Advocates hail boost in rental fund

Supporters of affordable-housing initiatives are calling an increase in the amount of conveyance tax revenue going into the state’s rental housing trust fund a major victory emerging from this year’s legislative session.

Restoring the allocation of conveyance tax revenue for the fund to 50 percent is expected to generate more than $10 million a year over what is currently produced. The fund is administered by the Hawaii Housing Finance and Development Corp.

Advocacy groups such as Catholic Charities Hawai’i are thrilled that the conveyance tax bill passed. Legislative leaders also have cited the increase as an accomplishment for the session. The measure now awaits the governor’s signature before the July 1 deadline.

Betty Lou Larson, legislative liaison for Catholic Charities, said, "No one is producing (affordable units) because it doesn’t pencil out to build these things unless you have subsidies.

"The key is having that subsidy; that’s why the rental housing trust fund is so important."

Conveyance tax revenue is the only dedicated source of funding for the rental housing trust fund. The percentage was set at 50 percent in 2006 but dropped to 30 percent in 2008 due to the recession. It was lowered again and held steady at 25 percent from 2009 to 2012. Last year, legislators increased it to 30 percent.

The 30 percent share generated about $16.4 million for the trust fund in the 2013 fiscal year. The additional 20 percent is expected to generate about $10.8 million in the coming fiscal year, for a total of close to $30 million, according to the HHFDC.

The Legislature also appropriated an additional $5 million for the rental housing trust fund through the state budget.

Coupled with the increase in conveyance tax revenue, the funding effectively doubles that of previous years.

"I think for a lot of the housing folks, they were just totally grateful," said Sen. Suzanne Chun Oakland, chairwoman of the Senate Human Services Committee. "For (the conveyance tax bill) to pass plus for us to get more — I think people’s expectations were a lot lower, so they were really, really actually happy."

Chun Oakland (D, Kalihi-Liliha), known among Hawaii’s state lawmakers for her support for children, seniors, the homeless, affordable housing and other social service-related issues, initially asked for $100 million in general obligation bonds for the rental housing trust fund, which HHFDC said in testimony could finance 600 new units, 250 micro-apartments for very low-income households and 333 permanent affordable workforce rental units.

According to a Hawaii housing planning study done in 2011, as many as 50,000 new housing units need to be built by 2016 to keep pace with market demand in all income brackets.

"We really need about $100 million a year over five years to really make a dent in what’s needed," Larson said.

Advocates including Larson — who also serves as the advocacy co-chair for Partners in Care, a coalition of Oahu homeless providers hoping to end homelessness — have touted building micro-units as a creative way to help alleviate the affordable-housing shortage and combat homelessness.

A measure that would have put $15.8 million toward the construction of micro-units didn’t pass this session, but Chun Oakland said those types of small quarters could still be funded through the rental housing trust fund or other sources.

Many have noted that small units, which provide individuals or small families with personal bathroom, cooking and living areas on a much smaller scale than traditional apartments, can benefit a wide variety of people, including young professionals, teens aging out of the foster system, single parents with young children and seniors living on fixed incomes.

"We recognize that not only do we need funding for homeless services, but we need to have the affordable housing as well," Larson said.

Colin Kippen, leader of the state’s Interagency Council on Homelessness, said he’s pleased the Legislature once again put $1.5 million toward the Department of Human Services’ Housing First efforts.

"The longer a person is in a homeless state, the more destabilizing it is for them," he said.

DHS also received $1.5 million for Housing First programs in the 2013 and 2014 fiscal years. Kippen and Chun Oakland both noted, however, that there has been a shift from funding Housing First through a combination of special fund and general fund appropriations to putting money directly into the DHS budget.

"It was actually a big win to put a lot of this into the budget" rather than pass an appropriation bill, Chun Oakland said. "That means more than likely, hopefully, even whoever the new administration is … we won’t have to fight for (funding) anymore."

Housing First focuses on getting homeless individuals most in need of assistance — especially those with medical conditions in danger of dying on the streets — into stable housing before providing other services.

Lawmakers this session also appropriated more than $7.8 million for low-income housing tax credit loans and set aside an additional $26 million for the Hawaii Public Housing Authority, which is slated to receive $45 million this fiscal year.

Housing and homelessness "wasn’t considered a joint priority," Chun Oakland said, "but with the amount of money that we got, it was a very good (session)."