Lawmakers float ideas to address housing crisis

The difficulty is trying to raise wages while holding down costs

HONOLULU » With the most expensive housing in the country, working a regular job -- or even two -- in Hawaii doesn't guarantee enough income to pay for sky-high rents.

Several proposals to make housing more affordable are circulating around the Capitol at the start of this year's legislative session.

None of the bills claims to solve the problem of out-of-reach housing costs, but the hope is they'll be a start toward keeping families from ending up homeless on the beach.

"It doesn't make any sense why so many people can't afford a home, can't afford their rent and are homeless," said Chuck Wathen, a board member for Housing Hawaii, an affordable housing advocacy group. "How can this happen?"

A robust economy caused island housing prices to more than double between 2000 and 2006, with the median home price now reaching $630,000 on Oahu, according to the Honolulu Board of Realtors.

At the same time, Hawaii residents earn below-average incomes compared with the rest of the nation, averaging $36,608 per year, according to federal government statistics.

Majority Democrats in the state House are pitching several ideas to put a dent in rents. One would drive down construction costs by slimming down the government's permitting bureaucracy; another calls for charges of only $1 for land leases on most state property; and a third would raise taxes on housing speculation.

"Government needs to step in," said Rep. Maile Shimabukuro (D, Waianae-Makua), chairwoman of the Housing Committee. "We do want to level the playing field ... so the people who are working here are making enough to be living here."

But attempts to control housing prices will be difficult, given the laws of supply and demand. The islands have limited space for development, and people will always be willing to pay a premium to live in paradise.

Expensive housing causes residents to leave Hawaii for more affordable areas of the mainland, which drains the state of its labor force and breaks apart families, said Eugene Tian, a researcher for the Department of Business, Economic Development and Tourism. About 3,100 people migrate from Hawaii each year.

"The government is trying to make the economy grow and the cost of living decrease," Tian said. "It is very difficult to find ways to make one go up and the other go down."

Housing Hawaii is promoting three of its own initiatives in the Legislature -- to issue bonds to create more affordable housing, increase the percentage of conveyance tax revenues deposited into the Rental Housing Trust Fund and give money to county planning agencies, Wathen said.

Proposals in the state Senate will call for repairing 700 vacant public housing units, increasing rental subsidies and providing tax incentives, said Majority Leader Sen. Gary Hooser.

"We'll definitely be placing a strong emphasis on affordable housing, both in providing funds and in rebuilding the existing units," said Hooser (D, Kauai-Niihau). Specifics will be unveiled this week.

Other ideas aim to help lower-income families save money for housing through a state version of the earned income tax credit worth $900 and savings accounts that match contributions, said Brent Dillabaugh, special projects manager for the Hawaii Alliance for Community-Based Economic Development.