehrer, staff writer, can be reached at 245-0441 or cloehrer@thegardenisland.com.
