Friday, May 27, 2022 |
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• Housing crisis solutions
Housing crisis solutions
By John Love
Kaua‘i’s crisis in housing for low and middle income people deepens. It is heartening to read that Mayor Baptiste has formed a task force to address at least a part of the problem.
The causes of this problem are broad and deep. There are many thorny issues. I offer some suggestions, not as solutions, but as concepts which may lead to a better chance of bringing about significant change. Some, as the Mayor has suggested, may involve partnerships between government and the private sector.
Our zoning, land use and property tax laws need to be revamped as a whole, not piecemeal. They have evolved over time but do not reflect today’s economic realities. Agriculture is waning. Agricultural land poses a number of challenges. The owners of fallow sugar fields are losing money. They pay taxes but have no income from the land. Much of that land has enormous potential value as residential property. Tourism has emerged as a dominant force. Wealthy people have discovered Kaua‘i as a place for second homes. Given these factors and our small size, market forces are driving land costs sky high.
Several principles should govern how our laws are modernized. Foremost, private property right must be preserved. Government may properly put broad limits on property use for the good of the community. Government may also build incentives into the law, but In the end, the rightful owner should determine how the property is used. It is wrong and usually counterproductive for the County to dictate how the developer (read property owner) uses the property and sets the target market.
Second, the laws should encourage the development and sale of lots for residential housing at the lowest possible cost. The current owners should be able to make a good profit, or they will sit on the land or look to non-residential use. Encouraging the sale of small lots (compared to the “gentleman farmer” standard) is one obvious answer. However, with much of our land zoned agriculture, subdividing into small lots is discouraged if not illegal.
Third, government should focus on what it can do best, namely to provide roads, water and sewers and a sensible regulatory environment. Public development, ownership, and management of housing should be a last resort. The various county departments can help a lot by being far more proactive in supporting people who want to develop lower cost housing. Planning approval and permitting should be streamlined, because time is money. The Department of Water should re-order priorities to provide more timely support for developers. We wince when we read that a small affordable housing development near Kawaihau is stalled because the Water Department can only support about half of the number of meters required, and that it may take years before they can. We wince when we read about negotiations between a Moloa‘a developer and the Water Department regarding a large storage tank which the Water Department should provide but won’t be able to afford for years to come.
Fourth, efforts should be renewed to promote a healthy agricultural industry. Subsidies are not the answer. We should take a serious look at the revolution which took place in New Zealand following 1985. Then the nearly bankrupt nation was forced to end subsidies on sheep ranching, their single largest crop. Very tough times for the ranchers followed. They rallied, took big risks, and diversified in a big way. Today in New Zealand a variety of farms, including tree farms, are flourishing. Besides wood and wood products, they export fruits and vegetables to the Pacific Rim, venison and alpaca wool to the world, and compete in the wine markets.
Coffee is a spectacular example of what can happen on Kaua‘i given the right circumstances and a company willing to take big risks. We need to look for other opportunities. Fruits and vegetables seem obvious, but we are far from self sufficient, let alone becoming exporters. Part of the problem is that farming is a tough and very risky business, particularly on a small scale. Another part is that some supermarkets are loath to handle local farm products. They cite lack of all year availability and other shortages as part of the reason. Perhaps cooperatives can help solve some of the problems.
The local farmer’s markets seem to be flourishing but some of the rules and regulations seem to inhibit their growth. We should turn that around as an interim step toward encouraging more people to become farmers. For example, the Hanalei market needs a venue. In combination with the craft fair, they became too popular, and wore out their welcome in the current venue. Regulations should be relaxed, to encourage regular customers to be able to place orders in advance, making it easier for the farmer to serve more customers.
Back to housing. The County of Kaua‘i has been trying to expand its low cost rental housing program. From time to time they have been able to build a handful of units and offer them as rentals to low income families. There typically is a waiting list of hundreds for each new unit.
From outward appearances, the County does a good job of managing these rentals. Still, there are serious problems. Inadequate supply is the most obvious. The County must dedicate precious resources to property management, including means testing the renters to assure they continue to qualify. Finally, this is not a step toward home ownership for most.
To try to help those who don’t qualify for low income housing, the County has a law by which they can require developers of larger projects to dedicate up to 15% of the project to “affordable housing.” In view of the crisis, some Council members have floated the idea of upping that requirement to 25%. That is deeply disturbing, never mind the vagueness and ambiguity in what may be considered “affordable.” Such requirements add to the property owner’s development costs and must be passed on the those who purchase the land. The Council wants to dictate how the developer will use private property, without any compensation. Fifteen per cent is bad enough, but where does it stop? How about 50%? Or unmask socialism for what it is and demand 100%? When we lose property rights, we lose one of the most essential pillars of freedom which sets America apart from most of the world.
On the other hand, it is proper for the state and local governments to manage what is already public property. The County of Kaua‘i doesn’t own much property but the State certainly does. There must be a way to make some of that land available for affordable home ownership. To do so will probably take a three way partnership between the State, County, and the private sector. The State might offer long term leases at low cost. It would retain control of the land use to avoid possible abuse by speculators. The homeowner’s rights should be carefully spelled out, including what happens if the owner dies, or wants to sell his home, or when the lease expires.
John Love is aresident of Kapa‘a
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