Kefalas underscores gains toward lower cost of living

The Grassroot Institute of Hawaii’s main man on the ground at the 2024 Legislature, Ted Kefalas, appeared last week on KHVH NewsRadio 830 to underscore how recent legislative wins will affect the cost of living in Hawaii — pending their approval by Gov. John Green.

Speaking with host Rick Hamada on May 16, Kefalas said foremost, the governor’s proposed income tax cuts have the potential to make life better for almost everyone in Hawaii.

“This is a direct infusion into people’s wallets and they can now, hopefully, afford more rent, afford groceries. … This is something that’s really gonna help out a lot of people,” he said.

Kefalas said two housing bills that passed also will ease the cost of living. One would allow two accessory dwelling units on qualified residential lots, the other “adaptive reuse” or the conversion of empty office and retail spaces for housing. 

“We’re in a housing shortage, and more houses that we can build is going to help lower the price,” he said.

Asked about Hawaii’s homelessness, Kefalas said past efforts to solve it do not seem to be working, “so we need to try different things.”

For example, he said, “one of the things that we would like to see is potentially create more safe parking areas for those people with cars. Maui recently created a trial run for this.”

Another thing, he said, “is looking at some of the housing-first policies. The state right now tries to encourage building houses, which sounds great. But we also need to look at paying for performance mandates. so we’re not just handing out money without any results. We need to prioritize recovery and rehabilitation before we prioritize housing in those situations.”

To hear the entire 15-minute conversation, click on the image below. A complete transcript is provided.

5-16-24 Ted Kefalas on Rick Hamada

Rick Hamada: Ted Kefalas from Grassroot is with us and Ted, thank you for your indulgence, your patience and welcome to the program.

Ted Kefalas: Thank you Rick, always a pleasure to be with you and to speak to your listeners about all the important issues that are happening in Honolulu and throughout the state.

Hamada: Do tell us about Grassroot Institute of Hawaii.

Kefalas: Yeah, so we are a nonprofit think tank based here in Honolulu, and we really try to focus on lowering cost of living and holding the government accountable, two things that I think a lot of people can get behind, but quite frankly, it gives us a lot of job security, Rick.

You know, we are one of the highest, most expensive states to live in. When you read the news, you constantly hear about different corruption scandals and whatnot. 

So we just try to be that independent voice for the local residents and make sure that everything is OK in “the big square building” [the state Capitol] and as well as at the county council.

I can’t tell you how many times they go and testify at the county council and I’m the only one there. But we feel that it’s an important role to be that kind of watchdog and to keep the public informed about all the important things that are happening.

Hamada: How can we connect with you at Grassroot Institute, and how can we actually donate and financially support the Grassroot Institute?

Kefalas: Yeah, well I appreciate that and we, you can visit us on our website, it’s grassrootinstitute.org. There’s a big, big old donate button at the top right there. But on our website, we have a ton of reports, a lot of data, policy briefs on a lot of different issues, things like housing, healthcare, taxes, the budget.

We also run a great Instagram page that we try to keep with up-to-date information and we try to make it a little bit funny, try to laugh at some of the things that are happening. That’s at @Grassroot Hawaii. And so for any of your listeners that wanna just support us or wanna just stay up to date on everything that’s happening, you can visit us on our website again, it’s grassroots.org or on Instagram, @grassroot Hawaii.

Hamada: We have quite a bit on the agenda today. I’d like to do a bit of a lightning round with you Ted, if you don’t mind and this has to do with the end of the legislative session. However, there are still decisions to be made on the fifth floor.

If you could walk us through starting off with the Green Affordability Plan, the status of that impact of this law?

Kefalas: Yeah. So, the Green Affordability Plan, for those that may remember, last year Gov. [Josh] Green tried to put in a huge income tax reform package and unfortunately it stalled out. But this year it did pass the House and the Senate and it’s sitting on his desk to be signed. I would assume that he would probably sign his own bill. Now granted it has changed. But it is a huge shift in the mindset of legislators and how they get their revenue at the state level. 

Essentially. they’re doubling the standard deduction, but they’re also shifting the income tax brackets. So what is really important about that is, essentially, as minimum wage continues to increase and as inflation continues to set in, people’s salaries are pushing them to almost middle-class tax brackets. And they’re having to pay much higher taxes if they’re just a minimum-wage employee.

So this shifts that so that they are now paying a much lower tax rate. It’s actually a tax cut for, I would say, 99.9% of local residents here, which is huge. This is more money in people’s pockets. It actually takes us to before this bill, we were the second highest income tax state in the country. This takes us down to 40th.

And so there’s only 42 states that charge an income tax. So we go from being the second highest to the third lowest. 

And again, I can’t underscore how important that is for local people to keep more money in their pockets. 

We hear all too often about lowering the cost of living and what can we do? Well, this is a direct infusion into people’s wallets, and they can now be able to, hopefully, afford more rent, afford groceries.You know, this is something that’s really gonna help out a lot of people. 

So we are really glad the Legislature somehow found the money for it. And we hope that they can continue with this. It’s going to be a tax cut, almost a perpetual tax cut, as they shift the brackets every other year until 2031.

Hamada: Again, lightning round. You and I can have a conversation about that as well, but I want to make sure that we have a chance to cover all that you have for us today. Housing.

Kefalas: Yeah, housing. There were two big bills. The first would allow two ADUs [accessory dwelling units] on residential lots in Hawaii. Again, that is something that is huge. But the other one is adaptive reuse. 

So we see so many of these empty office spaces and condo buildings — excuse me, empty office spaces and retail spaces — after COVID, why don’t we turn those into apartments and condos and whatnot? 

And so that is a huge bill that we’re really glad got passed because again, we’re in a housing shortage and more houses that we can build is going to help lower the price.

Hamada: It is once again with the Grassroot Institute of Hawaii with Ted Kefalas today and thank you Ted so very much for taking the time. 

I wanted to take a quick diversion, and I’d love to get the Grassroot Institute position on homelessness.

Yesterday a press conference with state and city with [Gov. Josh Green] and [Honolulu Mayor Rick Blangiardi] and more detailed strategies in light of the PIT [point in time] count, which reflects a double-digit increase over last year’s count. What are the financial analyses in the homeless issue, both state and city?

Kefalas: Yeah, well, just to recap, I think, you know, the mayor and the governor had that press conference to address the homeless issue, and anybody that walks around the streets here can tell that the homeless numbers are increasing. And specifically, it’s the unsheltered individuals.

You know, you see the numbers, you look at the report, the number of sheltered individuals has gone drastically down in the past 10-plus years. And so we’re seeing a lot of these homelessness cases that are on the streets, and they’re not getting the help that they need.

The other thing that’s kind of strange with the point- in- time count is, I’m curious if COVID played a role in lowering the numbers because if you look at the numbers as well, from about 2020 to 2022 there was a massive decrease. And so I’m curious if that played a role as well.

But as you mentioned, the governor has really taken to try to address this homelessness crisis. I mean, when he ran a couple of years ago, he put out a 10-point plan on homelessness, but unfortunately, a lot of it doesn’t seem like it’s working. 

And so we need to try different things, right? The definition of insanity is continuing to try the same thing over and over again.

So one of the things that we would like to see is potentially create more safe parking areas for those people with cars. Maui recently created a trial run for this. 

But another thing is looking at some of the housing-first policies.

The state right now tries to encourage building houses, which sounds great. But we also need to look at paying for performance mandates. so we’re not just handing out money without any results or anything like that. We need to prioritize recovery and rehabilitation before we prioritize housing in those situations. 

So we do think we should look at strengthening treatment versus funding.

But to your point, you know, I think there’s a lot of financial implications there that are kind of not in the public eye and not seen necessarily all the time. 

And it’s hard to quantify because, you know, there are a lot of times, we have our office in downtown and you see homeless individuals that are sleeping in front of businesses, and I’m sure that that’s deterring people from going into those businesses. 

So right there, that’s lost revenue, and so we need to try to find a way to address this for our local population, our business owners and for the homeless population themselves.

Hamada: The differentiation between homelessness and the investment of affordable housing. 

It appears to be two separate entities, whereas we have current homelessness in talking with those on the ground comprised primarily of those who are debilitated, addictions, mental illness, and more, but affordable housing for those who are working, who are productive, who do need a helping hand because of the cost of housing vis-a-vis revenue. 

Your differentiation between the two and just how much money collectively are we investing for approximately 4,000 — make that 5,000 — identified homeless, but then again affordable housing for those who face challenging times?

Kefalas: Yeah, I think you hit the nail on the head. I think there are a lot of different types of homeless, quite honestly. But to kind of dull it down, and, you know, you have the instances where there’s mental health, there’s substance abuse, and it’s about getting those people the treatment, like I mentioned earlier.

But then you have the affordable housing aspect, and there are a lot of different factors that play in there. 

You have, you know, buildings that are focused on folks that make below 80% AMI [area median income]. One of the things, though ,that we have to consider is there are people that make 81% of AMI. There are people that make 90% of AMI, 100%. And so we can’t forget about those people as well that also need affordable housing.

These are folks that are working two, three jobs. We call them the ALICE class. So it’s asset-limited, income-constrained. 

And that’s what we also need to focus on again is looking at trying to make these homes affordable for the folks that are truly out there working and truly trying to provide for their families.

So, again, I mentioned the ADU bill and the adaptive reuse, but those are two bills that we think are going to directly impact the affordable housing issue — ADUs specifically because they are smaller, they have a smaller footprint, they’re usually not as tall, they’re not like big condos, but you’re able to have a yard still. 

So that’s something that we think is going to be directly targeted towards local residents as opposed to investors, let’s say.

But then also looking at adaptive reuse, you know, I know that there are probably 10 projects right now in Honolulu, in downtown Honolulu, that are looking to convert office space or retail space into housing. And that’s going to really revitalize our neighborhood.

If you go into Chinatown now, Rick, as you probably know, I mean, after 5 p.m., it’s a ghost town. And so, you know, to be able to create a community down there with folks that are living down there, will also, I think, you know, not necessarily solve the homeless issue, because it is a much bigger problem, but it will help I think address some of those issues that we see.

Hamada: Ted we’re coming right up to the top of the hour in a moment including a weather update. Before we go, remind us how to connect with Grassroot Institute of Hawaii.

Kefalas: Yeah, so you can go on our website. It’s grassrootsinstitute.org. You can actually sign up for our newsletter. It comes out every Friday, as well as our president, Dr. Keli’i Akina, writes a “President’s Corner” every Saturday. 

So you can go on our website, sign up for our newsletter update.

Again, you can go on our Instagram at grassrootHawaii. But I do want to underscore one really neat feature that we have on our website.

Hamada: Quickly, please Ted.

Kefalas: If you go on our website, Take Action, you can actually write a note to the governor asking him to sign some of the particular bills that we’ve mentioned here today.

Hamada: On that note, I thank you very much Ted for taking the time and appreciate the updates today.

Kefalas: Yeah, thank you Rick, always a pleasure.

Hamada: All right, all the best, take care. Ted Kefalas with Grassroot Institute up against the top of the hour news.



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