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Tuesday, July 15, 2014
Duke Aiona Plan to Reduce Affordable Housing Shortfall 91%
By News Release @ 8:31 PM :: 5474 Views :: Development, Cost of Living

DUKE AIONA ANNOUNCES PLANS TO REDUCE AFFORDABLE HOUSING SHORTFALL BY 91%

News Release from Aiona Campaign

HONOLULU (July 15, 2014) – After meeting with community leaders including builder and nonprofit representatives, Duke Aiona released today a streamlined plan to address the affordable housing emergency in Hawai‘i.

“In Hawai‘i, tens of thousands of residents, including teachers, firefighters, retail and restaurant workers are cost burdened with housing. My plan reduces the affordable housing shortfall by 91% within seven years without raising taxes on any of Hawai‘i’s residents or businesses,” said Aiona.

“I know the legislature sees affordable housing as a priority, so I look forward to working with them to accelerate the availability of affordable rentals throughout Hawai‘i,” said Aiona.

By dedicating a full 25% of corporate tax income revenues to the Rental Housing Trust fund, within seven years, an estimated 19,500 people will have stable, affordable housing, even when they are not able to buy a home. The need for rentals is urgent for those unable to save for a home at market rates where the average home is $700,000.

Underscoring the need for affordable rentals, Aiona said “For those on fixed incomes, who must decide whether to pay rent or pay for medicine, families who must choose between fresh food and rent, and those just starting out in their careers burdened with student loans, these properties will provide stability by remaining affordable for over sixty years.”

Aiona’s plan will be made more efficient by utilizing existing state lands and innovative modular building materials. “We can get families into these units faster and more efficiently by decreasing the cost of building and reducing red tape for builders.”

Reflecting on personal stories he has heard from Hawai‘i residents, Aiona said “I’m proud to be the only candidate who is developing new solutions for this community.”

For more information, please visit his website: www.dukeaiona.com

Photos can be found: https://www.flickr.com/photos/dukeaiona2014

Facebook: http://www.facebook.com/dukeaiona2014

  *   *   *   *   *

AFFORDABLE HOUSING FACT SHEET

Q: What is Hawai‘i’s Median Housing price?

A: In June, the median price of a single-family home on Oahu reached $700,000

Source: Star Advertiser

http://www.staradvertiser.com/newspremium/20140707__oahu_home_sales_Median_price_rises_to_record_700000.html

Q: How is “Cost Burdened” determined?

A: “Cost Burdened” is defined by U.S. Department of Housing and Urban Development as spending more than 30% of monthly income on housing.

Source: http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/affordablehousing/

Q: How does Duke Aiona’s plan contribute to certainty of development?

A: A multi-year appropriation from a designated and dedicated revenue source to the Rental Housing Trust Fund (RHTF) under the Hawai‘i Housing Finance & Development Corporation provides planning certainty for developers and State budget officials. A multi-year commitment will draw more affordable rental developers into the Hawai‘i market. Rentals developed under the RHTF are committed to stay within “affordable range,” up to 60 years, based on the Area Median Income.

Q: What is Hawai’i’s Area Median Income and what are the corresponding “Affordable Rental” costs?

A: In Hawai‘i rentals targeting those earning 30%-80% Area Median Income of $97,900 should cost no more than $1,762/month and can be as low as $513/month, as established by the U.S. Department of Housing & Urban Development.

2013 -- Honolulu Area Median Income (AMI) $97,900

% AMI

Income

2 person

Income

4 person

Studio

Rent/Mo

1 Bedroom

Rent/Mo

2 Bedroom

Rent/Mo

30%

$23,500

$29,350

$513

$550

$661

50%

$39,200

$48,950

$857

$918

$1,102

80%

$62,650

$78,300

$1,371

$1,468

$1,762

Source: http://files.Hawai‘i.gov/dbedt/hhfdc/developers/2013%20Honolulu.pdf

Q: What is the affordable rental housing shortfall?

A:

  • The housing shortfall is projected to be 1,913 units per year for those between 30%-80% AMI.
  • The housing shortfall for those less than 80% of AMI is 13,000 rental units
  • For households between 80-140% of AMI, there is a shortfall of 2,100 units.

Sources:

Q: Why is the affordable housing situation in Hawaii so extreme?

A: Hawai‘i has the ninth highest rate of poverty in the country. Our land costs and construction costs are high and the resulting cost of the housing produced is high to the point of unaffordable. Providing state lands and lowering the cost of funding through the Rental Housing Trust Fund will reduce the cost of the housing produced and lower its ultimate cost to the renters.

Source: Housing Crisis Report, Hawai‘i Appleseed Center Law and Economic Justice

Q: Why focus on affordable rentals?

A: 43% of Hawai‘i residents are renters.

Q: How many renters in Hawaii are cost burdened?

A: 81% of Hawai‘i renters in the 31-50% AMI range are “cost burdened,” per US HUD definition above.

image
Source: National Income Housing Coalition

http://nlihc.org/sites/default/files/2014-SHP-HI.pdf

Q: Why redirect money from the Corporate Income Tax?

A: There is a natural link, as businesses will dramatically benefit from the ability to attract and retain its workforce with an increase in affordable housing. This is not a tax increase, but directing a portion of the corporate income tax receipts to a widely acknowledged priority use. This puts real funding behind the words.

Q: How much money will 25% of the Corporate Income Tax add to the Rental Housing Trust Fund?

A: Based on the Council of Revenues’ projected Corporate Income Tax collections for fiscal year 2012-2020, an estimated $128,636,000. Note: together with the Legislature, the percentage or the number of years committed can increase, for an even greater impact on affordable rentals produced.

Fiscal Year

Projected

2012

$73,027,000 – actual

2013

$100,988,000 – actual

2014

$64,887,000

2015

$69,034,000

2016

$68,498,000

2017

$85,091,000

2018

$89,099,000

2019

$90,091,000

2020

$112,734,000

Total

$514,547,000

@ 25% 2014 to 2020

$128,636,000

Source: http://files.Hawai‘i.gov/tax/useful/cor/2014gf05-29_attach_1.pdf

Q: How many units will $128,636,000 create?

A: An estimated 2,170 additional rental housing units over current projections, based an average over the past five years (since 2010) of $59,000 Rental Housing Trust Fund “funding gap” support/unit

Hawai‘i Rental Housing Trust Fund Actual Utilization

Year

Affordable Units*

RHTF “Gap” Funding

RHTF$/Unit

2014

365

$41,019,103

$112,381.10

2013

1837

$77,534,866

$42,207.33

2012

317

$20,744,095

$65,438.79

2011

368

$33,565,353

$91,210.20

2010

212

$9,762,166

$46,047.95

3,099

$182,625,583

$58,930.49

*Actual awards of Low Income Housing Tax Credits (LIHTC) and RHTF “gap” funding for past 5 years

Q: What could raise or lower the estimate of 2,170 additional units?

A: Using state-owned land and modular building materials could dramatically increase the number of units over the estimated 2,170. An increase or decrease in actual Corporate Income Tax collections could also impact the projection.

Q: How many TOTAL units would be developed before 2020?

A: Over the past five years (since 2010) there have been an average of 620 affordable rental units produced annually. Keeping this average steady, with an additional 2,170 units, there will be a total projection of 6,510 affordable rental units created by 2020.

Q: How do these 6,510 units impact the housing shortage?

A: Of the predicted shortfall of 7,130 affordable rentals shortfall between 30-80% AMI, adding 6,510 decreases the shortfall by 91%

Q: How do you estimate 19,500 additional people will have housing?

A: Based on the Hawai‘i Public Housing Authority 2013 Fiscal Year Report, the average family size is 3.37; we used a conservative number of three people per household.

Source: http://www.hcdch.state.hi.us/reportsstudies/reports/2013_HPHA_Annual_Report.pdf

###

PR: Rentals

SA: Aiona would put millions into rentals fund

HNN: Aiona announces plan to create affordable housing in Hawaii

KITV: Gov. candidate Duke Aiona reveals plans to increase affordable housing


 

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