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Council approves affordable housing funding commitment

LIHU‘E — In a move to set a floor for affordable housing funding, the Kaua‘i County Council unanimously approved a measure on Wednesday that would allocate 2 percent of real property tax revenue each year to a housing development fund.

Proponents see Bill No. 2888 — introduced by council Vice Chair Mason Chock and Council Member Luke Evslin — as a chance to improve the County Housing Agency’s ability to plan long term and allow them to improve the county’s options in securing bonds to fund housing projects.

Chock — in his last council meeting before terming out of office — reiterated support for the bill, describing it as “one more tool in the toolbox” in dealing with the affordable housing crisis.

This summer, council members voted down a similar proposal that would have put a charter amendment allocating 2 percent of property tax revenues to affordable housing on the ballot.

The measure passed Wednesday is less binding than that charter amendment would have been, but more binding than a similar resolution passed in October. Unlike a charter amendment, it can still be overturned by a majority vote of the council.

A selling point of the measure was that the guaranteed source of funding would help float revenue bonds, which allow them to generate more funds for large-scale projects.

Public finance lawyer Brian Hirai, who was brought in to answer questions at an October committee meeting, cast some doubt about the ability of the proposal to help the county access revenue bonds, saying it would not make accessing these bonds possible.

However, he also discussed the benefits of establishing a guaranteed source of funding.

“It’s an enhancement,” said Hirai. “It could make the bonds more marketable. It could make the credit evaluation more favorable.”

County Housing Agency Director Adam Roversi explained at the meeting that a guaranteed baseline of annual funding would help him with long-term planning.

“Having that reliable stream of funding enables better planning for long-term projects completely irrespective of whether or not those funds are ever used for a bond program or not,” said Roversi. “In my mind that is a subsidiary benefit.”

Though council Chair Arryl Kaneshiro supported the measure Wednesday, he reiterated his preference for funding housing through the conventional budget process — which was his reason for opposing the 2 percent allocation through the charter amendment. He also said people should temper their expectations in regard to what the measure would accomplish.

“I’m OK with it,” said Kaneshiro. “But at the end of the day, this doesn’t do anything more than we did in the budget.”

Last year, the council gave $3 million to the housing fund through the normal budget process. Based on the real property tax revenues from last year, the 2 percent allocation would only guarantee a modest increase to $3.7 million.

The allocation is only a floor, however, and could be substantially more depending on what the County Housing Agency requests during the budgeting process.

Roversi clarified at the previous council meeting that he might still come forward with a project that required more funding than 2 percent.

“I would not want this dedication to foster an attitude that, ‘that’s all you get,’” said Roversi.

The measure bears resemblance to a Maui county charter amendment, passed in 2020, which dedicates 3 percent of property tax revenues to an affordable housing fund. The Maui County measure contributed to a massive $58 million appropriation to the Maui County affordable housing fund this fiscal year.

This was both Kaneshiro and Chock’s final council meeting. Both termed out after each serving eight consecutive years, or four consecutive two-year terms. The five other council members all won reelection last week. At the next meeting, new members Mel Rapozo and Addison Bulosan will take their places on the council.

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Guthrie Scrimgeour, reporter, can be reached at 808-647-0329 or gscrimgeour@thegardenisland.com.
Source: The Garden Island

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