Affordable Housing
October, 2004
An adequate supply of affordable housing is vital to a vibrant economy, strong families, a drug-immune community and a high quality of life. Everyone benefits when there is sufficient affordable housing.
The Vision
Let us begin with the end in mind. We are not just building housing. If that were so, we could plop those houses here and there without a care. In fact, we are building neighborhoods and communities. Several goals come together here. We want housing that is well designed, sturdily built, safe, clean, and comfortable. We want the units to be affordable, not just in terms of mortgage payments and rents, but in terms of ongoing maintenance and repairs-e.g., common area charges, utilities, etc. We want the housing to be close to schools, workplaces, stores and professional services or at least close to transit stops for convenience and lower transportation costs. We do not want affordable housing located in environmentally unsound place. We also want to locate them in places suitable by our community and/or general plans. We want to insulate our affordable housing from the market to ensure that they are permanently affordable; otherwise, in Kaua`i's real estate market, an affordable home will have a short life, minimizing the effectiveness of the large government or private subsidies that are made on behalf of the community. Finally, we want the affordable housing to be integrated into the community because we envision a Kaua`i where all people are valued for who they are rather than how much money they have. We want our communities to be places where people live together in harmony and aloha.
Developing an Affordable Housing Strategic Plan
How do we get there? The following are the steps and elements I would suggest.
First, the County needs to develop a strategic plan for affordable housing. I envision that the planning process would take 2-3 months, if done well and provided with the required support. It is a best practice to plan before you act.
In preparing its strategic plan, the County needs to learn from its past. We need to look at what we have done in the last 15-20 years. How many affordable units were produced by private and public actions? At what subsidy, if any? How successfully (as measured by the vision of what we seek)? How many are still affordable? What worked and why? What failed and why?
We also need to look at other jurisdictions both within and without the state of Hawai`i where the problem has been successfully addressed. We need to examine the "best practices" in providing affordable housing.
Then we need to gather the best minds and broad range of perspectives-i.e., all the stakeholders-in a well-facilitated planning process and develop a plan for Kaua`i.
My ideas for the strategic plan
1. The County must adopt "smart growth" principles in its planning for
communities and for affordable housing projects. Adopting the concept of compact growth will insure optimum use and cost of infrastructure for development. While this is an important principle for all housing and development, it is especially important for affordable housing which can least bear the cost of infrastructure. To the extent that government will fund the infrastructure for the community to assist and support development, the smart growth principle of compact growth will ensure the "biggest bang" for the scarce government or private "buck," whether applied to a single project or the community at large.
2. The provision of affordable housing must be seen as a community problem
not just a government problem. Anyone seeking to develop land on Kaua`i must contribute to the affordable housing solution. Thus, a percentage of every development should be affordable. This percentage should be applied consistently to give developers certainty, and it should be reasonable so as not to make the development unfeasible. We could also consider giving density bonuses and other appropriate incentives. In places like Davis, California that have this requirement, developers often partner with skilled nonprofits to provide the affordable components of their developments
3. Given the housing vision stated above, affordable housing produced by public
or private subsidy should be permanently affordable. This can be achieved through 90-year buy-backs, rental projects and limited equity cooperatives and land trusts.
4. The affordable housing provided by developers should be located onsite or
near the development and integrated into the community. By locating housing in or close to the market housing, we can avoid the challenges faced by stand alone affordable projects and will be able to "piggyback" onto the infrastructure for the market housing, thus avoiding creating "low income" ghettos and all the problems that they breed.
5. Housing for the very low-income and special needs groups require very deep
subsidies. It is here where government monies should be focused since the margins are very difficult for private developers to address. The projects should be carefully designed to have the proper social services support that will help these families transition to greater self-sufficiency. An ongoing model on Kaua`i is the Mutual Housing project behind Kalapaki Villas in Lihu`e.
6. Self-help housing projects also help to transition renters with very little hope
of owning a home into homeowners and a higher level of self-sufficiency. These are worthwhile projects to incorporate into a plan.
7. Institutions with students, nurses and teachers used to provide housing as an
essential pre-requisite to recruitment. The need for affordable housing today by all three "professions" is as great or greater than in the past, but no such housing exists today to my knowledge, probably due to maintenance and upkeep costs. These costs could be effectively addressed by creating limited equity cooperative housing which would be self-owned and managed. This would take the management burden off of the institutions and additionally would give the occupants the privileges of homeownership (tax deductions for mortgage interest and property taxes as well as return on their down payment or investment) that would enhance their discretionary income. This is also a good option/incentive for employee housing.
8. Any strategic plan needs to address the economic cycles that Hawai`i is known for. The housing price cycles that occur are related primarily to tourism occupancy cycles. When visitor occupancies are down due to airline strikes, terrorism attacks, recession or over building, there is no housing crisis and affordable housing of the most luxurious nature (e.g. vacation rentals turned long term) is available. Occupancies in county rental projects drop drastically and create huge holding costs. The tendency is then to get rid of (sell off, condominimize, etc) these affordable units and stop all building of affordable units (even though this is the best time to build since contractors are busy and prices are lower) because "they are not needed any more", but when the next cycle of high visitor occupancy and real estate sales comes, the housing crisis is worse than ever. One way to address this is large vacancy reserves, but I am sure we could think of other ways if we do some collective thinking on this.
Conclusion
The above thoughts represent a draft, a work in progress. My hope is that it will stimulate a lot of thinking and exchange. My vision is that we will be able to come together with all our creativity, knowledge and goodwill to develop a successful strategy to address this issue which has such an impact on the quality of life of individuals, families and our community at large.
