Posted on: Monday, July 23, 2001

Island Voices
City must promote affordable housing

By Richard Weigel
Director of the Hawai'i Sustainable Lifestyle Network

Prudential Locations research director Ricky Cassiday writes that his studies have shown the best way to provide affordable housing on O'ahu is to eliminate government mandates requiring affordable housing percentages or fees.

I have been studying how residential development affects a community's livability, and find that contrary to Mr. Cassiday's analysis, poorly planned development can have a worse effect than no development at all.

Cassiday suggests that Kaka'ako "landlord" Hawai'i Community Development Agency must not allow land to "lie fallow," because "development helps everyone." Well, we know it helps developers and the real estate industry, but does it always (or even normally) help the community?

Not according to many reports conducted by independent and academic research specialists: Harvard Kennedy School of Government professors Alan Altshuler and Jose Gomez-Ibanez in "Regulation for Revenue" state unequivocally that "available data shows that development does not cover new public costs; that is, it brings in less revenue than the price of servicing it."

And as I previously reported (see "Portland proves healthy economies grow slowly," Dec 17, 2000 Advertiser), a report used for the State of Oregon's Task Force on Growth by author and planning consultant Eben Fodor described the costs of growth to local governments in five parts: Increased taxes; increased public debt; deficit of infrastructure development; deferred maintenance of public resources; and reductions in public services. These costs are motivating "smart-growth" advocates on the Mainland to push for increased impact fees on developers. These fees are among the few methods to ensure development is not publically subsidized through developers passing the costs of growth onto government.

Honolulu, however, already has one of the best-developed systems of development impact fees. And because these fees raise the cost of housing, affordable housing set-asides are the only remaining strategy for keeping costs in check.

One thing we can be sure of is that affordable housing will not grow if the only housing developers build is what's most profitable to them. Promoting affordable housing must remain a central role of local government.