Hawai\u2018i County\u2019s affordable housing policy is a disaster.<\/p>\n\n\n\n
Other counties have their problems as well when it comes to addressing the shelter needs of households who are priced out of market-rate rentals.<\/p>\n\n\n\n
But on the Big Island, the insanely complicated process by which developers are encouraged to build affordable housing has left the door open to abuse that may well rise to the level of criminal activity.<\/p>\n\n\n\n
The cover story in this issue and sidebars provide details. But to make this very long story as short as possible, in 2015, the county gave away hundreds of affordable housing credits, each worth tens of thousands of dollars, to two freshly minted companies, controlled by the same person, with no assurance that the promises of affordable housing he had made would be kept.<\/p>\n\n\n\n
To be sure, not all of the credits that have been awarded over the years \u2013 1,848, according to Housing Administrator Susan Kunz \u2013 were issued inappropriately. But the fact that 18 percent of these (326) went to the same individual, with no history of involvement in housing development; were awarded before his companies even owned the land; and, what\u2019s more, were actually used to effect his purchase of the land \u2013 well, words fail.<\/p>\n\n\n\n
At one point, and perhaps still, those housing deals and perhaps others that were put together by a former staffer in the housing agency itself were the subject of an FBI investigation. If that federal investigation bears no fruit, then it surely falls to the county prosecutor or state attorney general to look into this scam.<\/p>\n\n\n\n
At the very least, the county auditor should investigate how this could have happened.<\/p>\n\n\n\n
The people of the county, and most especially those who still await the promise of affordable housing, deserve no less.<\/p>\n\n\n\n
Whatever the well-intentioned reasons behind Hawai\u2018i County\u2019s affordable housing law \u2013 Chapter 11 of the County Code \u2013 it is time for an overhaul.<\/p>\n\n\n\n
For one thing, there is no requirement for accountability. The code says that the administrator of the Office of Housing and Community Development may <\/em>provide timely periodic reports to the County Council. In more than two decades, not once has any housing administrator made such a report.<\/p>\n\n\n\n For another, there is the system of earning excess credits for developing affordable housing, with those credits sold directly or auctioned off to developers who are then able to use them to get out from under the obligation to develop affordable housing themselves. The county is short-changed when those credits allow for-profit developers to buy their way out of the need to include affordable units as part of their own projects. For instance, if a developer of a 20-unit complex can purchase four credits at $25,000 each, he will effectively get out from under the county\u2019s requirement that he otherwise earn those credits by building four affordable units \u2013 units that would cost far more than $25,000 apiece if actually built.<\/p>\n\n\n\n In addition, the very system of earning credits for affordable housing is so complex, it is vulnerable to manipulation by unscrupulous employees. Housing administrator Kunz was asked what controls are in place to ensure that housing staff don\u2019t get kick-backs or otherwise profit from schemes to exploit this system. She responded by stating that \u201cmultiple departments sign off on any affordable housing agreements.\u201d However, in the two cases examined by Environment Hawai\u2018i<\/em>, that review process was perfunctory in the extreme, with Kunz herself signing off on one of them. The oversight by the deputy corporation counsel assigned to the office at the time, Amy Self, can kindly be described as incompetent. Kunz also noted that employees are \u201cbound by the County Code of Ethics\u201d \u2013 a weak reed to lean on when the temptation to cheat is so great.<\/p>\n\n\n\n Kunz was asked whether OHCD ensures that the credits are awarded appropriately, given that in at least two instances, they were awarded before the developer owned the land, much less had developed any housing. Kunz\u2019s response was forward-looking: \u201cOHCD will verify that requirements and conditions of affordable housing agreements have been met before awards are made,\u201d she stated in a written reply to questions.<\/p>\n\n\n\n With the developers of market-rate housing able to avoid having to include low-income housing in their projects thanks to the trade in credits, the predictable \u2013 and actual \u2013 result has been increasingly dense affordable housing developments.<\/p>\n\n\n\n But Kunz denied that this was the case. \u201cZoning dictates the density of a housing project,\u201d she stated, and not the credit policy. However, zoning has been changed to allow for denser affordable projects, as witness the rezoning approved just last September by the County Council for the affordable housing development in Kealakehe.<\/p>\n\n\n\n What\u2019s more, the Honua\u2018ula project in Kealakehe will be the fourth income- limited rental development in less than a square mile. \u201cIs OHCD concerned about the concentration of low-income housing\u201d in the area? Kunz was asked. No, she replied. \u201cOHCD\u2019s mission is to facilitate and promote the development of affordable housing… It is misleading to categorize all the [Kealakehe] projects as low-income housing, as they all vary in their targeted income levels as well as tenant profiles.\u201d<\/p>\n\n\n\n OHCD developed none of those projects, she added, \u201cand the development and location of these housing projects went through the appropriate public review and approval processes. Their locations are probably more a result of availability of infrastructure such as roads, water, and sewer.\u201d<\/p>\n\n\n\n It is understandable that the Office of Housing and Community Development is eager to promote projects that will address the pressing need for affordable housing. Kunz has stated that the county will need more than 13,000 additional units of below-market rate housing by 2025.<\/p>\n\n\n\n Yet that does not obviate the need to vet developers who are proposing to build projects to meet that need. In the case of Honua\u2018ula, one of the company\u2019s officers has a record of violating hazardous waste laws in South Dakota. Despite this, the \u201cNo\u201d box was checked in response to a question about past environmental infractions that appears on the county\u2019s questionnaire for affordable housing developers.<\/p>\n\n\n\n Kunz states that OHCD is not able to vet private developers. If so, it should at least give members of the public the opportunity to do so. But with most 201-H housing proposals, opportunities for the public to weigh in are limited, with little environmental disclosure required in most cases. When at last the documents in support of a project are delivered to the County Council and the public, the sheer volume of material \u2013 722 pages in the case of Honua\u2018ula \u2013 makes a mockery of the idea that timely and thoughtful review could possibly occur.<\/p>\n\n\n\n The Office of Housing and Community Development has retained a consultant to review the existing policies and law. Its report is due sometime later this year. That could provide a good starting point.<\/p>\n\n\n\n Whatever else happens, the deferential, uncritical attitude toward any project that parades under the banner of affordable housing has to change. This needs to start with the Office of Housing itself, but cannot end there. Council members, the mayor\u2019s office, and every other agency that has blindly embraced any proposal \u2013 no matter how sketchy \u2013 need to step up their game and ensure that county resources are never again squandered in this way.<\/p>\n\n\n\n Two and a half years ago, and in relation to another Hawai\u2018i County affordable housing fiasco, we ran an editorial headlined, \u201cOversight Required for Hawai\u2018i County Housing Office<\/a>.\u201d That is, sadly, still true. <\/p>\n\n\n\n (Environment Hawai\u2018i <\/em>reached out to Raj Budhabhatti, Alan Rudo, and the U.S. Marshal\u2019s Office for comment. No response was received by press time.)<\/p>\n","protected":false},"excerpt":{"rendered":" Hawai‘i County’s affordable housing policy is a disaster. Other counties have their problems as well when it comes to addressing the shelter needs of households who are priced out of market-rate rentals. But on the Big Island, the insanely complicated … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":14483,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,497,338,33],"tags":[7],"class_list":["post-14458","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-editorial","category-june-2022","category-land-use","category-legislation","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/14458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14458"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/14458\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/14483"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n\n\n\nDemographic Consequences<\/h2>\n\n\n\n
\n\n\n\nScrutiny<\/h2>\n\n\n\n
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