Homelessness Bill Would Allocate Money Raised From Luxury Homes to Combat Plight

The Hawai’i County Council is looking to earmark money raised from property taxes on high-end homes to combat homelessness on the Big Island.

Bill 111, introduced by Councilman Aaron Chung, would amend county code to allocate 75% of real property tax revenue collected each year from Tier 2 residential properties, or second luxury homes valued at more than $2 million, for county-sponsored programs for housing and homelessness through June 30, 2027.

If adopted, the new ordinance would take effect July 1. County Finance Director Deanna Sako estimated, based on the current fiscal year budget, that the measure would generate roughly $7 million to $7.5 million.

The council unanimously approved the first reading of the bill, already in its second draft and with an amendment, during its regular meeting Wednesday, Feb. 23.

“I don’t know how this thing is gonna turn out in its final form and however it turns out, as long as it’s the will of the council, I’m A-OK,” Chung said. “This was really intended to just kick-start a discussion and then, hopefully, everyone can put their thoughts into this, this idea, and then come out with a really good plan.”

He said the fact of the matter is that homelessness is a problem on the Big Island.

Council members agreed, but they had several questions, including what county-sponsored programs could be covered by the new funds, who would be accountable for the funds and programs and whether housing would be a focus. Some department chiefs also wanted to clarify the language of the bill to clear up any confusion about what funds would be collected for programs.

The county levies a $13.60 tax per $1,000 on Tier 2 homes or portions of those properties valued at more than $2 million.

County Real Property Tax Division Administrator Lisa Miura said the bill as currently written is not clear about how much money will be allocated. She said the way it’s written makes it sound like 75% of the entire $13.60 per $1,000 collected annually on Tier 2 properties would be taken, which she doesn’t think was Chung’s intent.

Chung said he would be open to suggestions from council members or others in the administration of how to clear up any confusion.

“I’m all ears. You guys know what we’re trying to accomplish, right?” Chung said. “If there’s a way of tweaking the language that makes it very clear then, please, let us know. We still have one more reading.”

The bill prompted a lot of discussion on how it will work.

Councilwoman Sue Lee Loy asked more about the specific intent of the measure.

“Just thinking through, if it’s to address homelessness and it leads to the development of housing, is that the intent for the money or is it just to address the homeless population?” she asked.

“My feeling is anything that has a nexus to addressing the homelessness issue can be used,” Chung answered.

Lee Loy also asked if there is a major outcome the measure hopes to achieve.

“Our ultimate goal is to end homelessness within five years, right?” Chung said. “That’s implicit in this. Whether that can be accomplished begs the question. It might be overly optimistic, but we gotta put people’s feet to the fire.”

He said if at the end of the five years outlined in the bill the county seems to be making progress but needs more time, then the funding could be extended. However, if there’s no progress being made, “then we know this experiment was a bad experiment.”

Councilwoman Ashley Kierkiewicz asked to amend the bill to read “county-sponsored programs designed to address housing and homelessness,” not just homelessness.

“I really wanted to be explicit and include the word ‘housing.’ I mean, it’s a no-brainer,” said Kierkiewicz. “Folks that are homeless or experiencing homelessness or on the verge of doing so, they need housing, and we’re at a crisis that won’t solve itself. So this is a way in which we are able to essentially create our own destiny, and solve for it with a local funding solution.”

Susan Kunz, the county’s housing administrator for the Office of Housing and Community Development, said that a housing component is really critical to the programs that would be created using the funds generated by Bill 111.

“We have some ideas about what kind of programs we should be running and what kind of services are needed, and we know that affordable housing is a critical piece right now,” Kunz said.

Kierkiewicz said the housing crisis wasn’t going to solve itself.

“We all know that housing is a key determinant in positive social outcomes, and it really underlies socioeconomic fabric and personal well-being,” she said. “So if we have people in stable housing, we just know that they are gonna be thriving and so will our economy.”

Most of the Council was amenable to Kierkiewicz’s amendment, but while he appreciated why the addition was proposed, Councilman Matt Kaneali’i-Kleinfelder said he liked the bill as is and didn’t want to restrict it too much. He also said there are a plethora of funding sources for housing already available.

The amendment passed 8-1, with Councilman Matt Kaneali’i-Kleinfelder voting no.

The full bill still has to pass second and final readings.

Chung is open to any suggestions as for what programs will be created and how the fund will be used, but he wants to give the administration some flexibility.

“If we go in with an inflexible type of program, it might hamper our ability to move quickly on other fronts,” he said.

“This is really intended to be something that fosters collaboration,” he added. “Whatever the Council comes up with, I’m fine, as long as it does not stray too far from what we are trying to accomplish.”