Bold leadership can increase affordable housing, curb poverty

Hawaii is locked in an economic crisis of immense proportions, yet those in positions of leadership do little. Like crickets in the night we hear them chirping, bemoaning the visual blight of the unwashed, pointing fingers at each other in blame, and occasionally trotting out task forces and studies, and perhaps the occasional pilot project they have commissioned.

Far too many people in our community get up every morning and go to work at a job that pays them substandard wages, with minimal to no benefits. Many work all day, then go on to their night job, but still cannot afford even the basics of a sound roof over their head.

The widespread economic disparity existing now in Hawaii could be greatly diminished if doing so was a priority of Hawaii’s government and business elite. But clearly it is not.

The combination of low wages and high housing costs are crippling burdens carried day after day by working people.

If Hawaii’s elite wanted to alleviate poverty in Hawaii they could do so almost immediately by supporting a $15 minimum wage and undertaking a full-frontal assault on affordable housing.

Raising the minimum wage in Hawaii from the existing $9.25 to at least $15 per hour and indexing that increase to the cost of living would be a major step. Instead of fighting tooth and nail against it, if the business establishment supported a phased-in minimum wage increase, the political support would follow.

Hawaii is an island state. The fear of being forced to compete with lower-wage communities is unfounded, as our economy is primarily visitor industry, construction and military based. Restaurant owners need not worry about customers crossing the border to buy a cheaper hamburger.

While the powers-that-be continue to support the building of luxury condominiums, gentlemen-estate farms and one shopping center development after another, they effectively ignore affordable housing and the plight of regular working men and women.

The majority of land in Hawaii, on every island, is owned by a handful of trusts, corporations and LLCs (limited liability companies). Big business controls the land, often the water, and some would argue the government itself.

State and county government control the land use (zoning), the basic infrastructure, and the regulations. The governor or any mayor could take the lead on this and collaborate with business (or not) and the steps are basic:

The state and county have the power to purchase land via eminent domain if necessary by paying fair market value. Government could purchase land within or adjacent to existing urban areas (consolidating smaller urban low-rise parcels if needed), then increase the density which effectively lowers the “per unit cost” and increases the per unit affordability.

To pay for it, the state could eliminate the tax loophole for real estate investment trusts (REITs) tomorrow and generate $30 million to $50 million per year that could be leveraged and redirected toward affordable housing land purchase or infrastructure construction.

County government could utilize tax incremental funding (TIF), which are bonds borrowed with repayment based on the future property tax revenue that results directly from the development.

Government also has the legal authority to restrict sales and rentals to local residents within a defined set of guidelines, effectively shielding the market from speculation and off-shore investors.

Yes, increasing the minimum wage to at least $15 per hour, combined with an aggressive and bold “Apollo project” approach to our affordable housing crisis, could indeed change the world for the vast majority of Hawaii residents. Let’s do it.

Note: First published on October 19, 2017 in the Honolulu StarAdvertiser “Island Voices” section.

 

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About garyhooser

This blog represents my thoughts as an individual person. I presently serve now as a volunteer President of the Hawaii Alliance for Progressive Action (H.A.P.A.) www.hapahi.org In a past life I was an elected member of the Kauai County Council, a Hawaii State Senator and Majority Leader and the Director of Environmental Quality Control for the State of Hawaii - in an even earlier incarnation I was an entrepreneur and small business owner. Yes, I am one of the luckiest guys on the planet. “Come to the edge.” “We can’t. We’re afraid.” “Come to the edge.” “We can’t. We will fall!” “Come to the edge.” And they came. And he pushed them. And they flew. - Christopher Logue (b.1926)
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13 Responses to Bold leadership can increase affordable housing, curb poverty

  1. Anne says:

    Could you please explain the government’s legal authority to restrict sales and rentals to local residents in light of the Privileges and Immunities Clause and the defined set of regulations that would bar non-residents from owning or renting property?

  2. Kiana Jackson Thorn says:

    I am from Seattle Washington, and when the city raised the minimum rage to 15 dollars it truly opened up new doors. The biggest misconception I think people have about raising the minimum wage is that everything else will become more expensive, which is not possible because consumers will stop paying products, and the extra money goes back into the economy. It has worked in Seattle and I believe it will work in Hawaii.

  3. Karianne says:

    Really good and thoughtful blog post! I do agree that raising the minimum wage will help the poverty situation here in Hawaii. In Norway, our minimum wage is at 15 dollars, (but we tax a lot more), and there are almost no homeless. It is rare if you see one. I do believe that the current US economy favors the rich over the lower income residents, and taxes should be raised with the minimum wage to help the poor. Not saying I am favoring communism, but a little bit of socialism would not hurt the US politics.

  4. skyler stark says:

    I think what resonates most with me is how widespread poverty is in Hawaii, and how no one is truly safe from homelessness. The ordinary family of middle-class workers in Hawaii is often just one monetary emergency away from being homeless. Unless you have multiple above minimum-wage incomes in your family, and therefore have been able to pay off a home, even having to take non-paid maternity leave can leave you in economic shambles. Having an actual livable minimum wage would be completely possible if those at the top would be willing to recognize how fragile living here is economically.

  5. sara says:

    Very interesting proposal on what should be done to curb poverty here in Hawaii. I agree with the point of government giving priority sales and rentals to local residents. The issue going on in Kakaako is a perfect example.

  6. Takuro Yoshida says:

    I am an international student from Japan, but I certainly feel that we need a lot of money just by borrowing a house or buying food in Hawaii. If prices are high, the minimum wage should be high, but I think that it is very difficult to turn the economy with minimum wage, which cannot be said to be as high as 9.5 dollars per hour as a hourly wage. So, I agree to raise the minimum wage and I think that people should spend more money and run the economy well.

  7. Thanks for spelling out what we can and must do about the some of obvious challenges facing Hawaii, Gary. It is too easy to despair at the widespread abandonment of principle and integrity within the GOP establishment in D.C. There is an option. Act local. This commentary points to practical things we can and should do. It is a call to tackle our problems using all the tools and resources of local government. We need more leaders in government willing to speak out, name the challenges we face and address them with the kind of urgency Hooser’s commentary reflects. There is much that we can do if we have the will to do it. That is why the corps of new young leaders coming out of Kuleana Academy should give us hope. That is why millennials becoming more engaged in the political process should give us hope. Yes, we are in crisis and Hooser is one of the few voices raising the alarm and pointing to real solutions that are within reach.

  8. Ferse says:

    This is a very interesting post. I do agree with you that the minimum wage in Hawaii needs to raise. The housing costs are getting higher and if Hawaii’s elite wants to reduce poverty in Hawaii, changing the minimum wage would be a good solution. Im sure that there are other people who will agree with this solution too. Thank you for letting your thoughts out of what needs to be done to make a difference.

  9. jonwoodhouse says:

    Alexander & Baldwin, one of the state’s largest land owners is converting to REIT status. Unlike other businesses operating in Hawaii, REITs are effectively exempt from state income tax. According to Civil Beat, the $720 million earned by REITs in Hawaii in 2014 (that number has increased by 50 percent since then), 99 percent leaves the state tax free, to be taxed elsewhere or nowhere. Time to close the loophole!

  10. Ryan Jake S. Constantino says:

    I strongly agree that today’s $9.25 an hour minimum wage in Hawaii is too low to make a living unless you depend on others’ incomes.The rent here is ridiculous, and it has always been that way since I came to Hawaii in 2010. With the proposal of $15 minimum wage, I believe that it should be enough to lift someone out of poverty if they work full time and full year. Also, by making this possible, the increase of minimum wage makes sure and ensures no one gets left too far behind as economy and wages grew. If things stay what they are now, then life is going to be more unforgiving and more actions will be needed; we have to put caps on rent or build a lot of affordable housing for everyone and enact policies to keep them affordable.

  11. Madison Swartz says:

    After reading this post,I found that many questions were formed. I come from California, so down in the LA area we also deal with a lot of homelessness. Shelters are provided in many different areas but thats about all we do for this issue. I feel that like we should actually look at the problem and do something about it like mentioned in the post. Great points about raising minimum wage are brought up, but will this make other prices go up as well, such as taxes? Also do you feel that with the new luxury condos being built, this will bring in new business for Hawaii?

    • garyhooser says:

      Thank you Madison for the comment and questions. While I don’t have all the answers, I will try to offer some of my additional thoughts. Research shows that the minimum wage might raise some prices but that the over-all benefit in helping to support low-income working people is significant. With more income, yes it is possible that the person might pay more taxes but because these earners are already paying at the bottom level of the tax code, it is unlikely that this will be significant. Also, this can be further adjusted if the bottom levels are still too high. Building more luxury condos will generate construction jobs, but so does building affordable housing. Increasing the luxury “high end” market tends to drive all prices up for homes and real estate which makes it even more difficult for regular people and for those at the low end, to find and purchase homes they can afford. The present system is set up to favor the wealthy luxury builder and buyer, while there is little incentive or support for middle to low income housing.

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