The Honolulu City Council is committing $32 million in bond money to house the homeless — on top of the nearly $24 million that Mayor Kirk Caldwell had earlier proposed for his Housing First initiative.
Caldwell reacted to the Council’s vote on the matter last week like a kid who’d asked for goldfish and instead got a brand-new puppy: grateful for the present but a bit apprehensive about the impending obligations.
Because the $32 million infusion will come from general obligation bonds, Caldwell told reporters at a news conference Wednesday, the city will be borrowing money for projects it must purchase in whole or develop itself.
"CIP (capital improvement project) money can only be used for rehabbing of existing units, purchasing of buildings or units, or building units," the mayor said. "While we appreciate the money, it’s going to take a little bit longer to do."
What’s more, Caldwell said, "Twenty years ago the City and County of Honolulu was in the housing business — remember Ewa Villages and those kinds of programs? And we got out of the business. We have now been put smack-dab into the business with this $32 million."
The mayor was referring to the Ewa Villages scandal, in which a former city housing official was imprisoned after being found guilty of stealing $5.8 million from a relocation fund to help displaced residents of the subdivision. Oahu voters eliminated the city housing agency in 1998, but in 2010 approved a charter amendment that created a new, smaller Office of Housing.
Now, Caldwell said, the city will need to find the money to administer such a program again.
Some Council members were irked by Caldwell’s response.
"If I was the mayor, sitting in his chair, I would be walking downstairs to shake the hand of every Council member and thanking them for giving him more than he had asked for," Council Chairman Ernie Martin said Tuesday.
Martin said the city should talk to the state about the possibility of using underutilized properties it has — including schools that may be on the verge of closing — for housing projects.
"The state has a far greater inventory of properties that can be utilized," Martin said.
Council Vice Chairman Ikaika Anderson said that after helping secure money for homeless programs without trimming from the road resurfacing and repaving fund, another cornerstone of the Caldwell administration, the mayor’s comments were like "a public kick to the crotch."
Caldwell, in an interview Tuesday, said his administration is now looking at how best to use the additional funds but declined to give specifics.
In the budget he submitted in March, Caldwell proposed roughly $4 million in operating funds and $18.9 million from a cash Affordable Housing Fund in the capital improvement projects budget for a Housing First initiative.
Council members then began tinkering with the $18.9 million Housing First budget by diverting large chunks into their own initiatives. Among those other programs are $4 million to partner with an affordable-housing provider in a Waikiki project, $1 million for a homeless project near the Iwilei transit station possibly in partnership with the state, and $6.2 million for a domestic-violence shelter in Makiki. Council members also whacked about $1 million from the $4 million in Housing First operating funds — money that was to go to administering the housing programs.
Late last month, Martin announced a plan to divert $32 million from the $132 million pot Caldwell had set aside for road repaving and pothole repairs. Caldwell balked. That led to a compromise proposed by Anderson on June 4.
Councilman Stanley Chang said the more than $50 million the city set aside for the homeless is larger than any appropriation made by either the state or any of the counties to combat homelessness.
Anderson called the state Legislature’s $1.5 million to homeless initiatives this past session contribution "measly" compared with the city’s earmark. "A $1.5 million commitment to this initiative is truly an insult," he said.
Caldwell, at a news conference after the Council votes, said the $32 million infusion is "good news" and will allow his administration to continue its policy of "compassionate disruption" toward the homeless — removing them from city sidewalks by enforcing the controversial Stored Property and Sidewalk Nuisance ordinances while finding shelter opportunities for them.
"We’re going to spend what we can use effectively," he said, adding that the city will have three years to encumber the money.
However, Caldwell also said he’s not happy that the Council chose to use bond money for the additional housing funding because it incurs debt that would have to be paid back over 20 years.
"That’s about $54 million that we’re all going to be paying to get $32 million worth of CIP money to spend," he said. "I’m troubled, I’m worried about debt service, but at the same time, we need to address our low-income working families, our homeless families, and our chronic homeless."
Martin, in response, said the administration can defer other CIP projects with lower priority if debt is a concern.
The mayor and city Community Services Director Pam Witty-Oakland also warned that the appropriation will lead the city back into the housing business just as it was about to unload its affordable-housing stock.
Witty-Oakland said using general obligation bonds requires the city to develop the units or buy units or buildings and basically retain full ownership. The administration would have preferred using more money for Housing First, as initially envisioned, from the Affordable Housing Fund because money from that pot is less restrictive, allowing the city to partner with private entities and even seek proposals from developers who could leverage the city’s money to finance their projects.
Caldwell said the challenge is made even greater because the Council chose to take out $1 million in operating budget funds set aside to help administer homeless and housing programs. "But we’re going to look for every opportunity we can find."
