By Walt Harvey (R), ABR, CRS, GRI, SRES, ePRO, QSC
Isn’t it curious when our elected officials talk about “affordable housing” since one of the largest barriers to “affordable housing” is the government? In their infinite wisdom, our legislators pass laws that require developers and home builders to wait years for permits to build homes. Every month’s delay raises the cost of the home to the consumer. As part of the approval process, the developer is required to pay impact fees to build schools and parks in the project’s neighborhood. This adds to the cost of the home. Never mind that many times, those impact fees collected by government are never used for the intended purpose. The developers are often required to offer up to 20% of their project as “affordable housing”. This requirement raises the prices for the remaining units.
Now the legislature wants to raise prices even more. SB1897 increases the conveyance tax on a sliding scale. SB1814 assesses additional impact fees. SB1870 imposes general excise tax on owner-builders. HB1243 changes the conveyance tax rate to an unspecified rate. All of these increases add to the cost of housing.
The most egregious proposals are HB0923 & SB1366. SB1366 increases the general excise tax to 5% and HB0923 allows each county to impose their own general excise tax. The Honolulu Advertiser, February 9, 2005 made it simple: “..families could pay an extra $900 a year if the state excise tax is raised..” That’s $75 a month that a family of four would not have to apply to rent or a house payment!
With legislators continually raising our taxes and fees, housing prices go up and disposable income goes down. Affordable housing? Who is really responsible? Call your representatives and encourage them to oppose the above bills.
Walt Harvey is a real estate broker with East Oahu Realty and is Quality Service Certified®. Walt partners with his wife Arla and together they specialize in residential, commercial and investment real estate. You can reach them on their website: www.coastalhawaii.com. Real estate question? E-mail them: walt@coastalhawaii.com or call 375-8959.
Published in Small Business News, April 2005
Here are some links that discuss 'Affordable Housing': http://www.rppi.org/housland.html