HomeMy WebLinkAboutCOM 0067.037 2024-2026al
From: GREGORY KIRK
Sent: Saturday, January 25, 2025 4:20 PM
To: Council Testimony
Subject: Resolution 46-25
I am writing in response to Resolution 46-25 Authorizing the Office of Housing and Community Development (OHCD) to provide funds to
various nonprofit organizations addressing homelessness. As far as the resolution is concerned, I support it. However, it strikes me"as still
inadequate to address the scope of the crisis on the Big Island. Please think bigger.
The purpose of this letter is to encourage the council to (1) authorize the OHCD to disburse funds to nonprofits addressing homelessness; (2)
increase the budget appropriation for homelessness (Budget Category ID: 5465.01) from $12,150,000 in FY 2024/25 to $12,650,000 in
FY2025/26; and (3) approve a resolution authorizing the issuance of a general obligation bond in the amount of $350,000,000 for the exclusive
purpose of constructing housing for Hawaii County's lowest -income residents with a priority for those presently unhoused.
To start, I commend Council Member Kagiwada for recently proposing a resolution to facilitate the construction of an expansion of the Lanakila
affordable housing development. Knowing that County Housing Administrator Susan Kunz fully endorses this project is encouraging. But along
with political and professional backing, efforts to reduce homelessness require money.
To the council's credit, appropriations for homelessness have roughly tripled over the past two years. It is now one of the largest line item
expenditures in the budget. Credit also goes to our community partners such as the Salvation Army and Hope Services Hawaii in Hilo.
Nevertheless, it remains plainly obvious to most that $12 million from the county and compassionate outreach from the community isn't moving
the needle.
When attempting to address so-called "wicked" problems of public policy such as homelessness, money is always the overriding concern. So
how much more money could Hawaii County spend on this problem? According to the 2024-2025 budget, appropriations total $692 million. Of
that amount, $415 million must be considered untouchable. In particular, retiree pension and health benefits ($150 million) and debt service
payments ($62 million) take priority. Next, $203 million in current employee salary and wages are, politically speaking, sacrosanct. That leaves
$277 million available for discretionary spending, including spending on homelessness. Anyone who has scoured the FY 2024/25 budget as
closely as I have would reach the same conclusion: there isn't much (if any) fat to trim.
As you know, government has other ways to raise money, by raising taxes or issuing bonds. For the record, 1 am in favor of both, but recognize
tax increases are politically unpalatable. Which brings me to a general obligation bond.
The multiple unknown variables with respect to how many unhoused residents are single, and the number of adults and dependent children in
one unhoused family, complicate any effort to calculate how much it would cost to house them. For example, there were 835 individuals
unhoused as of December 31, 2024. Amongst those, 145 were children under age 18. For these purposes, it would be helpful to know how
many of those children are siblings, some of whom presumably would be residing together with a parent or guardian in a bigger apartment if
possible. These details are factors in determining both the number of units needed and the required square footage for larger families.
Within these limitations, I have attempted to calculate the resources needed to fund the construction of needed housing on the Big Island. I
have relied on published reports and articles concerning the construction of Hale Na Koa 'O Hanakahi and Waikoloa Family Affordable on this
island, and the Kokua Senior Apartment in Honolulu, to justify a $350 million bond.
To start, the 92 units at Hale Na Koa 'O Hanakahi cost a total of $58 million, or $630,000 per unit. It was reported that construction costs were
as high as $1,000 per square foot. The 110 units at Waikoloa Family Affordable cost $46 million, or $418,000 per unit. The 222 studio
apartments at Kokua, averaging 300 square feet per unit, cost a total of $88 million. At Kokua, the apartments averaged $396,000 per unit.
Relying on the reported expenditures for these three projects, 1 estimate that the future construction cost of a single unit on the Big Island would
be $481,000. The simplest calculation is to multiply the 835 unhoused residents of Hawaii County by $418,000, to reach a total of $349 million.
I acknowledge that this number is very rough and perhaps far off the mark, but I offer it up to start the discussion.
According to publicly available information from Fitch Ratings, Hawaii County has earned the highest credit rating which bodes well for a future
bond issue and long-term interest payments. Without a crystal ball, it is impossible to know which way rates will move in years to come. Having
said that, many experts are predicting that interest rates will rise in the near term. When interest rates rise, government debt becomes more
expensive to service.
I would like to address the concern that on a per capita basis, Hawaii County is presently spending $14,550 annually on each of the 835
unhoused residents. That sounds like a lot until one considers the median rent in Hilo is more than $20,000 a year. And according to Bridging
The Gap: 2024 Hawaii County Point In Time Topline Report
(https://www.btghawaii,org/media/uploads/2024 hawaii county pit topline report v2.pdf), rent is not the number one reason people are
homeless (family/relationship problems is first).
As is true in most cities and countries across the country, Hawaii County public safety (Budget Dept 201: Police) has the largest estimated
expenditures at $90 million. Relying on the most recent data, the Hawaii Police Department (HPD) made 8,139 arrests in 2020. The Fiscal Year
2020 budget was $72 million for the police, making each arrest a pro -rated expenditure of $8,846. Thanks to Bridging The Gap, we have a
sense of the burden the homeless population places on HPD. Of the 481 households who responded to Bridging The Gap's survey, 119
respondents reported being arrested within the past year (24.7 percent), far exceeding the arrest rate of the larger population. The money spent
on the back -end arresting, booking, and detaining Hawaii County's homeless would be better spent on the front-end providing them with the
shelter and services they need to keep them out of trouble with the law.
To that end, I recommend the council increase the funding for homelessness in the 2025/26 budget by an additional $500,000, principally to
account for inflation.
Mahalo for your work on behalf of Hawaii County.
Gregory Kirk