End DHHL program for housing credits

The Hawaiian Homes Commission Act, a federal law enacted in 1921, was intended to give homesteads to those of at least half Native Hawaiian ancestry. This was meant as a means of redressing in small measure the loss to the indigenous population after the overthrow and annexation of the kingdom.

There’s plenty of evidence that the Department of Hawaiian Home Lands has fallen short in implementing that intent, of course, but to the extent that it’s done so, the goal remains worthy.

What was never intended of the homestead program, however, is that it should be accomplished to the direct detriment of workforce and lower-income, non-Hawaiian people who also are faced with the state’s chronic and critical shortage of affordable housing.

Unfortunately, that appears to be the upshot of a 5-year-old housing credit program giving developers an exit ramp from their affordable-housing requirements by buying housing credits from DHHL. The law enabling this program should be dismantled.

Counties ordinarily require developers to build affordable housing as a condition of zoning changes for large residential and resort approvals. The 2009 Act 141, signed by then-Gov. Linda Lingle, entitles developers to fulfill their requirement by buying credits from DHHL, paying in cash, land or by building homes.

The idea of the law, due to expire June 30, 2015, was that these private funds could help underwrite the homesteading agency’s housing projects at a time when money was tight. But the program amounts to robbing Peter to pay Paul, as the expression goes. In this case, "Peter" represents those needing affordable housing but lacking the Native Hawaiian blood quantum to qualify for a DHHL lease.

And this is an immense group. The state has projected through 2016 how many units are being built for households earning less than 80 percent of area median income, a target group of affordable housing policy. And it’s coming up short, by more than 6,000 ownership units and 13,000 rental units.

If the developer incentive of affordable-housing credits serves a limited constituency, that cuts into the potential benefit to the population as a whole.

Last week, a story by Star-Advertiser business writer Andrew Gomes documented some of the concerns raised about the program over the years.

DHHL’s 1,296 credits to date were valued at between $97 million and $162 million, based on the agency’s 2009 estimate that each credit was worth $75,000-$125,000. No developers have yet "cashed in" their credits — gaining forgiveness for some affordable-housing construction requirements — but when they do, Hawaii will fall further behind in the effort to fill the need for these units.

DHHL has countered that the program provides more resources at a time of fiscal constraint to develop homes for beneficiaries who have waited for many years to get a homestead. While that may be true, the state — and county — governments have others’ needs to consider.

Unfortunately, state lawmakers so far seem willing to go along with the DHHL argument. None of the five bills introduced last session to extend the program or make it permanent ultimately passed, but one of them came very close. House Bill 2286, which would have made the program permanent, made it through every hoop but fell through the cracks in the chaotic last night of the session.

It’s the county officials who have adopted the correct stance here.

George Atta, director of Hono­lulu’s Department of Planning and Permitting, has urged the repeal of the law, saying that it "undermines the ability of the counties to provide new affordable housing to all its residents.

"The goal should not be to redirect the resources and/or opportunities from one branch of government at the expense of another," he added, rightly.

If government continues to let its incentive fuel be siphoned off in this way, the whole affordable-housing campaign will run out of gas. And this state can’t afford that disastrous outcome.