Lawmakers mull charter amendment on affordable housing

LIHU‘E — Kaua‘i may set in stone a commitment to fund affordable housing.

Resolution No. 2022-22 introduced at council Wednesday proposes an amendment to the county charter that would allocate at least 2% of property-tax revenues each year to a housing-development fund, a step that proponents hope can put a dent in the ongoing affordable-housing crisis.

“We all know how big the housing crisis is, how it’s decimating our communities, and I think we all agree that we need to do more,” said Councilmember Luke Evslin, who introduced the measure along with council Vice Chair Mason Chock. “This is just one more step in that direction.”

The resolution passed council unanimously on first reading Wednesday, meaning that it will get a public hearing before going to council again. If it passes (by at least a 5-2 margin) it would then go on the ballot for voters on Nov. 8.

County Housing Agency Director Adam Roversi said getting consistent money into the housing-development fund is important for long-term projects.

“Housing projects don’t happen in a budget hearing. They take many years of planning, permitting and zoning,” Roversi said. “A reliable source of funding allows the housing agency to plan for projects of significant scale over multiple years as opposed to keeping our fingers crossed that each year we will receive funding from council.”

Consistent funding can also be used to leverage other sources of funding, including underwriting revenue bonds, Roversi said.

Based on revenues from this year, the resolution would allocate at least $3.7 million toward housing.

Construction of more housing could begin to alleviate high housing costs on the island, where the median price of a single-family home has risen to $1.1 million, according to the Hawai‘i Association of Realtors.

The resolution came about as a result of a proposal to raise taxes on transient vacation rentals (TVRs) to fund affordable housing, which was voted down by the council in May.

A primary concern of some councilmembers voting against the measure was that funding would not be earmarked for affordable housing for beyond this fiscal year. Such a move requires a charter amendment.

With this measure in place, a future tax increase on TVRs could be specifically earmarked toward affordable housing for more than one year in advance.

Though the measure unanimously passed first reading, it will likely see opposition before it reaches the voters.

Council Chair Arryl Kaneshiro and Councilmember Billy DeCosta voiced skepticism about the effect that the amendment would have on the flexibility of the budgeting process.

“I’m worried that if we hold that money, and if it’s needed for something else, you can’t use it,” said DeCosta.

Kaneshiro said all departments would like this guaranteed source of funding, not just CHA.

“Is that a policy that we’re going to go toward as far as how we budget — dedicating money to every single department? Or do we go through a year-to-year budget and fund things based on priority, based on need, based on where we’re at?” Kaneshiro asked.

Evslin and Chock also put forward a measure which would tier the taxes on residential investors and TVRs — which could potentially be used as a mechanism to generate the 2% needed to fund housing without touching rates for resident-occupied homes.

Bill No. 2872 would create three tiers for taxes on these properties — less than $1 million, between $1 million and $3 million, and greater than $3 million — allowing the county to tax homes of a greater value at a higher rate in the future.

This measure passed in a 6-1 vote with DeCosta in opposition.

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Guthrie Scrimgeour, reporter, can be reached at 647-0329 or gscrimgeour@thegardenisland.com.