Mahalo to Peter Nilson for his letter to the editor (TGI, July 2)) and to those who asked about the proposed affordable housing charter amendment. This kind of discussion is important if we want more affordable homes!
The charter amendment would earmark 3 percent of existing real property tax revenues for the development of affordable housing, defined as requiring not more than 30 percent of household income for mortgage or rent. Let us be clear: this would use existing real property tax revenues, NOT raise taxes.
Question/Comment: Based on the recently updated General Plan, at an average subsidy of $200,000 per unit and the need for 8,000 new subsidized units over 20 years, total capital needed is $1.6 billion; the charter amendment would only generate a total of $80 million.
Answer: As Mr. Nilsen correctly notes, the need seems overwhelming — but it shouldn’t stop us from doing as much as we can. We won’t know how much we can do unless we try. The $4.3 million generated each year will provide a stable, committed fund without which the county will not be able to accelerate its affordable housing efforts.
As inadequate as it may seem, the monies will not be insignificant to the 400 families that could be housed over the next 20 years with that money (unleveraged) — or the 800 families that would get homes if the county could leverage a 1:1 match from federal or state monies or from developer contributions of land, infrastructure or money.
There are many ways we could use the earmarked 3 percent fund to increase affordable housing:
1) Use it as a source for attracting matching federal and state funding or public private partnerships.
2) Float a bond and leverage a lot more than $80 million for housing development.
3) Finance construction of infrastructure and/or buildings of a project.
4) Add county money to a project applying for low-income housing tax credits (LIHTCs) to make the project more competitive and more likely to secure the tax credits.
5) Finance homes for families between 60 percent and 140 percent of median income which are not covered by LIHTCs, thereby creating more diverse communities while providing more housing.
6) Buy land for affordable housing, as we did for the Rice Camp Senior Housing Project.
7) Do a pilot project with tiny homes or a “Housing First” project for homeless.
8) Increase the number of federal HUD vouchers by paying for some of the vouchers ourselves, thereby maintaining more than the level granted by HUD, which qualifies us for even more HUD vouchers.
Question/Comment: What existing service or line item in the county budget will be displaced by an affordable housing earmark?
Answer: None. No line item will be impacted. In recent budget decision-making on FY19 county budget, the council approved Councilmember Mason Chock’s proposal to raise real property tax rates on the vacation rental and residential investor properties.
These increases in real property tax rates will generate about $4 million in new revenues each year. While some on the council wanted to use all of the $4 million for affordable housing in the FY19 budget, the council instead unanimously allocated part for housing and part for certain one-time expenses.
If voters pass the proposed charter amendment, all of the additional revenues from vacation rentals and expensive residential investor properties would be used for affordable housing each year.
Question/Comment: What happens if there is a natural disaster or drastic downturn in the economy and real property values plummet?
Answer: This proposal provides flexibility to respond to such challenges. If real property values drop, so will the amount earmarked for affordable housing. But there will be legitimate housing needs for those monies, too. If there is a natural disaster, it is likely there will be a large need for housing — both temporary and permanent.
At such times, there are also great opportunities to acquire land for future housing, as we did with Kalepa Village land after Hurricane ‘Iniki. Building affordable housing at times like these also helps to keep contractors busy and revitalize the economy while expanding the affordable housing inventory that will be needed again in the next economic upturn.
In summary, affordable housing is perhaps the most important and complex challenge facing Kauai County today. Funding this critical work is only the first step, but it is essential. Strong voter support is the best way we can all contribute to a lasting, long-term solution — first by supporting the council in approving Resolution 2018-23 to put the amendment on the ballot (send testimony to email@example.com) and second, by generating an overwhelming affirmative vote in the General Election that puts our money where our mouth is — for affordable housing!
Councilmember JoAnn Yukimura currently sits on the County Council and was mayor of Kauai from 1988 to 1994.