Posted on: Friday, February 4, 2005

ISLAND VOICES
Affordable housing must be addressed

By Scott Bradley

Hawai'i has an affordable housing crisis that is being fueled by a lack of supply and artificially high development costs.

I am encouraged by the attention being placed on the issue by House Speaker Calvin Say and the Governor's Task Force on Affordable Housing. The task force's report to the Legislature was an excellent start to finding long-term solutions to this issue. Now is the time when we must follow through and provide a better quality of life for Hawai'i's residents. We have to make a change.

Between the year 2000 and January 2005, we have seen the median price of housing on O'ahu increase from $295,000 to $505,000, a 71 percent increase that has far outpaced any growth in the median income. With no end to this escalation in sight, the failure to provide adequate affordable housing for our residents will lead to significant social costs such as homelessness and increased crime.

This issue can only be resolved by increasing the supply of affordable housing. To do this, we must eliminate the artificial costs of development created by impact fees, taxes and an inefficient approval process. For example, it can take up to seven years for a large development to complete the existing approval process, and smaller projects can take up to a year.

There are simply too many duplicative elements in both the state and county processes. With two tiers of approvals, the cost of obtaining the proper approvals is eventually passed on to the consumer.

Requirements are also increasingly being placed on developers to fund infrastructure through the assessment of impact fees. Rather than resulting in savings to the community, these additional costs disproportionately drive up the costs for first-time buyers and buyers of lower-priced properties, while increasing home equity for existing homeowners in the neighborhood. In other words, the younger, less financially secure home buyers absorb the cost of infrastructure development while the existing homeowners see their property values increase.

We have seen the result of poor planning for the future growth of our communities in the traffic jams each morning, the aging roads and buildings, and schools without proper facilities for our children, but the costs for these improvements and planning should not be placed on new home buyers alone. All members of the community should share in the care and financing of such critical change for the better. Federal funds, incentives and creative financing are available to achieve these goals, but we must be more vigilant about taking advantage of them.

Increasing the supply of housing is critical to the health of the economy and our community. However, it must not be done haphazardly. Our quality of life is so dependent on the environment, and as we move to develop more affordable housing, we must address very serious concerns relating to traffic, preservation of open space and agricultural lands, and visual pollution. Hawai'i's growth has to include a more efficient use of land, safeguards for the environment and open space, more attractive development, viable transportation options, and in urban areas, new neighborhoods that are more walkable and compact.

Ward and Kaka'ako offer great opportunities for examples of how smart growth can be planned and implemented.

There is a wealth of research and ideas for concrete approaches for tackling the problems associated with affordable housing. There is also an abundance of studies that detail the perils of impact fees and taxes. Examples exist from across the country with ideas for creative financing, efficient government approval processes and new models for community planning.

Hawai'i can maintain its unique appeal while incorporating successful ideas from around our great nation. Probably the most potent message in the governor's task force report was the call made several times for political will and commitment to work together to address affordable housing. As the Legislature gets going this year, I hope the spirit of this report will carry on as we all combine efforts to find a workable solution for our community.

Scott Bradley, a Honolulu resident, is managing director of Coldwell Banker Pacific Properties. He wrote this article for The Advertiser.