Kudos to the Governor and Lawmakers for Prioritizing Affordable Housing and Rentals, Now It’s Time To Act

It was encouraging to hear Gov. Josh Green place a high priority in dealing with Hawaii’s housing shortage (affordable housing and rentals) during his State of the State address to a joint session of the Hawaii State Legislature. Many voters in the last election cycle, including many in our Filipino community, have mentioned the affordable housing shortage as a top issue they wanted government to work on.

The Governor’s words were bold and that of a reformer. “Today we need new ideas, new solutions and bold action rooted in our shared values once again. Business as usual won’t work anymore. There is simply too much on the line to accept the status quo,” he said.

And some of the initiatives Green outlined that he wants State lawmakers to take on this legislative session match the bold and innovative tenor of that address.

Green reiterated in his address what he mentioned upon his election on election night in 2022. He said, “Housing remains the administration’s top priority,” referring to the supplemental budget for fiscal year 2025 that includes $373 million for infrastructure and housing projects.

Clearly, as the legislative session rolls out lawmakers will review the details and challenge and possibly shut down some of the Governor’s legislative package, but his vision of tackling our housing shortage head on – which is a crisis in the eyes of many – seem to be supported overwhelmingly in this initial stage.

In a Forbes article this month, experts estimate a house priced at $850,000 at today’s interest rate would translate to an average monthly mortgage payment of $5,004. The same article lists Hawaii at number one in the nation for home prices.

The Honolulu Board of Realtors in its December 2023 statistics has median sales price for a single-family home at $996,500 and for a condo-townhouse at $510,000.  Unless Hawaii residents have a massive downpayment, many realistically are not in the market to buy any time soon, which is why pressure is mounting on local government to act on curbing rental prices.

The Governor’s House Hawaii’s Ohana Plan is a short-term plan that could have immediate impact to bring in more rental inventory into the overall rental market, and thus, potentially affect rental prices.

The House Hawaii’s Ohana plan will provide tax amnesty to any owner of a short-term rental (STR) who chooses to sell their property to an owner-occupier family or to someone who turns the home into a long-term rental for a local family.

Under the plan, the seller will be exempted from capital gains taxes, conveyance taxes, and general excise taxes. The plan begins this fall and lasts for two years.

With interest rates hovering around 7-8%, acting to stabilize rental pricing is a smart plan in the immediate future. The Governor and Hawaii’s Democratic majority have multiple other measures to address housing affordability.

Hawaii’s Republican leadership also revealed their housing bills that on surface appears far bolder and aggressive, including a proposal that would ban individuals and businesses from buying residential real estate in Hawaii.

Sen. Brenton Awa’s bill that bans certain foreign entities from purchasing or acquiring an interest in Hawaii agricultural lands is sound and fair, as well as beneficial to the islands in the long-term. Kudos to him, and hopefully, this legislation gets bipartisan milage this session.

What was also encouraging in Green’s address is the State’s efforts working in coordination with the Federal government to offer recovery relief to Maui residents. To our fellow Hawaii residents on Maui, many of whom are our fellow Filipinos, you are not forgotten. Clearly, your housing shortage situation is far more urgent and dire. A few updates on Maui’s recovery efforts:  

1) The Governor has set aside up to $600 million in the budget for recovery costs that will continue into 2027.  

2) There is a Maui Interim Housing Plan — a $500 million initiative to create a pool of more than 3,000 housing units for at least 18 months to house those displaced by the fires.

3) There are 27,000 short-term rental units on Maui alone. The Governor said, “if we can dedicate just 10% of these homes to displaced Lahaina families — we can house them all. We will cover the fair market value of each rental for two years, and provide a property tax exemption for 18 months to those who participate. If not enough partners step forward to join us as we approach March 1st, I will be forced to declare a moratorium on all short-term rentals in West Maui, until we find enough housing for the displaced families.”

4) In addition to $250 million for hotels and rental assistance to individuals, FEMA is currently in the process of leasing 1,500 units to house survivors, and is planning and designing, two housing sites on Maui to house up to 500 additional families — totaling an additional $450 million.

Emphasizing the urgency of acting on our housing crisis
It’s worth sending a message and reminder here to elected officials that a majority of the people in our state want action on the shortage of affordable housing (including rentals).

As the Governor mentioned, it’s a crisis that not only affects low-income families but middle-class residents who earn too much to qualify for subsidized public housing but earn too little to afford to buy or rent in the current housing market.We look forward to lawmakers passing the multiple bills to address our state’s affordable housing crisis.