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HomeMy WebLinkAboutCOM 0072.020 2004-2006 HAWAII ISLAND BOARD OF REALTORS°, INC. REALTOR® January 20, 2005 26 Waianuenue Avenue Council Chairman Gary Safarik & Members of Hawaii County Council Hilo, Hawaii ss72o-2aao 50 Wailuku Dr. Phone: (608) 935-0627 Hilo HI 96720-2484 Fax: (808)935-4924 E-mail: hibr~hibr.com Dear Councilpersons, I am Mary Begier, Chair of the Government Affairs Committee for the Hawaii Island Board of President Adele Eggel, R,CRS,GRI Realtors. We represent 1300+ licensed real estate agents across the Big Island. We are all members of the 8,000+ Hawaii Assoc. of Realtors and the over one million members of president-Elect the National Assoc. of Realtors. Georgia "Gae" Callaway, R,GRI Today we come before you to provide you the insight that we as professional housing Vice President providers can offer to this dilemma. Mary Begier, R,CRS We are the ones that have to tell the young people, the disabled, the middle income Secretary families, sorry, you don't qualify, or sorry the rent is going up, so we know the heartbreak Edith Crabb, R,CRS,GRI that is out there personally. Treasurer Sharon Moffat, R,ABR,CRS,GRI However, we fail to see how driving up the cost of building a house is going to make homes more affordable. This bill assumes there is tremendous profit in the development of real Immediate Past President estate. There is money to be made, that is the American way but it's done with hard work, Ken Kjer, R smart planning and being in the right place at the right time. Many of the developers of today's products have been waiting and watching for the right time to do a development because the costs are so high. Directors: Linda Caleo. R,CRS,GRI On average it takes 7-9 years to go through the local (neighborhood boards on Oahu), Derek Debina, R county and then state zoning processes. Think about your own businesses. Let's say you Sandra Hegedeldt, R are baker. If you purchased flour today to bake bread with but had to keep it fresh, bug free Kelly Moran, R,GRI and usable for 7-9 years you would certainly have to charge more for the loaf of bread that Alexander Smith, R,GRI was finally baked, would you not. Brian Thomas, R,CPM,GRI Bud Weiss, R Along with the waiting and planning goes taking the risks, many lose a lot of money and a few go bankrupt. The cost of in lieu fees or development extractions are not absorbed by developers, they just add to the market cost of the middle income housing. Executive Officer Adrienne M. Notley,ePro We have an opportunity to learn from mistakes made by the C&C of Honolulu and the state of Hawaii in their affordable housing programs. Look at the Ewa Villages and the various Executive Assistant communities of Kapolei. To this day two of the villages are facing financial problems Diane Weigand because the county has not accepted the dedication of the sidewalks, streets and gutters Darcy Kela because of a technicality in the building code that was overlooked when a development took longer to sell out than anticipated. The villages that mixed market priced housing with affordable housing faced multiple cases of strife amongst neighbors because of the built-in inequity. Go back further and look at Puu Haleakala in Nanakuli and others on the leeward coast. REALTOR® is a registered collective membership mark which may be used only by CO1Ntt4 IVO. 72• 0 real estate professionals who are members of the Ref. To: Prasteafrl NATIONAL ASSOCIATION Ref ()ete 1.~~. OF REALTORS® and subscribe to its strict Code of Ethics. The government has frequently missed the market when deciding when to develop or build housing. They place buy back restrictions on the property and then because the market place value declined the person asks for forgiveness to sell the unit before the mandatory hold period is up. This home then becomes a market home and grows with the economy yielding someone an excellent profit but nothing comes back to the state or county housing fund. A simple deed restriction or lien would have sufficed but no one thought of it. We testified before both of these bodies suggesting it but no action of that nature was taken. Government is very good at doing some things but housing development is not one of those talents. Let's talk about affordable rentals that can lead to affordable housing. All the counties receive tax dollars (our tax dollars) from the federal government to subsidize rental housing, commonly referred to as section 8. The beauracracy to qualify a property for use in this program prevents many property owners from participating in the first place. Not because these are defective properties. Its just a time consuming process. It can take up to 6 weeks to get a property approved, tenant moves in and then it takes another 6 weeks to be paid the first months rent by the government dept. Market rental requires no ones approval and the tenant gives you the money immediately. It's not about people being opposed to section 8 it's about people making business decisions. Skilled property managers from our association with constructive suggestions were invited to serve on a task force trying to improve this process but after donated hours of their time find it has not accomplished anything because the beauracracy is too well established. I'm afraid to ask exactly how many dollars that this county is entitled to that is returned back to the federal government to be used by another state every month because we have decided to only allocate our section 8 money to rentals and not allow any to help someone get off of welfare and into home ownership. How does that happen you ask? I know a woman who was renting at Kuhio Park Terrace. She signed up through the Hawaii Home Ownership Center to participate in this program. While she was getting job training to get a better job to get off welfare she attended classes on how to fix ones credit, how to save, how to select a real estate agent, how to qualify for a loan and most importantly how to pay for and use that home as her families residence. There is an established formula for this program for the amount of contribution that goes to a savings account for the family to use as a down payment when they finish the classes. Long story short, she purchased a 3 bedroom townhouse 3 years ago. They are now in the process of looking fora 2n° home and they will rent that 3 bedroom townhouse out, thus becoming part of the landed in Hawaii. The greatest part of this story is that her children who were previously being raised in a welfare environment learned that their sacrifice of giving up McDonalds and other treats lead to the ability to own their own home and now a larger, more improved home. The young son loves to pass by McDonalds and not stop because every time they do he is one step closer to having his own bedroom. Tell me is that not the way to encourage a diverse socio- economic housing mix? Having said all that though, Hawaii county and Kauai county do not participate in this program. So there is no chance for any of the children of our welfare system to have this life altering experience. In November 2002, the National Assoc. of Realtors (NAR) created the Housing Opportunity Program to address the nation's housing opportunity crisis. According to the NAR, the lack of available and affordable housing is reflected in several ways, including access to employment, education, a good environment and safe neighborhoods. This problem impacts all segments of the real estate market, including first-time purchasers, low-income purchasers, seniors, the disabled, singe family buyers and renters as well as rental property owners and developers. To promote housing opportunities at the state and local levels there is need for greater legislative emphasis to: 1. Preserve the existing housing stock through grants, loans and financial incentives. 2. Streamline the zoning and planning approval process. 3. Utilize density bonus features that encourage the development of unit's price to sell and rent at the lower end of the market. 4. Establish housing trust funds in order to build affordable housing. 5. Better coordinate services and eliminate duplication. 6. Make better use of low-interest loans, block grants, low-income housing tax credit programs and deferred loan programs to provide both homeownership and rental housing opportunities. Hawaii Island Board of Realtors joins the other million members of the National Assoc. of Realtors in supporting this philosophy. In closing we ask you to hold this bill as an incomplete attempt to address a very complex situation. No one bill or even package of bills at the county level is going to have the impact you are striving for. Instead it will drive away developers and drive up the cost of housing. This measure lacks innovation and relies on incorrect assumptions. The wealthy will always have money and they will always purchase what the want. It's the non wealthy, the very constituents that you are striving to assist that this bill is going to hurt. Thank you for this opportunity. We look forward to continuing to be a part of the solution. Sincerely, Mary Begier, Realtor® Government Affairs Committee, Chairperson Mahalo to the following sponsors for supporting HIBR's programs in 2004. Diamond: BANK OF HAWAII Platinum: 'American Savings `First American Title 'First Hawaii Title `North American Mortgage'Wells Fargo Gold: Countrywide Home Loans 'Homes and Land of the Big Island `Title Guaranty Silver: 'AMERA MoAgage `Clark Realty Corp'Fidelity National Title Insurance Company `Housemaster `Island Title Maryl Realty `Security Title Bronze: 'Ala Kai Realty 'Big Island Inspection "Edith Crabb Realty `Family Mortgage `Finance Factors `First Hawaiian Bank `Hawaii Tribune Herald'Hilo Termite 8 Pesl Control `Home Mortgage Professionals `Homestreet Bank `Horizon Pest Management `Lawrence Appraisal Group `Old Republic Title 'Peter Kubota `Robert Bloom Apparisals, Inc. `Royal State Group *Territorial Savings `Wes Thomas & Associates