[ OUR OPINION ]

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Use caution in promoting
affordable housing

THE ISSUE A gubernatorial task force has recommended that the state change its polices to make housing more affordable.

HAWAII'S population is expected to grow through the rest of this decade, but housing to accommodate that growth will become less affordable unless major steps are taken. A task force appointed by Governor Lingle has recommended that incentives be implemented to increase housing, but legislators should guard against creating an erosion of environmental protection or a windfall for developers.

The task force pointed out that 18,000 housing units were constructed during the 1970s, when Makiki was being developed, but fewer than 3,000 homes were built on Oahu during the past five years. The governor says an estimated 30,000 more affordable housing units are needed to accommodate growth in the state.

In July, the governor signed into law an increase in her bonding authority that she intends to use for construction of 17,000 units of affordable housing on state land. The task force points out that "limited land for development" is a constraint, but caution should be exercised in determining which land parcels are appropriate for housing.

The task force recommends a streamlining of the permitting system -- a long-standing complaint -- and further tax breaks to landlords with affordable rentals. However, its thrust is that housing will become affordable when supply meets demand, thus its ringing message: "We need a push to develop all housing."

That message is clear in its recommendations regarding the conveyance tax, an assessment made in all real-estate transfers. The tax is now fixed at 10 cents for every $100.

One-fourth of the conveyance tax revenue goes to the state Rental Housing Trust Fund, which is used to provide low-interest loans or grants to developers or landlords substantially renovating affordable rental units. The task force would double that share, which now amounts to $2 million to $3 million a year.

However, it also recommends that the Legislature drastically change the requirements for an owner or developer to qualify for such a loan or grant. The law now requires that an owner or developer set aside at least half of available units for individuals or families earning less than 60 percent of the area's median income, 10 percent for tenants earning less than 30 percent of the median income, and the remainder for those earning less than 100 percent.

Instead, the task force recommends a threshold of up to 140 percent of the median income throughout a project. That would defeat the purpose of the trust fund -- creating housing for those who can least afford it.

The task force also would increase the conveyance tax on higher-priced properties on a graduated scale. That would discourage expensive sales of land that may be used for construction of affordable housing, and the renters would ultimately pay the higher tax. Governor Lingle is right in opposing any such tax increase.