Making The Case for Affordable Housing in Hawaii Hawaii Honolulu

Making The Case for Affordable Housing in Hawaii Hawaii Honolulu, HI – February 21, 2007 Jeff Loustau – Executive Director California Housing Consortium The Affordable Housing Challenge: Hawaii’s Crisis Fits a Pattern WHY do we find ourselves in an affordable housing crisis? WHAT does this mean for our families and our future? HOW do we make the case for positive change? San Francisco, CA 415.677.4436 www.calhsng.org California Housing Consortium – statewide ‘big tent’ organization advocating for affordable housing; co-chaired successful $2.85 billion PROP 1C housing bond in Nov. ‘06; CHC is an affiliate of NHC… National Housing Conference – the nation’s premier affordable housing and community development advocacy organization over the past 75 years; Center for Housing Policy is research affiliate of NHC. Washington, DC 202.466.2121 www.nhc.org WHY we face an affordable housing crisis: an unfortunate, familiar problem CHC’s Paycheck-to-Paycheck is available in an on-line, interactive database format (www.nhc.org) Paycheck-to-Paycheck compares homeownership and rental affordability for over 200 Metropolitan Areas and More Than 60 Occupations… Affording a Home in Honolulu… When income growth lags behind real estate appreciation… Honolulu Homeownership: An Increasingly Elusive Dream for Workers Honolulu Homeownership: An Increasingly Elusive Dream for Locals Median Home Price: Has nearly doubled in 5 years to $585,500 Mortgages for non-owner-occupied homes at 25% of total (well above national avg.) Even health, education, public safety workers hard-pressed to buy home in their community Despite 13,600 new jobs in 2005 and 14,100 new housing units, 2/3’s were single-family – Source: National Assn of Realtors, July ‘06 In 2005, 350 purchase reservations taken for the 249-unit Hokua condominium in the first day sales opened… HOKUA at 1288 Ala Moana Prices range from $535,000 to $5 million Affording an Apartment in Honolulu… Honolulu Rental Case Study Average Apartment Scenario: Economic burden jeopardizes stability of commitment to jobs and schools; Single-parent households especially hard-hit – forced to spend 40-50% of income on rent; In fact, not enough new rental housing being built – strain on existing stock leads to overcrowding, substandard conditions, health risks. WHAT does this mean for our families and our future? A quest for balance… Supply Demand CA housing production averages 155k units/yr ¾ of new production is single-family detached CA’s Population growing by 500k every year 3/5 pop. increase via births CA housing demand is 225k new housing units/yr Bottom Line: our economic engine stalls; our kids can’t afford to live near us Growing Lack of Affordable Housing Impacts Our Quality of Life… > Air Quality/Commute Time > Open Space/Environmental Stability > Social Fabric/Family Cohesiveness > Quality Housing/Health & Safety > Education/Classroom Cohesiveness > Energy Use/Transportation Efficiency > Attract Quality Workforce/Enhance Stability Addressing a broken housing delivery system… Land Use Planning Establish regional needs assessment – in concert with local housing elements Incentivize regional housing production – zone ahead Synchronize business growth with housing, commercial, and transportation expansion Regulatory Reform Protect environmental sustainability by means of regional environmental impact reporting in concert with land use planning Support local/regional planning through the adoption of regional blue-prints in order to avoid case-by-case opposition Encourage green building practices Catalytic Public Funding Expand shelter and supportive-service rental housing for very low income households via local (tax increment), state (bonds), and federal (tax credits, taxexempt bonds) resources; Leverage private investment in rental and homeownership housing with public seed money and incentives (e.g., infrastructure, transit-linkages) A reasonable objective: quality housing can be affordable, well-managed… HOW we make the case for change: building awareness and resources A broad coalition appealing to the voters’ sense of compassion… Ensuring Ongoing Catalytic Public Funding … $2.85 Billion General Obligation Bond November 7, 2006: > $750MM – affordable rental housing, emergency shelters, farmworker housing > $750MM – first-time homebuyer programs > $850MM – to incentivize ‘infill’ development > $300MM – to promote transit-oriented dev’t > $200MM – for more parks around housing A summary of the voting results: 55.6% of electorate turned out Democrats supported 69-31% Independents supported 57-43% Republicans opposed 60-40% (7) counties previously against Prop 46 in 2002 now support 1C Of the (23) counties against 1C, opposition less than 1,000 votes in all but (6) PROP 1C Breakdown -- $2.85 Billion Transit-Oriented Dev’t Incentive ($300MM) Rental & Shelter Programs ($750MM) Housing-Related Parks ($200MM) Infill Dev’t Infrastructure Incentive Homeownership Programs ($650MM) ($850MM) Housing “Innovation” Fund (tbd) ($100MM) The Challenge: Make the Case Stronger PROP 1C should result in 40,000 new units over 3-4 years, then the money runs out. Californians approved a record $42 billion in infrastructure related general obligation bonds in Nov. 2006 (incl. transportation, education, housing, levee repair, water storage) but can we afford growing credit card debt? California needs to follow the lead of Florida, Illinois, Ohio, Massachusetts, and other states and establish a ‘pay-as-we-go’ state housing trust fund California’s Search for the Holy Grail: a permanent state housing trust fund Options for a Permanent Source in lieu of continued dependency on general obligation bonds: > real estate transfer tax (unlikely in CA – Prop 13) > document recording fee* > transient-occupancy tax > reduction in mortgage interest deduction *a fee of $50 per document recording (mostly real estate but also births, marriages, etc.) is estimated to raise approximately $500MM per year A broad coalition of support is essential to motivating the electorate… State Housing Trust Fund Making the Case that the Need for Affordable Housing is Everyone’s Issue > most vulnerable in society > low-to-moderate working families > first-time homebuyers > new college grads, our kids The Challenge for Hawaii is to build… Hawaii’s current population of 1.2 million Is expected to grow to 1.8 million by 2025 …a 53% growth rate, 3rd highest in the U.S., 1/3 via international migration; service-sector economy depends upon its workforce… …according to a plan that balances economic prosperity with the needs of its workforce.