Honolulu State of the City Address

Picture of Honolulu Mayor Rick Blangiardi

By: T. Jeffersonian

On March 15, 2021, Mayor Rick Blangiardi delivered his first State of the City Address. The Mayor used his address to list some of his priorities with affordable housing, infrastructure, and homelessness being amongst the top. He opened his address describing the Coronavirus impacts on the community and marked that by the end of this week, more than 500,000 vaccines will have been given in Hawaii.

Here in Hawaii, the first most pressing issue on any politician’s minds are budget shortfalls. The Blangiardi budget which was submitted on March 2, 2021 is $73 million less than last year. Last year, the City was facing a projected budget shortfall of $400 million. That projected shortfall is now down to around $31 million. Blangiardi’s budget is a relatively static operating and capital improvements budget. He emphasizes that his team has not been focused on the revenue that they do not have, but are focused on getting things done with what they do have. The Mayor repeatedly expressed he has no interest in raising property taxes as a means to make up the $31-$73 million revenue shortfall.

The revenue shortage is a difficult obstacle to overcome when tackling homelessness. Homelessness has increased over the years. Governor David Ige came into office six years ago with same intention – eradicate homelessness – and those efforts have been unsuccessful. Then there was just under 7,000 homeless in the state. Now, after coronavirus, the number is probably several thousand more. Blangiardi’s plan is to expand the City Office of Housing into the Office of Housing and Homelessness which could mean more resources and more solutions to tackle the homeless crisis. Through the expansion, service providers should have more responsibility in which efforts to pursue. The City will support the execution of those efforts. Expanding any government office equates to a need for additional revenue and adding bureaucracy to an already complicated problem.

Another priority for Blangiardi is re-examining the city’s efforts in creating more affordable housing. He believes Honolulu needs new ideas and new vision and criticizes government for not being historically good about building affordable housing. One new idea to promote the development of affordable housing, is creating an incentive for private landowners. Bill 1 was introduced to the Honolulu City Council earlier this year. Bill 1 gives landowners the ability to build units at a reasonable rate. Incentivizing in this matter means subsidizing costs. Either the government pays for part of the costs or they give a tax break. Either way means means less revenue and more City expense.

Housing the homeless also means other government costs. Homeless do not have jobs, so we need to educate them, provide them a skill, and a job. Some have physical health issues, some have mental health issues, some have both. Some are addicted to drugs and alcohol. Some are felons. These issues all represent hidden enduring costs and higher risks. Very few of the homeless need to be simply dusted off, given a break and an opportunity, and sent on their way. Regardless, they are fellow human beings. They need help. We have to try. Blangiardi, and other politicians who have tried to solve this problem, are applauded. We simply need to make the money that helps us to fix homelessness permanently without having to sacrifice other necessities.

Another commitment Blangiardi is making is combating climate change, and making Oahu more resilient to its effects. He says there is a two-fold approach to addressing it: one is eliminating carbon pollution through decarbonization, and the second is preparing communities. He says last week’s flooding is proof that more needs to be done within communities. He wants to shift away from talking about the issue to actually doing something. His ideas entail investing in drainage and flood management improvements at various locations island-wide to protect communities and City facilities. This would include channel wall reconstruction, dredging streams and lagoons, reconstructing debris basins, and assessing drainage outfalls where water flows into the ocean. Blangiardi says he is working with state and federal partners to financially back these projects. He is also working with them to get aid for residents and communities that were impacted by recent flooding.

Other commitments made by Blangiardi during his address include: moving the rail project forward and closing its $3 billion budget shortfall, improving government services most especially in historically underserved communities, and the revitalization of Chinatown.

The revitalization of Chinatown proposal, leads to one interesting solution that can generate more revenue for Honolulu and Hawaii. Businesses, especially financial businesses, are leaving Hong Kong due to concerns over social unrest and an erosion of the city’s political autonomy. The exit of white-collar businesses marks a setback for Hong Kong, long a favorite destination for global companies seeking an Asian base of operations, thanks to its low tax rates, English-speaking workforce, and autonomy. Last year, the foreign exodus was particularly stark in the financial sector, with 52 banks and financial companies and 24 insurers leaving the city. Much of the exodus is currently heading toward Singapore, but with the right incentives, that exodus could come to Hawaii instead. Finances, online gaming, and cyber security are all predominantly virtual, global endeavors. Governor David Ige proposed the broadband focused Hawaii 2.0 initiative in his State of the State address. Revitalization of Chinatown and the exodus of Hong Kong businesses present the perfect combination to revitalize and increase City revenue generation.

I would encourage Mayor Blangiardi and the City Council to establish a special economic zone in a revitalized Chinatown. Perhaps this could be a tax free or reduced tax zone of some kind that would be attractive to financial, virtual businesses relocating from Hong Kong and other Asian locations. Keep the rest of the City and state as they are, but run a pilot program in Chinatown. Should the pilot prove successful, it can be installed throughout the remainder of the city.

There is no justifiable reason why Hawaii should not become a real alternative and a real competitor to Singapore, Japan, China, and Korea based financial and other businesses seeking to relocate elsewhere. If Mayor Blangiardi is indeed serious about implementing new ideas and not doing things as they have historically been done unsuccessfully, setting the conditions that will attract Hong Kong based businesses to Honolulu is one place to start.