How fast can government agencies turn the legislature’s billion dollars into new housing?
During this year’s legislative session, Hawaiian lawmakers pledged to create more housing on the islands, allocating about $1 billion to a range of projects designed to help a range of residents, from homeless to beneficiaries. from welfare to middle-income households earning close to $100,000. annually.
Now the question is how quickly other parties can step in and convert the historical ownership of the Legislative Assembly into housing for residents.
House Speaker Scott Saiki, who was the lead sponsor of a $600 million bill for Native Hawaiian homes, said lawmakers worked with agencies during the session to prepare them for the influx of money.
But, he said, other parties, including the private sector, will have to step in in many cases. Additionally, Saiki said, another challenge will come with a new governor administration taking office in January.
Assuming Governor David Ige signs the housing bills, the next governor will have a billion dollars for housing burning a hole in his pocket.
“Because we had a significant amount of revenue, it was the right thing for the Legislature to make the investment,” said Rep. Sylvia Luke, who chairs the House Finance Committee. “But now it’s really in the hands of the executive to make these things happen.”
The two main recipients, the Department of Hawaiian Home Lands and Hawaii Housing Finance and Development Corp., are well positioned to get things done quickly. But, as DHHL spokesman Cedric Duarte said, “the devil is in the details”.
For DHHL, the overriding goal is to achieve a vision of placing Native Hawaiians on land reserved under the United States Hawaiian Homes Commission Act of 1920. A century later, that dream remains deferred for approximately 28,700 Native Hawaiian applicants on a waiting list for residencies, farming. and pastoral leases.
Lawmakers gave DHHL broad leeway to use the $600 million to reduce the waiting list, letting the agency use the money to buy available land or units, for example. DHHL may also use the money to provide mortgage or rental subsidies and “other services needed to meet the waiting list.”
“Our goal is to deploy as quickly as possible,” Duarte said.
At the same time, he said, the department has work to do not only to prepare construction projects, but also to plan new functions, such as providing rental assistance. This means putting together policies, procedures and materials to explain the programs to the public.
Although the bill gives DHHL until December to draft a strategic plan to submit to the Legislative Assembly, Duarte said the department hopes to have a plan long before then – ready for release as soon as Ige signs off. The law project.
“We want to make sure everything is in order when we deploy to the community,” he said.
The second largest recipient is Hawaii Housing Finance and Development Corp., which received $300 million.
Representative Nadine Nakamura, who chairs the House Housing Committee, noted that $150 million is earmarked to help develop affordable rentals for people earning up to 100% of the state’s median family income, which was just over $96,000 in 2019, according to 2020 US. Census data.
It’s a segment of the population that is often underserved, Nakamura said.
“We now have a good chunk of the funds to help build those kinds of units,” she said.
HHFDC does not develop anything, but rather provides money to developers who build affordable housing. Typically, developers using HHFDC money also rely on federal tax credits for low-income housing development. Developers can sell the credits to raise equity to help secure bank loans, analogous to the money used as a down payment to secure a mortgage.
Luke said she was optimistic the funds would reach homebuilders who could use them.
“I remain optimistic only because I have heard that there has been much more demand than what we have provided funds for” over the past few years, she said.
In addition, Nakamura said, lawmakers this session provided funding for two additional full-time housing finance specialists and just under $1.6 million for new computer software.
While public money helps developers accumulate the capital needed for future projects, developers of affordable housing often face the same challenges as other developers, including opposition from neighbors and slow approval processes for counties.
That means tax money is hardly a recipe for instant housing, said Kevin Carney, vice president of nonprofit affordable housing developer EAH Housing. It all depends on factors beyond HHFDC’s control, such as how quickly projects can obtain building permits and other necessary approvals for construction, he said.
“No matter what, it’s going to take years,” Carney said in an interview. “Overall, you’re looking at six to seven years to complete any of these projects, and it could be longer depending on a lot of things.”
HHFDC spokesperson Gordon Pang referred requests for comment to HHFDC executive director Denise Iseri-Matsubara, who was unavailable.
While the DHHL and HHFDC projects will get the biggest share of the billion dollars, others will also benefit. For example, the legislature earmarked $15 million to extend a 2018 “pilot program” supporting housing for the homeless, including projects such as Tiny House Villages, through 2026.
Lawmakers set aside $5 million to provide loans to nonprofit community development financial institutions and nonprofit housing development organizations to build affordable homeownership housing projects.
And lawmakers agreed to fund the $500-a-month housing allowance payment to help welfare recipients, tapping into about $57 million in idle federal funds each year.
“Struggling to get by” is part of our series on “Hawaii’s Changing Economywhich is supported by a grant from the Hawaii Community Foundation as part of its CHANGE Framework project.