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While a tax hike to fund homeless services may not pass, housing advocates have a plan

Noe Tanigawa

After a key bill didn't meet an important deadline, housing advocates hope lawmakers will create a dedicated stream of funding for homeless services this session.

More than a dozen people without housing waited to testify in support of Senate Bill 678 two weeks ago. However, they never got the chance to speak that day.

The bill seeking to increase the state's home sales tax in an effort to fund solutions to homelessness was scheduled to be heard by the Housing, and Health and Human Services committees on Feb. 7, but it was deferred.

In an effort to regain lost time, the measure's supporters gathered on Kauaʻi over the weekend to voice their unheard testimonial opinions.

"I'm here because I feel like the voices of our people were taken away that day," said Nicky Winter, the executive director of the nonprofit Achieve Zero.

"I understand there's a lot of bills. But how do we solve the single biggest crisis without talking to the very people that are experiencing it?" she said.

Winter told attendees that the lack of support isn't only impacting houseless individuals, but also the outreach workers that connect and provide support. She said many workers burn out in months, rather than years.

SB 678 would have risen the conveyance tax from 2% to 6% for properties selling for more than $2 million in the state. The tax is only applied when a property is sold or transferred, and is not an annual property tax.

In addition to homeless services, revenues would have also gone to state land preservation and affordable housing efforts.

"Senate Bill 678, for me, is a no-brainer. Dedicated funding to homelessness is a no-brainer," Winter said. "I don't care where the money comes from, we should be throwing everything that we have in the arsenal at homelessness."

While there's currently a slim chance SB 678 can advance in the Legislature, advocates are focusing on other conveyance tax measures. They hope other bills can be amended to include provisions for homeless services.

Other bills, such as Senate Bill 362 would raise the conveyance tax, but wouldn't allocate any funds for homeless services. The measure goes before the Senate Ways and Means Committee this week for a decision.

House Bill 1211 also raises the conveyance tax, and carves out 10% for homeless service efforts. While advocates appreciate the bill has an allocation for services, they hope to raise that cap as the 2023 session continues.

When it comes to Hawaiʻi's conveyance tax rates, advocates say the state is low compared to other high-cost areas in the U.S.

"San Francisco, Seattle — they have this problem, as well, severe affordable housing shortage," said Kenna StormoGipson, the housing policy director at Hawaiʻi Appleseed.

According to StormoGipson, the state's maximum conveyance tax rate is 1.25% compared to San Francisco's 6%.

"Seattle, they increased theirs to 3.5% for any home over $3 million. Our $3 million home is paying basically a half a percent, and hasn't been updated in at least 10 years. But has our homeless problem gotten worse in 10 years?"

StormoGipson estimates revenues from a conveyance tax rate hike could provide roughly $40 million annually for homeless services. That's more than triple the amount the state allocates for homeless services.

Casey Harlow was an HPR reporter and occasionally filled in as local host of Morning Edition and All Things Considered.
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