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Isle housing plans
should favor lower-
income families

THE ISSUE While state leaders agree that more affordable housing is needed, they have different ideas about how to achieve the goal.

LAWMAKERS and Governor Lingle agree that Hawaii sorely needs homes people of moderate and lower means can afford. They are at odds as how to get them built, how much tax revenue -- if any -- to give up, what income-level populations should primarily benefit, how to get developers on board, which zoning and permitting laws to set aside, whether community views on projects should be considered, how to raise or direct money to pay for them and a host of other issues.

Whether differing factions can find common ground while accomplishing the goal will play out as the legislative session heads into its final weeks. What should not result is developing inappropriate locations for housing or building homes still out of reach of those who most need them.

Hawaii's real estate buying boom has sharply increased home prices. On Oahu, the median price last month stood at a whopping $550,000. While demand has grown, new construction has not kept pace.

Proposals have been working their way through the Legislature, but House and Senate measures still vary greatly.

Among the differences are whether priority for loans and grants from the state's housing trust fund should go to developers who build homes for people making up to 140 percent of median incomes, about $92,000 a year, or whether the target should be for families earning up to 80 percent of the median, about $40,000. Since those with lower incomes need more relief, priority should go to them.

Excise tax exemptions, if any, also should go to projects that provide the largest percentage of units to lower-income families. The governor prefers exemptions be given to developers who can get units up as quickly as possible, starting July 1, and aimed at the 140 percent median level, but that would favor builders with plans already in the works and defeat the fund's purpose.

Also contentious is the state's conveyance tax. At present, $1 is levied for each $1,000 of a home's sale price, one of the lowest rates in the nation. The governor prefers the Senate's plan to keep the rate the same, but transfer 50 percent, rather than the current 25 percent, to the housing fund. The House would raise the rate for all property sold for more than $600,000, or as an investment property or second home. However, a better method would be to place the tax on a sliding scale, drawing more from expensive property as well as investment purchases.

To speed construction, the Senate plan would exempt projects from zoning and permit regulations and cut Land Use Commission authority. This is a bad idea. Land use rules protect the state's environment and cultural resources. Once homes are put up, mitigating long-term effects would be difficult, if not impossible.

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