Former Lt. Gov. James “Duke” Aiona would divert 25 percent of the money collected by the state’s corporate income tax to the rental housing trust fund, hoping to create a financing pool to build more affordable rentals.
A lack of affordable rentals has been identified, along with the state’s high cost of living, as one of the factors behind growing homelessness.
Aiona, a Republican candidate for governor, estimates the idea would generate about $128 million by 2020, enough for about 2,170 new affordable rental units over existing projections.
“We have a lot of working families who are at risk of basically sleeping in their cars, sleeping in the parks, or sleeping on the streets, whether it be because they missed a paycheck, they got ill for a while, or whatever it may be,” he said at a news conference Tuesday at his campaign headquarters off Nimitz Highway.
The announcement is the second plank in Aiona’s plan to combat homelessness. In June, the former judge called for the establishment of a homeless court that would offer the homeless treatment and other social services as alternatives to jail.
He also proposed that the Hawaii National Guard reach out to homeless veterans.
Public opinion polls have shown that Aiona might be competitive against Gov. Neil Abercrombie or state Sen. David Ige, the Democratic contenders, and former Honolulu Mayor Mufi Hannemann, who is running as a member of the Hawaii Independent Party.
While the focus is on the Democrats before the August primary, Aiona, who lost to Abercrombie by double digits in 2010, is slowly rolling out some of his policy themes.
The corporate income tax is a relatively small slice of state tax collections compared with the general excise tax, the individual income tax, and the hotel room tax. Aiona had once called for a reduction of the corporate income tax to help promote business growth.
Aiona said there is a link between the corporate income tax and affordable rentals, because businesses benefit from a stable workforce that has access to affordable housing. He would also streamline the permitting process to make it easier for private developers to complete rental projects.
Government incentives are necessary, he said, because private developers are otherwise concentrating on market-rate projects.
State Sen. Suzanne Chun Oakland (D, Downtown-Nuuanu-Liliha), chairwoman of the Senate Human Services Committee, who has been an advocate for affordable housing and for boosting the rental housing trust fund, said she would like to hear more about the nexus between the corporate income tax and affordable rentals.
This year, the Legislature and the governor restored the share of the conveyance tax into the rental housing trust fund back to 50 percent. The share had been reduced to 30 percent during the recession.
Chun Oakland is looking at other potential sources of revenue for affordable housing, including investors who have vacation properties or who flip units to make a profit, practices that can drive up real estate prices.
“I don’t know if that’s the most appropriate source,” she said of the corporate income tax.
