Concerns about flexibility helped sink affordable housing amendment

A proposed amendment to the Honolulu City Charter that would have doubled yearly revenue for the Affordable Housing Fund was the only one to fail in Tuesday’s general election.

The three others, changing the future makeup of the Planning Commission, bolstering the Clean Water and Natural Lands Fund, and incorporating the Office of Council Services, all passed.

The failed amendment would have raised the amount of real property tax directed to the Affordable Housing Fund from 0.5% to 1%, or from about $8 million to $16 million.

The fund provides rentals for people making 60% or less of the median household income in Honolulu, and expanding its coffers would enable the development of more housing projects, according to the City Council resolution that proposed the amendment.

“The fact that such little money was not approved, it’s disappointing because there was such a tremendous need,” said Kali Watson, chief executive and president of the nonprofit Hawaiian Community Development Board that builds affordable housing. “It obviously leaves less funds available. It makes it a little bit more difficult to do the projects.”

Watson said that even a small amount of additional funding can go a long way toward leveraging more money for projects. For example, his organization received $2 million from the fund in December, then leveraged that seed money to get more funds totaling $22 million, he explained.

Some voters might have opposed the amendment because there are “a lot of competing needs for the use of tax dollars,” Watson said, but “if people want to address the shortage of affordable housing, they need to put up money like that.”

One criticism of codifying the funding in the charter is that it would limit flexibility for its use, which can lead to money just sitting there.

In August, Mayor Rick Blangiardi announced the development of six affordable housing projects that would cost $28 million, drawn from the Affordable Housing Fund. The large amount was available because the fund had been accumulating about $8 million a year for four years, according to Natalie Iwasa, a community advocate and certified public accountant.

“It wasn’t being used to the fullest extent,” she said. “If it turns out a mayor and a Council decide that they’re doing enough already, then those funds just sit there and they’re not available for other services that might be a priority.”

Iwasa argues that allotments for affordable housing should be passed through the city budget process rather than being written into the charter.

“Any time we create special funds or increase special funds, that takes away from our primary funding sources,” she said.