State: Housing-
agency merger to save
$2 mil a year

A housing-advocacy group
doesn't foresee the move
cutting services

By Rob Perez
Star-Bulletin

While Gov. Ben Cayetano's government consolidation proposals generally have faltered at the Legislature this session, his plan to reorganize state housing functions -- approved last year -- is moving ahead and eventually is projected to save taxpayers more than $2 million a year.

On July 1, the state intends to consolidate the Housing Finance and Development Corp., Hawaii Housing Authority, the Rental Housing Trust Fund and the housing duties of the Hawaii Community Development Authority under one organization.

The idea is to have all the state's housing responsibilities under a single, streamlined organization, paring duplication and inefficiencies in the current system, said Ron Lim, Cayetano's special assistant for housing.

Once the consolidation is completed in the upcoming fiscal year, about 50 of 463 positions -- or about 10 percent -- will have been cut, saving the state nearly $2.3 million annually, Lim said.

The state started eliminating positions as early as 1995 as Cayetano prepared for the eventual consolidation and switched the government's housing focus from development of large master-planned communities like the Villages of Kapolei to development of rentals for the needy.

Most of the cuts thus far have resulted from not filling positions as people retired, quit or were reassigned, but a few people have been laid off, Lim said.

He expects no more than four or five additional layoffs by the time the consolidation is completed.

"We don't want to have a real bloodbath," he said.

In addition to the consolidation cutbacks, the state also plans to eliminate another seven to nine housing positions as part of Cayetano's effort to trim another 10 percent from department budgets in the coming fiscal year, Lim said.

Kathleen Hasegawa, executive director of the Affordable Housing and Homeless Alliance, said her group doesn't foresee the consolidation hurting the government's delivery of housing services.

But she also said the alliance doesn't believe the reorganization will automatically improve services. "That remains to be seen," Hasegawa said. "We don't think consolidations are necessarily an improvement."

Lim said the new Housing and Community Development Corp. of Hawaii will be run by a nine member board, including six representatives from the public.

Its focus will be to provide low-interest loans, tax credits and other incentives to developers for construction of affordable rental housing for special-needs groups, Lim said.

"We want to be facilitators and financiers rather than the actual development entity," he said.

Lim said it took two years for the administration to convince the Legislature that consolidation of the housing functions made sense, with the first year spent addressing major concerns.

That's why Lim isn't surprised Cayetano's current consolidation proposals are running into resistance among legislators as the measures go through the first pass.

"The Legislature won't approve it just because we say it's going to work better," Lim said.