Lingle pushes
housing aid plan

The governor wants to give
state tax credits to developers
building affordable dwellings

HILO » Decrying the "crisis" of Hawaii's high housing costs, Gov. Linda Lingle renewed her call to help developers build 2,500 affordable units statewide before 2008.

HOUSING NUMBERS CRUNCH The Lingle administration has proposed providing an exemption from the 4 percent general excise tax for construction of the first 2,500 units of affordable housing started between mid-2005 and the end of 2006 and completed by Dec. 31, 2007. » The exemption would be capped at $4,000 a unit for a total cost of $10 million. » Affordable housing units are defined as units that can be purchased or rented by persons making up to 140 percent of state median income. As an example, a family of four on Oahu renting a two-bedroom apartment would be able to pay rent of up to $2,069 a month or purchase a home for up to about $390,000.

The Lingle administration proposal, Senate Bill 798, Senate Draft 1, calls for $4,000 in general excise tax credits to private developers who complete the housing by Dec. 31, 2007.

"You've got to do it now because our need is right now," she told guests yesterday at the dedication of 28 new affordable housing units in the second phase of Lanakila Homes in Hilo.

The median price of a home on the Big Island is $365,000, she said. That is cheaper than Oahu but still out of the reach of many.

The situation is "rising to a level of a real crisis, and I don't think I'm overstating the case," she said.

Under Lingle's proposal, any developer creating affordable housing could qualify, whether they build a small or large project. Affordable housing units are defined as those that can be afforded by residents making up to 140 percent of state median income. According to the federal government, Hawaii's median income for a family of four is $67,750.

The first 2,500 units completed by the end of 2007 would qualify under the plan.

The occasion for Lingle's comments was the completion of the $5.8 million Phase IIa of Lanakila, which has been under stop-and-go renewal for seven years. Of 230 original duplex units built in 1951-1962, 100 have been replaced by four-plexes, and 20 more are under construction.

The original plan was to replace all of the original units with new construction, said Lanakila project engineer Mitchell Kawamura. The old units had lead paint, leaking roofs, substandard wiring and plumbing, and other problems, he said.

But as construction costs have risen, the idea of renovating the remaining old units instead of replacing them has become increasing cost-effective, Kawamura said.

The cost of the work, $21 million so far, is paid entirely by the federal government, so the state is now negotiating with the Department of Housing and Urban Development to switch to renovation.

Money in the state housing fund that could have been used to solve housing problems has been "raided" to be spent for other purposes, Lingle told the Hawaii Island Chamber of Commerce later yesterday.

Mayor Harry Kim, attending the Lanakila ceremonies, also declared Big Island affordable housing to be in a crisis.

The county is close to picking a contractor to develop more than 1,000 affordable homes at Waikoloa Village in West Hawaii, Kim said.

The project, called Waikoloa Employee Housing, will use money provided by developers of resorts along the South Kohala coast to provide for worker housing, said county housing head Ed Taira.