Kaua‘i County Council member praises Grassroot housing policy

from Grassroot Institute

Kaua‘i County Council Member Ross Kagawa spoke favorably about the Grassroot Institute of Hawaii’s approach to housing policy during the Council’s May 14 special meeting in Lihue.

Kagawa mentioned Grassroot while expressing his reservations about Resolution 2024-13, which would increase the County’s tax rates on hotel and resort and vacation rental properties for fiscal 2025 with the intention of using the revenue for affordable housing,

Grassroot policy researcher Jonathan Helton had testified that there are better ways to address the county’s housing problems than adding to the tax burden of residents and tourists.

He said “removing some of the many regulations that hinder homebuilding would cost the county nothing and most assuredly result in an increase in the supply of homes.” He recommended Grassroot’s policy brief “How to facilitate more homebuilding in Hawaii” for further guidance.

Kagawa said during the hearing that he had “no problems with raising taxes on hotels, TVRs, … as long as it fits a purpose that I feel like would require us to take that measure.”

But sometimes, he said, “I certainly … come from the philosophy that if you really want things to change substantially, you gotta let the private sector do it, not the county be a developer, not the state be a developer.”

In some ways, he said, “if you talk to Grassroot Hawaii … and you hear how they say the government will support and step out of the way, don’t be the developer, I think that’s a better route to having the [housing] inventory that will satisfy all of our affordable needs. … So, I mean, I have some systemic problems with the housing agency, our philosophy at times. And I really think that chipping away is not helping.”

Despite the concerns expressed by Kagawa and Grassroot, the Kaua‘i County Council approved the resolution.

TRANSCRIPT:

Kaua‘i County Council Special Meeting, May 14, 2024, 8:30 a.m., Historic County Building, Lihue

Mel Rapozo: Mr. Kagawa.

Ross Kagawa: Thank you for your proposal. 

I have no problems with raising taxes on hotels, TVRs, I think, as long as it fits a purpose that I feel like would require us to take that measure. Think that we raise taxes on anything, it kind of messes us up going forward, but we really need the money going forward.

You know, we’ve already tapped the easy source that we that we know our local residents would support is, you know, okay, go tax the hotel, TVRs and hotels, you know. So I think we kind of throw out that option going forward when you really need the money. We’ve never had as much money as we’ve had this year and last year. And I always go back to the days when we first got in, Mr. Chair, you know, we were TAT taking away from us.

We didn’t have GET. We were really broke. And you know, now with the influx of monies, you know, I’m just afraid to, you know, increase taxes on hotel and visitors, unless it really meets, you know, like, okay, we’re gonna make a big difference in our affordable housing, or we’re gonna add inventory to our problem with width for the walls. We’re going to add inventory automatically. I just don’t see the quick outcome.

And I know sometimes you need to look long-term purchase plan and what have you. But I certainly sometimes come from the philosophy that if you really want things to change substantially, you gotta let the private sector do it, not the county be a developer, not the state be a developer. In some ways, if you talk to Grassroots Hawaii and Institute of Hawaii and you hear how they say the government will support and step out of the way, don’t be the developer. I think that’s a better route to having the [housing] inventory that will satisfy all of our affordable needs.

Not just those at 80% and below. That seems to be our county’s focus — 80% and below. That sounds great, but there are people at 120% and below or 140% and below that are also working very hard on the island and trying to live there and buy a house. We have a serious inventory problem.

Throwing money at the housing agency to support 80% and below is not going to solve our affordable housing problem. It’s going to worsen it because we need to be thinking about all categories that need houses, not just those at the certain threshold and below. So I mean, I have some systemic problems with the housing agency, our philosophy at times. And I really think that chipping away is not helping. 

Thank you, Chair.