Councilmember KipuKai Kuali’i and Council Chair Kaneshiro have introduced Bill 2774 that if passed, will effectively eliminate the construction of any future workforce/affordable housing in the town cores of Lihue, Koloa, and Kalaheo.
Seriously. You can’t make this stuff up. I am sure Bill 2774 is well-intentioned, but I am even more sure it is seriously misguided.
Bill 2774 on tomorrow’s Council agenda, proposes to eliminate for a period of ten years the current law requiring at least 30% of all new housing development to be affordable.
The specific language of the proposed Bill 2774 states:
“Sec. 7A-1.4.2 Exemptions.
The workforce housing requirements of this Chapter, shall not apply to
the following:
(a) Projects within the following special planning areas and design
districts, developed at or above the maximum density allowed:
(1) Lihu’e Town Core Urban Design District as defined in
Title IV, Chapter 10, Article 5A.
(2) Koloa Town Walkable Mixed-Use District as defined in
Title IV, Chapter 10, Article 6.
(3) Kalãheo Town Walkable Mixed-Use District as defined in
Title IV, Chapter 10, Article 6.
(In addition to preventing low-income residents from living in the town cores, if passed by the council the construction of new affordable housing will also be eliminated in the below situations as well.)
(b) Projects outside of Visitor Destination Areas and Special Management Areas in residential or mixed-use zoning districts with a density of R-10 or greater, consisting of multiple or single-family attached dwellings, developed at or above the maximum density allowed.
(c) Any affordable or workforce housing development developed by or for the County, either by itself or in partnership with another housing development organization, is exempt from the requirements of this Chapter.
(d) The exemptions in subsection (a) for special planning areas and design districts and in subsection (b) relating to zoning density shall expire ten (10) years from the date of their adoption.”
By eliminating the developer mandate to build a minimum number of workforce/affordable units, you can be assured that there will be no workforce/affordable units constructed. Instead of elimination, the Council should consider incentivization. Don’t get rid of it, but rather make it more attractive.
I have written this in the past, and I will repeat it again here: “The invisible hand makes them do it. Without government serving as a counterbalance, the invisible hand of free enterprise drives all development to sell to the highest bidder. More homes built for the market do not create more affordable housing. The trickle-down theory does not work.”
Developers will build to the top of the market to maximize their profits. Those who believe the addition of market-priced inventory is going to somehow increase the inventory of affordable units have been reading far too much Adam Smith.
In Hawaii, affordable housing equals “below market” housing, which will only be constructed if mandated by the government.
The Council is proposing to create a housing policy that eliminates the requirement for developers to build workforce housing, thus making it more expensive for workers to live in town cores closest to their places of employment.
It is surreal.
Two years ago the Kauai Council doubled the density in the Lihue urban core without obtaining any additional (above the existing 30% requirement) commitment from the landowners to build affordable housing. The value of these Rice Street properties was dramatically and instantly increased, and there was no reciprocal public benefit required by the Council. Now, the Council proposes to increase their largesse to these landowners and many others around the island even further by eliminating completely the meager workforce/affordable housing requirements now in place.
The Council should turn this proposal on its head and increase the requirements for workforce/affordable housing just as they already increased the density. Further, the Council should provide aggressive property tax incentives and other measures that reward and incentivize the development of housing that local residents can actually afford.
Local residents who work in restaurants, offices, and small businesses located on Lihue, Kalaheo, and Koloa deserve to be able to live, work, and play in those same neighborhoods. We need more workforce/affordable housing in our town cores and not less.
Readers, residents, and voters are encouraged to offer testimony via counciltestimony@kauai.gov before noon on Wednesday, July 8th, and/or share thoughts after that date with all seven councilmembers at councilmembers@kauai.gov.
Please, take the time and engage this issue today, with your Kaua‘i County Council.
GaryHooser's Blog 
I sent emails, Gary. This is just terrible. Thank you for notifying me about it.
Thank you! The introducers and their supporters apparently feel that if we just make it easier to build all housing, and remove all requirements to build affordable housing – that the developers will build more units and that increased inventory will create a more available inventory of affordable houses. While in principle more inventory should lessen demand and lower the price…in Hawaii the demand is insatiable and affordable housing will only occur if a government mandates it so. Developers will always build to market and maximize their profits…that is natural.
Yes, I believe you are correct, Gary. In principle it should work except this is Hawaii. Even during a pandemic, we are being actually being sued by parties from other states to ‘open up’ for their traveling needs. That alone should demonstrate the incredible desire to travel to and/or to live on our islands. This desire encourages builders to keep building luxury housing, estates and the like, because there is cash to be made. Our government must recognize that the only way for affordable housing to happen is if our state government demands it.
Used to be a strong supporter and donor to Gary. He’s lost sight of how economics works. Yes, it’s admirable to seek less-expensive housing for people. We can build more — greater supply leads to lower prices; or we can have government provide the “invisible hand” in the market.
You’re a developer with $10M to invest in housing on Kaua’i. Labor costs are high; land costs high; building materials high. You plan to build ten (10) units, but three must be below market value. This cuts into projected revenue. What do you do? You could charge “above market” prices for seven to compensate for the three. This increases costs for other families. It’s a hidden tax on some to pay for others.
Or you say, “F it!” You decide not to build here. This limits construction, and limited supply increases ALL housing costs for everyone. Gary claims to be compassionate, but he actually makes it harder for everyone.
We will have to agree to disagree on this one.
That’s fine. Understand. Good people can have different views. Still LOVE you and appreciate all you do.