The state's repeated, multimillion-dollar raids of affordable housing funds to balance the budget, its failure to get tenants into scores of empty public housing apartments on a timely basis and its accumulation of an unusually high percentage of vacant units have contributed — some say substantially — to Hawai'i's growing homeless crisis.

The crisis also has been exacerbated by the state's inability to use hundreds of federally funded rental subsidy vouchers during a critical three months in 2004, resulting in numerous poor families not being able to get help with their rent even today, more than two years later.

While many reasons can be cited to account for the homeless crisis, including some beyond the control of government, the state has added to the worsening situation because of shortsighted decisions to siphon more than $200 million from the housing funds over the past decade, and because of its poor record of maintaining and keeping occupied hundreds of public housing units, homeless advocates and housing industry officials say.

Some apartments, in need of major repairs, have been vacant more than eight years.

The state's poor management of the so-called Section 8 voucher program in 2004 has added to the homeless pressures because that has led to reduced voucher funding, meaning fewer low-income families are able to get rental assistance. In 2005, the federal government switched to a new funding formula based on vouchers used during the three-month period in 2004, and Hawai'i's utilization rate at the time was the worst in the country, according to one survey. Annual funding still is based on that 2004 benchmark.

Many homeless residents are on wait lists thousands deep for the state's public housing and Section 8 vouchers. The waits can last years.

Experts say the combined effect of the fund diversions and housing-program inefficiencies clearly has worsened the homeless crisis — a contention even state officials don't dispute.

"It's been devastating," said Terry Brooks, president of Housing Solutions Inc., a nonprofit developer and operator of homeless shelters and low-income housing. "Look where we've ended up."

Where Hawai'i has ended up is with a high-profile social crisis that is as complex as it is widespread and that increasingly has attracted national attention.

On any given day, thousands of Hawai'i residents are believed to be homeless, though no one has a precise count. Over the past year especially, the specter of hundreds of families living on the beaches, particularly along the Wai'anae Coast, has generated news stories nationwide.

$212 MILLION TAKEN FROM HOUSING FUNDS

Many of the more recent homeless ended up on the beaches because they couldn't afford escalating rents, a problem exacerbated by the state's severe shortage of affordable homes.

Yet since 1995, the state has diverted roughly $212 million from funds designed to stimulate the building of affordable rentals and for-sale homes to assist income-eligible families with down payments for their first homes, and to underwrite other programs meant to address Hawai'i's housing-affordability crunch.

Under the watch of a Democratic-controlled Legislature, a Democratic governor and a Republican successor, the money was taken from the special funds in seven of the past 10 years —1999, 2000 and 2001 were the exceptions — and mostly put into the general treasury to help balance the state budget, according to state figures. Raiding special funds to plug budget shortfalls became commonplace during tight fiscal times.

All told, about $202 million of the $212 million was plucked from housing development funds and could have helped finance the construction of upward of 2,000 to 2,600 rental and for-sale homes — many that would have been offered at below-market prices, according to data provided by Gov. Linda Lingle's administration. Lingle took office in late 2002, succeeding Gov. Ben Cayetano, who began his two-term tenure in 1994.

Another $8 million was siphoned in 2002 and 2003 from a fund established to help eligible first-time homebuyers with their down payments. Those diversions prevented the state from helping about 530 families, the Lingle data showed.

Adding to the pressures that have contributed to the homeless crisis, the state has done a lackluster job of ensuring that public housing units are filled quickly when they become vacant, partly because it doesn't have sufficient dollars to keep up with maintenance and repairs. At least one Mainland analyst said the federal government is largely to blame for the funding shortfall. To supplement the rent collected, the state gets money for operating and renovating Hawai'i's federally subsidized public housing inventory, which totals more than 5,300 rentals, many in aging, rundown buildings.

State officials cite a shortage of funding to help explain why the average turnaround time to repair and get a new tenant into a vacant federal unit has ballooned to 352 days — nearly 12 times more than the 30 days federal officials push for. When money is short, major repairs often are put off for years.

State officials also say inadequate funding helps account for why 14 percent of the federal units are vacant — three to four times the rate the federal government prefers. At the beginning of October, 759 of the 5,363 units were unoccupied, including nearly 100 that had been empty at least 1,000 days. About half of the unoccupied units need major repairs or are scheduled to be demolished because they are in such poor condition.

Mismanagement also has been a factor in the state's spotty performance.

The state housing department, which in July split into a public housing agency and a housing finance one, did such a poor job of managing its federal housing programs that the U.S. Department of Housing and Urban Development several years ago threatened a takeover. Citing numerous shortcomings in management and financial operations, HUD in 2004 designated the agency as troubled, a classification that put millions of federal dollars at risk. Last year, HUD lifted that designation, saying the state had made improvements in many areas.

CONCERNS REMAIN ABOUT TURNAROUND TIME

But HUD still voiced concerns about the length of time the state agency, now called the Hawai'i Public Housing Authority, takes to get new tenants into empty units. That turnaround time for empty units, which averaged 210 days at the beginning of 2005, has increased nearly 70 percent since then, mainly because the state has put back into the pipeline older units that were offline for years.

"It's still an area of concern," HUD spokesman Larry Bush said of the state's high turnaround times.

Those extended times and the high number of vacancies mean slower relief for families looking for permanent housing but now living in beach encampments, filled-to-capacity homeless shelters, overcrowded homes of relatives or in other temporary quarters.

With roughly 12,000 people on the state's public housing wait list and the waits averaging three to six years, any economic calamity — a rent hike, job loss, major illness — can push a family just barely making ends meet into the ranks of the homeless.

Steve Bader, executive director of the East Hawai'i Coalition for the Homeless, is constantly reminded of how slow relief can come amid a growing homeless crisis.

Bader's group runs a homeless shelter in Hilo, only blocks away from a public housing project in which units have sat vacant for more than seven years. The state is scheduled to tear down the last of 92 units in March. Twenty new units will be built at the site.

"It's just frustrating to drive by and see those units just sitting there while we have 50, 60 families on a waiting list for our emergency housing," Bader said.

STATE STILL PAYING PRICE FOR 12.3% UNUSED VOUCHERS

Also frustrating to homeless advocates is the state's spotty record with Section 8.

During the 2004 period that the federal government set as a funding benchmark, housing agencies nationwide used all but 3 percent of their authorized vouchers, according to a survey by the Center on Budget and Policy Priorities, a Washington, D.C.-based nonprofit.

The unused vouchers among Hawai'i's housing agencies averaged four times that level, or 12.3 percent, the worst rate in the country, the survey showed.

That number was dragged down by the shoddy showing of the state and Kaua'i housing departments.

While the Honolulu agency used all its authorized vouchers, the Big Island one used virtually all its vouchers and the Maui one nearly 93 percent, the state agency, formerly known as the Housing and Community Development Corp. of Hawai'i, failed to use 22 percent, according to HUD data. Kaua'i, running a much smaller program, didn't use 44 percent of its authorized allotment.

That inefficiency proved costly.

The state agency's funding was cut from $16.3 million in the last year of the old system to $15.2 million in the first year, 2005, under the new system — a 7 percent decline, according to HUD data.

Based on an average monthly subsidy per voucher of roughly $550 in 2005, that $1.1 million could have helped more than 160 families pay their rent for the full year. About 1,900 families currently are getting Section 8 assistance from the state housing agency. A tight rental market, leading to escalating rents, has contributed to the shrinking number of families being helped.

Asked whether the Section 8, fund diversion and public housing factors have contributed to the homeless crisis, Patti Miyamoto, the state agency's interim executive director, said, "It definitely didn't help the situation."

Miyamoto said staffing problems in 2004, since resolved, accounted for the low use rate of Section 8 vouchers.

Agency officials also said many vacated public housing units are filled relatively quickly, but the apartments needing major repairs bring the turnaround and vacancy averages up, especially when funding is tight.

They noted that the agency's federal funding for major overhauls has declined from $17 million in 1999 to $12 million this year.

"That is not a formula for success," said Jim Grow, staff attorney for the National Housing Law Project, an advocacy group based in Oakland, Calif. He said housing agencies nationwide have suffered because of federal cutbacks. "No matter how good you are, you end up short."

Still, Grow said the diversion of housing funds and inefficiencies in the state's housing programs likely were significant contributors to Hawai'i's homeless crisis. "These are all a big deal."

CAYETANO EXPLAINS WHY MONEY WAS DIVERTED

But Cayetano, who was governor when most of the money was diverted, said the housing market was extremely depressed in the late '90s, the housing funds in most cases were inactive, few developers were interested in doing affordable rentals for the state, and money was needed to make up for budget cuts elsewhere as social programs were curtailed or eliminated.

Before any money was diverted, Cayetano added, the state checked the level of activity within a fund, and if it was actively being used, "we let it alone," Cayetano told The Advertiser in an e-mail.

Moreover, the lack of affordable housing wasn't considered a crisis back then, making it politically more palatable for housing funds to be tapped to balance the budget, according to Ron Lim, special assistant for housing under the Cayetano administration.

In hindsight, Lim added, had the $212 million been used for affordable rentals, the homeless problem might not be so severe today, and that opportunity to turn things around still exists.

During the Cayetano administration, more affordable rentals were built with state assistance than in the previous administrations combined, according to the former governor.

More than $30 million of the $212 million was diverted after Cayetano left office and Lingle took over. But Russell Pang, her administration spokesman, said Lingle during her first year only requested that $5 million be diverted, an amount legislators increased to $15 million. Since then, Lingle has not proposed diverting any housing money to balance the budget, Pang said.

Sen. Ron Menor, former head of the Senate's housing committee, said he raised concerns whenever legislators considered diverting housing funds, but the measures were adopted anyway on the understanding the money eventually would be restored. That didn't happen.

Given the magnitude of the homeless crisis, Menor said the Legislature has to increase funding for affordable housing during the upcoming session.

The state also must do a better job in running the housing programs, Menor said. "I saw how the state agency was botching the Section 8 and other programs," he said. "I continue to have major concerns about the vacancy rates and turnaround times."

HOMELESS CRISIS NOW COMMANDS ATTENTION

The increased attention on the homeless situation comes in the wake of an Advertiser series that examined the problem along the Wai'anae Coast, the epicenter of the crisis.

Entire families have taken up residence along the beaches there, sometimes with at least one adult holding a job. But for many, the price of housing has become too steep.

The crisis has strained the school system, where homeless kids sometimes show up hungry and dirty, and the healthcare system, which already was struggling to deal with serious medical problems in the community at large.

While the state's missteps have contributed to the homeless crisis, it also is leading the charge to try to resolve the problem. The state has opened two emergency shelters this year, is building a transitional shelter in Wai'anae and is pursuing other possible sites.

It also is stepping up efforts to get more permanent affordable housing built, working with the city, nonprofits and other developers.

"Clearly, the state can and must improve its performance in response to affordable housing issues and the homeless crisis," Menor said.

Reach Rob Perez at rperez@honoluluadvertiser.com.