Supply key to housing crisis

LIHUE — Kauai County Councilman Arthur Brun said his employer, Hartung Brothers, has been trying to build farmworker housing on its Westside property.

“We want workers to live right on the land,” he said at the Kauai Board of Realtors general membership meeting on Friday.

But there’s a problem.

“There’s so much red tape to get it done,” Brun told about 100 people at the Aqua Kauai Beach Resort. “It’s a battle.”

“The politics have gotten in front of the daily living,” he added.

His comments exemplified some of the points guest speakers Paul Brewbaker of TZ Economics and Rick Cassidy made during their humorous and analytical 90-minute program on economics and housing.

Their main point seemed to be that there is a lack of affordable housing, and part of that is due to government regulations that limit building.

“My whole thing is, let people build,” Brewbaker said.

But they also noted high housing is, after all, the cost of living in paradise.

“It’s probably never going to be as cheap as we want in Hawaii,” Brewbaker said. “If it were, other would come here and bid up the price.”

County Councilwoman JoAnn Yukimura distributed an outline regarding affordable housing, which has been a significant part of her work as a councilmember for 22 years and mayor for six years.

The recently updated General Plan for Kauai says it will need 9,000 additional housing units over the next 20 years. About 8,000 need to be affordable, which is defined as housing with rent or mortgage cost no more than 30 percent of household income for families with incomes below 140 percent of median income.

A public hearing before the Kauai County Council on an affordable hosing charter amendment is scheduled 1:30 p.m. June 27 in the Historic County Building.

The amendment proposes to earmark 3 percent of real property taxes to provide capital for affordable housing.

“Since the $40 million in federal funds provided after Hurricane Iniki ran out three years ago, the county has had no reliable source of capital available for the development of affordable housing,” according to papers presented by Yukimura.

If the amendment is approved by voters at the general election on Nov. 6, it is projected to generate about $4 million per year.

The money will support the development of affordable housing, including the purchase of land, funding for infrastructure, interim financing and additional housing rental vouchers.

Brewbaker said he wouldn’t call the current housing market a bubble, but there has been a gradual improvement in economic circumstances.

“This month is the ninth birthday of the U.S. economic expansion,” he said. “If we don’t get vaporized, then it will just keep on going. “

The economy of the islands, he said, used to be a rollercoaster. Now, it’s an escalator. If we stay on this path, the economy should hold, “as long as nobody launches missiles,” he said.

He expects new home construction to focus on high-end and low-end homes, but there’s a problem with that.

“What’s going to be missing from this picture is the housing where most of us live,” he said.

Home building today, Brewbaker said, is “worse than it was at the worst time” in all the data he has collected, and he’s not sure why production hasn’t been able to claw its way back.

Cassidy said the reason we don’t have workforce housing is a supply problem.

“You get supply, prices go down,” he said.

In the current economy, there’s a catch.

When the real estate market is strong, listings, sales and jobs go up, Cassidy said.

“Ever time prices go up, regulation goes up,” he said.

The men referred to “a lot of stupid regulations” that force everyone to jump through hoops and deal with what Brewbaker called the “gatekeeper process.”

“What we have is a Robin Hood policy,” Brewbaker said. “Steal from the rich, give to the poor.”

He suggested the focus must be on fewer regulations and more creativity to increase the housing supply. The use of public lands should be in the discussion, he added.

“How bad would it be to have too many homes for the first time ever?” Brewbaker asked. “Supply is the issue.”