Affordable housing voted down

LIHU‘E — Voters will not have the chance to decide on an affordable housing measure this fall, after the Kauaʻi County Council voted against putting it on the ballot on Wednesday.

Resolution 2022-22 would have amended the County Charter to designate at least 2% of real property tax revenues each year to an affordable housing fund.

Introducers Vice Chair Mason Chock and Councilmember Luke Evslin, along with councilmembers KipuKai Kuali‘i and Felicia Cowden supported the measure. Council Chair Arryl Kaneshiro and councilmembers Billy DeCosta and Bernard Carvalho stood in opposition.

Though it was supported by four of seven council members, the resolution required five votes to pass.

Proponents saw the bill as a chance to improve the housing department’s ability to plan long-term and allow them to leverage funds for revenue bonds, which can generate substantially more cash.

Opposition to the bill largely came down to a question that Kaneshiro posed repeatedly to councilmembers — “What’s wrong with the current budget process?”

Currently, the budget is determined in a process by which individual departments request funding, which must be approved by the council and the Mayor. This measure would automatically divert a percentage of that money towards affordable housing, meaning that it would not go through the traditional process.

“It strips budgeting flexibility away from our Mayor and council forever,” said Kaneshiro, voting against the measure.

Councilmembers voting against the measure said that they were not resistant to affordable housing funding in general, but resistant to using the charter amendment for this end.

Those in favor argued that flexibility would not be meaningfully affected.

“We’re talking about 2%, such a small portion of our entire budget,” said Kuali‘i, in casting his yes vote on the measure. “We have that flexibility with the other 97.5% of the budget.”

Those opposed also expressed concerns about the effect of the measure on the county bond rating.

Finance Director Reiko Matsuyama said that it would probably not affect the rating directly, but that it might lead to a slippery slope that could affect the rating down the line if other charter amendments were implemented.

The resolution came out of a legislative effort from Evslin during the budgeting process which would have raised $4.5 million for affordable housing through a tax on vacation rental properties.

That measure was voted down by Kaneshiro, Carvalho, DeCosta and Cowden in part because of concerns that the funding would not be earmarked towards affordable housing for future years, and that the increased revenue would be subsumed into the larger budget.

“I’m worried that this $4 million is going to be absorbed into the general fund next year,” said DeCosta at the time. “There’s nothing in place that says it’s going to be repeated year after year.”

Earmarking funds for future years require a charter amendment like the one voted down Wednesday.

Based on this year’s revenues, the measure would have earmarked a minimum of $3.75 million for housing.

Kaua‘i gave $3 million this year to affordable housing, an increase from past investments.

This commitment lags behind that of Maui however, which this year funneled $58 million into their affordable housing fund. Though Maui has a larger population than Kaua‘i, this is a much larger proportion of funds dedicated to housing. Part of this commitment comes as a result of a similar charter amendment, passed in 2020, which dedicated 3% of property tax revenues to an affordable housing fund.

Community testimony was largely supportive of the measure, with residents, affordable housing developers, and community institutions backing the resolution.

Prosecuting Attorney Rebecca Like drew the connection between housing and criminal justice in her submitted testimony.

“Without a home, individuals are more likely to become entangled in the criminal justice system and need emergency medical care,” wrote Like. “No factor matters more to homelessness than access to housing — not poverty, mental illness or addiction.”

Dana Hazelton, who administers the Coronavirus Rent and Utility Assistance (CRUA) program, pointed to long wait times at Kaua‘i affordable housing properties as a reason to commit to funding affordable development. Housing properties tend to have wait times of six months to one year, and wait lists have increased since the beginning of the COVID-19 pandemic.

“Our problem is that there is a severe shortage of affordable units for our community to live and rent,” said Hazelton. “The housing crisis is real and it affects each and every one of us because it is the very foundation of our economy.”