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Council to Consider Overriding Roth Veto on Housing Program Revolving Fund

By Nathan Christophel
July 5, 2022, 4:56 PM HST
* Updated July 5, 5:17 PM
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A measure that made the language in the county’s housing program revolving fund code more specific as to how it can be used was vetoed by Mayor Mitch Roth. The County Council on Wednesday, July 6, will revisit the issue — and could consider overriding Roth’s disapproval.

Mayor Mitch Roth

Roth issued his veto of Bill 152 on June 13.

The legislation repealed existing provisions of the housing revolving fund and established nine specific uses for the fund. The council gave its final approval to the measure during its May 18 meeting with a 7-2 vote.

The measure says the revolving fund shall be used for the following:

  • Planning, design and development of affordable housing units either by the county or by nonprofit housing development partners.
  • Exercising the buyback option running in favor of the county contained in any conveyance document and to pay the costs of maintaining, repairing, renting or reselling units purchased by the county pursuant thereto.
  • Acquisition of vacant land for use as affordable housing that may be developed by the county or with nonprofit partners.
  • Acquisition of existing structures for use as affordable housing.
  • Rehabilitation of existing structures currently in use as affordable housing or acquired by the county to use for affordable housing.
  • Infrastructure to support affordable housing development.
  • Subsidies, grants and loans to support very low income, lower income and moderate income households with upfront costs for rental units or mortgage financing.
  • Subsidies, grants and loans to support very low income, lower income and moderate income households with rental assistance or mortgage payments to prevent houselessness or foreclousre.
  • Purchasing of deed restrictions on private properties limiting resale to qualified buyers at resale values for lower income and moderate income households in perpetuity as established by the Office of Housing and Community Development administrative rules.

The original language included in the revolving fund code was much less specific, saying the fund would be used to pay for items such as the development of housing and exercising the buyback option.

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“Bill 152 simply expands on the uses allowed of the county housing program revolving fund, so we are simply adding seven uses to this fund beyond the original two, which was development of affordable housing and the buyback program,” Councilman Holeka Inaba said during the council’s May 18 meeting.

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Office of Housing and Community Development Administrator Susan Kunz told the council during that meeting that the code’s previous language was very broad and basically said the department could use the funds for housing development. Kunz said the new language does not keep the office from doing any programs planned for the future and outlines what the county has done in the past.

Susan Kunz

“As I look at the bulleted items that are being outlined, it basically describes the work of housing development,” Kunz said. “You know, another way to look at it is if it’s not producing that much of a change, maybe it doesn’t need to be changed at all. It really won’t change the work that we’re doing. Not that I can tell.”

Councilman Tim Richards asked Kunz if the new language would limit the housing office. His concern was that the measure could tie the department’s hands in certain circumstances. Other council members and Kunz shared that concern.

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“This is where the unintended consequences could happen,” Kunz replied.

She said that while the housing office hasn’t had a situation in which it had the ability to help support housing production or development but couldn’t because her hands were tied by language like that, it doesn’t mean it can’t happen. Kunz said the broadness of the fund’s original language has allowed her agency to do a lot of work and the broadest language might give her more latitude when it comes to the office’s work.

“Maybe, why are we going to change the language?” she asked. “Even if I’m saying right now it looks pretty innocent — it is pretty much outlining what I’ve done — but the unintended consequence of something happening because we’re saying you can only use it for these things could happen; and then I’ll be tied. So I think that is definitely something that should be considered.”

Councilwoman Heather Kimball told the council during the May 18 meeting that the intent of the bill was in no means meant to restrict the activities of Kunz’s department and in many ways was intended to be a signal as to what the county’s housing priorities are and keep ideas for additional opportunities flowing.

“Keeping people in housing is an example, or helping them get their down payments, really looking at income levels, making sure we were addressing true affordability with respect to the middle class, so forth and so on,” Kimball said.

Roth said in a letter to the council informing members about his veto of Bill 152 that he does not agree with the changes made to the revolving fund code and agrees with what Kunz said during the May 18 meeting. He recommends no changes to the revolving fund code at all.

“The amendment provides language changes that delineates specific activities and uses of the revolving fund which may limit the Office of Housing and Community Development’s ability to provide much needed affordable housing,” Roth said in his letter to the council informing members about his veto.

Roth said in the letter that the county needs to broaden its ability to partner and consider all options for housing development.

“We all agree that the housing need is great,” he said in the letter. “So much so that it requires an approach that incorporates all involved.”

The mayor said the original language of the revolving fund code provides the broadest language to carry out his priorities to meet the county’s affordable housing needs.

“This broad language also minimizes the unintended consequences or not having considered all possible opportunities and tying our hands unnecessarily,” Roth said in the letter.

Inaba and Kimball originally introduced Bill 152 and are asking the council to reconsider the measure and potentially override Roth’s veto. A veto override would require two-thirds of council members to vote in favor.

Roth told Big Island Now on Tuesday, July 5, that Bill 152 creates restrictive rules of engagement, is counterintuitive and is stifling to the county’s housing efforts. He said by considering an override of his veto, the council would be choosing to undermine the judgement and opinion of the county housing office.

“Instead of listening to those who understand how the implementation of this rule change would work, they’re choosing to rely on their lay understanding of housing and development,” the mayor said via email. “It’s unbecoming of our elected officials and not in the best interest of our community. It would behoove the council to remember that every law or rule they make regarding our departments can hinder that department’s ability to carry out their mission to the best of their ability — ultimately harming our residents in the process.”

Roth asks that the council reconsider revisiting Bill 152 until an all-encompassing report on Chapter 11 of the county’s code, which deals with housing, is completed by a consultant, saying the report “might have a more consequential and significant impact.”

“It can also provide the appropriate time to fully consider whether the revolving fund is the appropriate vehicle to house and administer future housing production/development-related activities,” the mayor said in the email.

Inaba said Tuesday afternoon in an email to Big Island Now that Bill 152 expands use of the housing revolving fund by clarifying it can be used to allow vacant land purchases, existing structure rehabilitation, subsidies, grants and loans. It also adds restrictions in perpetuity for resale to lower and moderate income households.

“The council should follow through with its original decision to pass Bill 152 to allow for the highest and best use of any monies within the revolving fund,” Inaba said in his email.

The council meets at 9 a.m. Wednesday at the county building on Aupuni Street in Hilo. The meeting also can be viewed online.

Nathan Christophel
Nathan Christophel has more than 20 years of experience in journalism, starting out as a reporter and working his way up to become a copy editor and page designer, most recently at the Hawaii Tribune-Herald in Hilo.
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