While people complain about rising property taxes in Honolulu, worse yet is the situation of people who can't find an affordable home.

It's become so bad that the squeeze isn't just on low-income families. Now even middle-class families with healthy incomes have been victimized by rising prices.

On O'ahu, affordability is at the lowest level since 1994, according to the Honolulu Board of Realtors. A buyer with a median household income of $67,750 would have to spend 50 percent of it to buy a median-priced home valued at $600,000.

But we don't have to give up on the American Dream.

Not if the state Legislature does its job.

Lawmakers took an important step to deal with the housing crunch when they increased the conveyance tax, effective July 1, 2005.

The law levies a higher tax on homes sold above $600,000. The money, according to the bill, will be used to buy so-called "legacy lands" such as view planes, ocean access and the like. Some of it would also support existing state affordable housing programs.

Unfortunately, the tax isn't solely dedicated to those issues.

Lawmakers allowed the general fund to siphon off just enough to make a significant reduction in the potential impact of this new tax. While it might be realistic to hold back a small amount for overhead, this should not become a backdoor general tax increase.

When they convene next month, lawmakers should take action by giving a much larger percentage, if not all, of conveyance tax funds to the key targets of affordable housing and legacy lands.

The increase would help extend housing subsidies to the low-income folks. It could also help subsidize developers to build affordably priced homes.

Gov. Lingle is already pushing a plan that raises the income eligibility limits on certain housing programs to 140 percent of the state's median income.

That would be an aid to those middle-income people caught in Hawai'i's affordability limbo.

But it's clear: The issue of affordable housing should be a major priority in the coming legislative session.

If the American Dream of homeownership or even decent rental housing is to stay possible in Hawai'i, it will take decisive action from the state Legislature next year.