Affordable housing challenges: Subsidized housing applications pile up, county closes wait-lists

  • Mohouli Senior Residences. (HOLLYN JOHNSON/Tribune-Herald)

  • Ulu Wini Housing is one of West Hawaii’s few low-income housing complexes. (Laura Ruminski/West Hawaii Today)

HILO — Despite a waiting list of more than 2,000 applications — some going back nine years — Hawaii County hasn’t built any new affordable housing units since 2017.

But the county is taking action, officials say, not only to build more public housing units, but to open up more Housing Choice Section 8 vouchers by creating better incentives for apartment and house owners, especially in West Hawaii.

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Section 8 vouchers are available to those families designated low-income by federal Housing and Urban Development standards. Renters typically pay 30% of the monthly rent, with the government picking up the balance.

The 2,640 applications for 2,383 housing opportunities as of March 29 is somewhat misleading because one person can be on several waiting lists, Housing Administrator Neil Gyotoku said Tuesday. Each of the county’s 11 programs, which range from vouchers to senior housing, has its own application list.

There are 385 families on the wait list for Housing Choice vouchers. To some extent, the county is a victim of its own success, having tapped out of almost all the federal funds available for the program.

Project-specific programs are more of a challenge because of the high cost of housing, especially in West Hawaii.

Only two of the project lists are open for applications right now: Lei Kupuna low-income senior units and Lei Ohana multi-family low income housing units in Kailua-Kona.

Phase 3 of the Mohouli Senior Residences project in Hilo has begun, said Gyotoku, marking the end of the recent construction pause. That will add 92 units, he said.

“It’s already under construction and expected to be completed next year,” Gyotoku said.

Three South Kohala projects are also heading for construction soon, now that the U.S. Army and state Department of Health have cleared them for unexploded ordnance. Those include Kamakoa Nui, with 40 multifamily rentals for families earning 60% to 100% of median income, Kaiaulu o Waikoloa, with 61 units for families earning 60% of the median income and Waikoloa Family Village, with 30 units.

For Hawaii County in 2019, the median family income is $70,100, according to HUD reports.

To be considered low-income, a family of one would make $44,000 or less annually. A family of two, $50,250; a family of four, $62,880; with income levels progressing to a family of eight making $82,900 or less.

To be considered very low-income, a family of one would make $27,500 or less annually. A family of two, $31,400; a family of four, $39,250; with income levels progressing to a family of eight making $51,850.

As for more new affordable housing:

“There’s a lot of them right now in the dream stages and not ready to go in the next year or two,” Gyotoku said.

One of the highest hurdles in building new projects, even with developers ready to take them on, is the lack of infrastructure such as roads and water, he said. Developers of more pricey homes and condos are required to contribute a certain amount of affordable housing as a condition of development.

“The biggest drawback of building affordable housing is infrastructure,” Gyotoku said. “Those are the conditions we talk about every day when we talk to developers.”

One goal is to maximize the use of existing housing stock rather than build new projects, but that’s especially difficult in West Hawaii, where owners can rent their units privately for much more than they’d get in subsidized programs.

In fact, of the 2,161 Housing Choice vouchers being used, only 15.5% are in the three West Hawaii council districts, with another 5.4% in the Volcano-to-Kealakehe Council District 6.

North Kona Councilwoman Karen Eoff, who is chairwoman of the county Housing Agency, is working on a solution to the West Hawaii rental shortage.

“I would say there’s an affordable housing crisis throughout the entire island, but there’s a critical shortage in West Hawaii,” Eoff said.

Eoff said she’s working with the administration on ways to create incentives for West Hawaii property owners to allow Section 8 rentals on their properties. The county already gives an affordable rental tax break of $6.25 in tax for every $1,000 of property value, compared to $11.10 for non-homeowner residential and $11.70 for apartments. The Section 8 apartments must be offered below market rates.

“To make it more attractive for people in West Hawaii to take part in our programs for offering their homes for affordable rentals, we will also need to raise the ceiling amount to qualify for the affordable tax class,” Eoff said. “Raising qualifying rental amounts in West Hawaii would provide an incentive to participate in the Section 8 voucher program and the affordable tax class.”

The owner’s affordable housing monthly rental rates under the county program for the tax year that ended June 30 ranged from $638 for a studio, $975 for a two-bedroom, to $1,613 for a five-bedroom unit in East Hawaii and $708 for a studio, $1,049 for a two-bedroom, to $1,940 for a five-bedroom unit in West Hawaii, according to Finance Department documents.

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“We’ve tried to increase the fair market rent for Kona, the westside, so it has a higher fair market rent then Hilo, but its just that there’s not much affordable housing. Maybe if you give up your vacation rentals we might be able to get more, but inventory has been a problem, no question about it,” Gyotoku told the Housing Agency at its April 9 meeting. “I think to try entice the project developer, the private developers, if you can have things like an expedited permit review process, that might help.”

The county Office of Housing and Community Development took in about $26.6 million in federal funds this year and received about $2.1 million from the county’s general fund.

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