• Housing is an urgent crisis that has only grown worse.  Significant funding for the long-term is needed to house our local people.  Dedicated funding demonstrates the County’s long-term commitment to resolving this crisis.

• Housing projects take many years to plan and execute.  Promised and contracted funding may not be used immediately but it is required.  Biannual budgets don’t support partners committing significant resources to planning long-term projects

• Long-term stable funding encourages a steady stream of affordable housing projects which helps build the capacity of non-profit and local developers who better support and build our local workforce.

• The need for affordable housing and homeless services far exceeds what we have been providing.  A stable funding source will demonstrate to residents, developers and service providers the Council’s commitment to close the gap.  This will help justify the internal investment in capacity for supporting organizations.

• Other places such as Vienna and Singapore that have fixed their housing crisis use dedicated funding as an important part of their local housing solution.

 

The Empty Homes Tax is designed to incentivize owners of empty homes to convert them to homes for local residents, while also creating a revenue stream for affordable housing and homelessness services, from taxes paid by owners who maintain empty homes.

 

The need is great:

DBEDT’s 2019 Hawaiʻi Housing Planning Study concluded Oʻahu needs 22,168 units to meet resident demand by 2025. Of those, 9,102 units (41%) are for households earning 60% of the Area Median Income (AMI) or less. In 2024, 60% AMI is a single person earning $58,500 or a household of 4 earning $83,520. The average retiree income is near this level at $59,190. Rent for a 2-bedroom unit must not exceed $1,879to be affordable for a 60% AMI household.

 

The County has demonstrated its ability to effectively use available resources to provide affordable housing:

The Affordable Housing Fund has a track record of developing housing at price levels the private market will not build without subsidies. Since its creation in 2007, the Affordable Housing Fund has awarded over $76 million to develop over 2,000 units of housing affordable to households of 60% AMI and below, held as affordable for 60 years, for those in the most critical need of housing. Some of these projects from the City Affordable Housing website include:

· Kahauiki Village - 114 units in their second phase in addition to over $10M in site improvements prior to the first phase.  Demonstrated the ability for a City/State/Private/Community partnership to build the largest community-led project, also run off its own solar grid and incorporating community gardens.

· Maunakea Marketplace - Converting 2nd floor commercial into 38 units of housing for 30-60% AMI, including previously homeless families. This project shows how City commercial lands can create vitally needed downtown housing.

· Pūnāwai Rest Stop - 40 new units of  30% AMI housing and respite housing, the first ever comprehensive model on integrated hygiene, clinic, care, and long term housing.

· Kauhale Kamaile - Site acquisition and building 16 modular units for previously homeless families, housing about 60 previously homeless persons from Waiʻanae. 

· Nā Hale Wilikō - 139 units of senior housing on the former ‘Aiea Sugar Mill site.

 

The Importance of Dedicating Funds to Support Homelessness

The current (CD1) version of the Empty Homes Tax allocates 10% of empty homes tax revenues to address homelessness. Currently, the City dedicates $14 million of its revenue towards homelessness programs, comprising 0.4% of revenues. 

Much more long-term homelessness program funding is needed, especially until the affordable housing shortage has been more effectively addressed.

 

Hawaii County’s dedicated funding approach and the results:

In 2022, Hawaiʻi County enacted Ordinance 22-26, allocating 75% of Residential Tier Two property tax revenues for five fiscal years to address homelessness and enhance housing solutions.  They have already increased county funding for homelessness (beyond the state/federal resources) and have an RFP out for $10.5 million for increased services and housing.  That is about 1.2% of their operating budget, compared to Honolulu, which allocated $14M (about 0.4% of Operating Budget) in FY24 in County funding towards homelessness.  In 2024, Hawaiʻi County saw a 28% decrease in homelessness compared to Honolulu’s 12% increase - a 40% difference thanks to increased funding from dedicated tax revenues. More funds for homelessness programs can help address the lack of housing for transition from shelters.  Currently, over half of those released from shelter in Honolulu County are released back to the street, causing increased City expenditures for police, courts and medical services.