HomeMy WebLinkAbout07/06/2016 Council minutes COUNCIL MEETING
JULY 6, 2016
The Council Meeting of the Council of the County of Kaua`i was called to order
by Council Chair Mel Rapozo at the Council Chambers, 4396 Rice Street, Suite 201,
Lihu`e, Kaua`i, on Wednesday, July 6, 2016 at 8:32 a.m., after which the following
Members answered the call of the roll:
Honorable Mason K. Chock
Honorable Gary L. Hooser (present at 8:32 a.m.)
Honorable Ross Kagawa
Honorable Arryl Kaneshiro
Honorable KipuKai Kuali`i
Honorable JoAnn A. Yukimura
Honorable Mel Rapozo
APPROVAL OF AGENDA.
Councilmember Kagawa moved for approval of the agenda as circulated,
seconded by Councilmember Chock, and carried by a vote of 6:0:1
(Councilmember Hooser was excused).
MINUTES of the following meetings of the Council:
June 1, 2016 Council Meeting
June 8, 2016 Public Hearing re: Bill No. 2632
(Councilmember Hooser was noted as present.)
Councilmember Kagawa moved to approve the Minutes as circulated, seconded
by Councilmember Kuali`i, and unanimously carried.
Council Chair Rapozo: Motion carried. Next item, please.
INTERVIEW:
BOARD OF WATER SUPPLY:
• Beth A. Tokioka —Term ending 12/31/2018
Council Chair Rapozo: Thank you very much. Beth, if you could come
up. As we do with all our nominees, if you could just take a few minutes to tell us
about yourself and then we will open it up for questions. We do have a copy of your
application. With that, you can proceed.
BETH A. TOKIOKA: Thank you very much. Aloha and good
morning. My name is Beth Tokioka. I am honored to be considered to serve on the
Board of Water Supply for the County of Kaua`i. I have known all of you for a number
of years, but I would like to take a few minutes to introduce myself and share some
COUNCIL MEETING 2 JULY 6, 2016
of my thoughts on what my goals would be as a member of the Board of Water Supply.
I moved to Kaua`i in 1992 and I currently reside in Puhi. I have been here for
twenty-four (24) years. I currently work for Syngenta Hawai`i, LLC in Kekaha as the
Community Outreach Manager. When I first moved to Kaua`i, I worked in the visitor
industry for two (2) years before I accepted a position with Maryanne Kusaka when
she was elected Mayor in 1994. After had she was reelected in 1998, I became the
Public Information Officer, which I did for four (4) years. When Mayor Bryan
Baptiste was elected in 2002, I decided to leave county government at that time, and
I accepted a position with the Transportation Security Administration (TSA) as they
were rolling out the TSA at Lihu`e Airport. I spent about nine (9) months there.
Believe it or not, I actually missed working in county government. I missed the close
association with the community. The federal government is very different. When
Mayor Baptiste offered for me to come back as the Director of Economic Development
at that time in 2003, I jumped at that chance to come back. I spent five (5) years at
the Office of Economic Development (OED). That was a great experience working
with the business community and learning more about what their needs were. As we
all know, Mayor Baptiste passed away in 2008. When Mayor Carvalho was elected
Mayor later that year, he asked me to be his Director of Communications. I did that
for six (6) years. After almost twenty (20) years with the County of Kaua`i, much
longer than I expected to be there when I first started, I just decided it was time to
move back to the private sector, and I accepted my current position a little over a year
ago.
I just wanted to make a personal note that when I first took the job with the
County, I was very new to the island. I had never worked in government service. I
really had no idea what I was getting into, but I am so forever grateful for that
experience because it really changed my life. To be able to serve under three (3)
Mayors and work with numerous Councilmembers over the years was a true privilege
and gave me a chance to serve the community in a way I never could have otherwise
and it really has made me a better person. Also, it taught me many valuable lessons
along the way that I think would help me in a position such as this as a member of
Board of Water Supply. It taught me how to be a good listener, how to have an open
mind, the importance of follow-up, how to work through bureaucracy so that we can
get to results, and I think most importantly, how to open up effective lines of
communication between government and the people that we serve. I am no longer a
public servant, but those skills serve me well every day. They say, "You can take the
girl out of public service, but you cannot take public service out of the girl." I think
it is just part of who I am now thankfully and gratefully.
I am thrilled at this opportunity to play an important role in an important
entity such as the Board of Water Supply. I have a lot to learn about the current
issues before the Board. I have been doing a little bit of my own due diligence so I
have some understanding of some of the major issues that they are facing, but I know
how the Board works and how it relates to other agencies of government and the
public. There are basically three (3) areas that I think that I would focus on as a
member of the Board. First, obviously would be the basic making sure that the
Department operates efficiently and in accordance with a good financial plan.
Secondly, we have to ensure that the Department is providing excellent customer
service. For me, that is not just to the public at-large, but that is internally as well.
I think internal customer service is just as important that departments are working
well together, that employees are supportive and respectful, and that we are getting
the job done internally as well as we can. Third, is to make sure that the department
COUNCIL MEETING 3 JULY 6, 2016
is collaborating externally with other departments of the County, with other agencies,
and that the Board of Water Supply is at the table when plans are being developed,
if appropriate, so that plans are not developed that are not achievable if the
Department of Water is to play a role.
(Councilmember Kagawa was noted as not present.)
Ms. Tokioka: I think it is really important for the Board to
be integrated and collaborating as much as possible. I think that also helps the Board
to be more sensitive to what is happening in the greater community and not just
focused on the internal workings of the Board of Water Supply. With all of that said,
I thank you for your consideration. Again, it would be an honor to serve in this
capacity, and I am happy to answer any questions that you might have.
Council Chair Rapozo: Thank you very much. Do we have any
questions for Beth? Councilmember Yukimura.
Councilmember Yukimura: Hi Beth. I do not think we have ever gotten
as many letters of support on any other appointee then we have with you. I think
that is a real testimony to the level of respect that there is out in community for you.
Ms. Tokioka: Thank you.
Councilmember Yukimura: I know that once when you were leaving, I
stood as part of a standing ovation to you because of the work you have done from the
way you created the Kaua`i Made/Kaua`i Grown program to how you handle the
community host benefit issues for many years. Those were really stellar examples of
your work. So I really appreciate that. I also appreciate the goals you have set forth
for the Board of Water Supply and I concur with them. I am really glad that you
would be interested in that. The only place that I would have questions about is on
the potential conflict of interest. Since Grove Farm Company, LLC owns a lot of
water system or at least has issues with water, the question is whether Syngenta is
leasing any lands from Grove Farm Company, LLC so that if something came up from
Grove Farm Company, LLC, whether you would recuse yourself?
Ms. Tokioka: I think in any situation like that, I think any
member of any board needs to consult with the County Attorney and determine if the
conflict exists. I have a lot of trust in Mauna Kea and his staff. Absolutely, as with
any board member, most of us have private employers and we have to be mindful of
those potential conflicts. Certainly if that were to arise and it were seen to be a
conflict, I would recuse myself, absolutely.
(Councilmember Kagawa was noted as present.)
Councilmember Yukimura: That is good. Thank you. I think the actual
arbitrator of ethics would be the Board of Ethics. They usually advise us to go to the
Board of Ethics.
Ms. Tokioka: Absolutely.
Councilmember Yukimura: Thank you.
COUNCIL MEETING 4 JULY 6, 2016
Council Chair Rapozo: Thank you. Are there any other questions?
Councilmember Kagawa.
Councilmember Kagawa: First of all, Beth, thank you for submitting
your name and being willing to serve. One of the concerns I had with the Board of
Water Supply was the most recent issue that they took up with raising the hook-up
charge from six thousand dollars ($6,000) to fifteen thousand dollars ($15,000). My
concern with that was that it is a large jump at once. I would rather see something
maybe six thousand dollars ($6,000) goes up one thousand dollars ($1,000) a year
until we hit fifteen thousand dollars ($15,000). The question from the Board of Water
was who subsidizes the gap? I would say obviously the ratepayers would subsidize it
until it hits. I just thought it was too large a jump. Would you be willing to relook at
that issue? Do you see problems with that nine thousand dollar ($9,000)jump in one
(1) year?
Ms. Tokioka: I was following that as well and I know that
is a huge leap. I understand the reasons why. I know there was a study that was
done and that is the number that was determined to be the breakeven where the
meter would actually pay for itself. I understand that has been approved, so it is in
place right now.
Councilmember Kagawa: Yes.
Ms. Tokioka: I think the Board would have to reconsider it,
and I also know that they are currently talking about some type of an allowance for
affordable housing. That is definitely on the table at this point. I think, yes. I mean,
in my mind, I know we have to pay our bills and I know we have to cover our costs,
but we have to do it in a way that we do not shoot ourselves in the foot especially
when it comes to affordable housing because you can achieve that net zero with
affordable housing by not building any. If you raise it that high and no affordable
housing is being built, then yes, you are not losing money, but we are not achieving
our goal and that is where I think the collaboration with other departments and
agencies is really important. I think that I do not know what the possibility at this
point in bringing the entire Facilities Reserve Charge (FRC) back to the table, but it
is certainly something that I want to be looking at and definitely look forward to being
in the conversation that is ongoing right now about affordable housing.
Councilmember Kagawa: You kind of hit the nail on the head for me. A
nine thousand dollar ($9,000) jump is not a concern for the rich newcomers that
purchase property. I am also concerned that just to look at it as helping affordable
housing, meaning low-income.
Ms. Tokioka: Right.
Councilmember Kagawa: To me, that may not be enough. I would like
to see the middle class also, because a lot of time the middle class is also living
paycheck to paycheck. Once you are approved, I hope that maybe you can expand
that to also include not only low income, but the middle class.
Ms. Tokioka: Yes.
COUNCIL MEETING 5 JULY 6, 2016
Councilmember Kagawa: I will be supporting your nomination. Thank
you.
Ms. Tokioka: Thank you.
Council Chair Rapozo: Thank you. Are there any other questions?
Councilmember Yukimura.
Councilmember Yukimura: On that particular issue, if the middle class or
even the affordable housing projects do not pay for it, then who pays for it?
Ms. Tokioka: I think that is the discussion that has to be
had. I would want to dig into the financials of the department. I understand that
there are surpluses at the department. You certainly do not want to spend down your
entire surplus, but there would have to be ways to look at that. I think that just
throwing that number onto an affordable housing development is going to have a
chilling effect on it. We have to be creative. I do not know that all options have been
looked at. I am hoping that we can be very creative and look at more options as to
how that could possibly be financed or covered.
Councilmember Yukimura: As my Affordable Housing Advisory
Committee has been working on this issue, one (1) of the things that has come up,
but we have not fully investigated is the fact for County housing projects, which would
seem the neediest in terms of some waivers of development fees, there is a developer's
fee that is quite extensive. I have been looking at the difference between that fee for
nonprofits and for-profits. There is some leverage there and it does not get passed on
to the families who qualify for affordable housing.
Ms. Tokioka: Right.
Councilmember Yukimura: It is quite a complex picture to look at.
Ms. Tokioka: Yes.
Councilmember Yukimura: I hope we can look carefully because as long
as it does not stop the building of affordable housing.
Ms. Tokioka: Correct.
Councilmember Yukimura: Otherwise the ratepayers may have to pay for
it, other ratepayers or the future ratepayers, our kids.
Ms. Tokioka: Exactly. As I said, I understand why they
made that decision. I know there was a study that was done and not second-guessing
them. I was not there for the discussion. I am not here to criticize the decision that
was made. From my point of view, I think we should explore more options at this
point. I really think it is going to be very difficult. As Councilmember Kagawa
pointed out too, very rightly so, it is not just affordable housing. There is that gap
group there. So there are other homebuyers that possibly will be impacted and not
be able to afford.
Councilmember Yukimura: In that case, it will be passed on.
COUNCIL MEETING 6 JULY 6, 2016
Ms. Tokioka: Yes.
Council Chair Rapozo: Are there any other questions?
Councilmember Hooser.
Councilmember Hooser: Thank you, Council Chair Rapozo. Good
morning.
Ms. Tokioka: Good morning.
Councilmember Hooser: I want to echo some of what Councilmember
Yukimura had said earlier about the years of service to the County and the great
work that you have done on many levels in the community and the County over the
years. I want to thank you for that. I have some concerns regarding the conflict of
interest types of issues. The company that you represent, Syngenta, has been
involved in numerous legal actions, hundreds if you would, against other
municipalities around the nation for their products contaminating water supplies.
Kaua`i County was the recipient of a very small settlement. The total settlement was
over one hundred million dollars ($100,000,000) nationally for Syngenta's alleged or
any way they settled for contaminating water supplies. The purity of the water is
obviously one of the huge concerns or responsibilities of this office. When it comes to
decisions around water testing for pesticides or chemicals that your company uses or
sells, would you recuse yourself from those decisions as well?
Ms. Tokioka: I guess I would need to know the exact
circumstances. If it was determined that was a conflict, then absolutely I would. As
pointed out, I was corrected that the Board of Ethics would be the place to go for that.
I would not want to jeopardize my service on the Board by making a misstep in that
way. I think right now the department has its protocols in place. I do not know that
the Board would be involved in any changes of that type, but absolutely. At any point
where it looked like there might be a potential conflict, I would bring that up and
have a ruling by the Board of Ethics.
Councilmember Hooser: Okay. Sometimes there is no real conflict, but
there might be a perception of conflict. I would hope that given the situation in the
community, the sensitivity of the topic, and the importance of keeping our water, that
we would err on the side of caution when it comes to these kinds of situations. Did
you seek out the position or did the Mayor seek you out?
Ms. Tokioka: The Mayor sought me out.
Councilmember Hooser: Okay.
Ms. Tokioka: He did, yes.
Councilmember Hooser: Great. Thank you very much.
Council Chair Rapozo: Thank you. Councilmember Yukimura.
Councilmember Yukimura: Does Syngenta lease land from Grove Farm
Company, LLC?
COUNCIL MEETING 7 JULY 6, 2016
Ms. Tokioka: Currently we do, yes.
Councilmember Yukimura: Okay. Thank you.
Council Chair Rapozo: Are there any other questions? If not, thank
you very much, Beth.
Ms. Tokioka: Thank you.
Council Chair Rapozo: With that, can we have the next item, please?
CONSENT CALENDAR:
C 2016-148 Communication (06/22/2016) from the Director of Finance,
transmitting for Council information, the Period 11 Financial Reports — Detailed
Budget Report, Statement of Revenues (Estimated and Actual), Statement of
Expenditures and Encumbrances, and Revenue Report as of May 31, 2016, pursuant
to Section 21 of Ordinance No. B-2015-796, relating to the Operating Budget of the
County of Kaua`i for the Fiscal Year 2015-2016: Councilmember Kagawa moved to
receive C 2016-148 for the record, seconded by Councilmember Kuali`i, and
unanimously carried.
Council Chair Rapozo: Motion carried. Next item, please.
COMMUNICATIONS:
C 2016-149 Communication (06/02/2016) from the Executive on Aging,
requesting Council approval to receive, expend State funds, and indemnify the State
Executive Office on Aging for the award of Kupuna Care funds in the amount of
$754,679.00 to the County of Kaua`i, Agency on Elderly Affairs, which will be used
for the provision of the following Kupuna Care services:
• Adult Day Care — $70,000
• Case Management — $75,000
• Home Delivered Meals — $261,248
• Transportation — $135,000
• Homemaker — $70,000
• Personal Care — $70,000
• Elder Abuse — $22,610
• Kupuna Care Admin. Cost — $50,821
Councilmember Kaneshiro moved to approve C 2016-149, seconded by
Councilmember Kuali`i.
Council Chair Rapozo: Is there any discussion or public testimony?
Councilmember Kagawa: I have a question.
Council Chair Rapozo: Go ahead.
Councilmember Kagawa: My question is, is the Agency on Elderly
Affairs here?
COUNCIL MEETING 8 JULY 6, 2016
Council Chair Rapozo: It does not look like they are here.
Councilmember Kagawa: I just had a question on the home delivered
meals. Did that enable us to keep the services that we have or did it expand? I know
at one time we cut the weekends, I believe. I was wondering whether this funding
would get us back to where we were prior to cutting some services.
Council Chair Rapozo: We can send that over.
Councilmember Kagawa: Yes.
Council Chair Rapozo: It is a recurring grant.
Councilmember Kagawa: I have no problems approving it. I just had a
question. We can get that answered later.
Council Chair Rapozo: That is a good question. I know the Council,
in the past, had subsidized or supplemented the Meals on Wheels Program so that
we would not have a loss of service. Staff, if we could have that sent over.
Councilmember Kagawa: Yes, because I believe that as announced in
The Garden Island article from State Legislature, they announced that a lot more
money came to Kaua`i in this year than the previous year. I was wondering was some
of that increase funded for items like this where services were cut. I hope that
perhaps some of the increased funding that we got from the legislature went to
something like this that I feel is really needed.
Council Chair Rapozo: I agree with that. We will send that over. If
we need a briefing from the Agency on Elderly Affairs, we can do that at a later date
in the Committee. Is there any further discussion?
The motion to approve C 2016-149 was then put, and unanimously carried.
Council Chair Rapozo: Motion carried. Next item, please.
C 2016-150 Communication (06/06/2016) from the Fire Chief, requesting
Council approval to accept a donation valued at $3,200 from the State of Hawai`i,
Department of Health, for the expansion of the Kaua`i Fire Department's Home
Safety Assessment for Fall Prevention Program, to assist in continuing to conduct
in-home visits and the installation of prevention devices for the county's most
vulnerable seniors: Councilmember Kuali`i moved to approve C 2016-150 with
thank-you letter to follow, seconded by Councilmember Chock.
Council Chair Rapozo: Is there any discussion? Is there any public
testimony?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
COUNCIL MEETING 9 JULY 6, 2016
The motion to approve C 2016-150 with thank-you letter to follow was then
put, and unanimously carried.
Council Chair Rapozo: Motion carried. Next item, please.
C 2016-151 Communication (06/07/2016) from the Chief of Police, requesting
Council approval to accept and utilize a vehicle acquired through the Asset Forfeiture
Program, which will replace a previously disposed of vehicle, a gray Honda Odyssey
Van, Vehicle Identification Number (VIN) #2HKRL1856YH562133, which was
assigned to the Vice Section and used for law enforcement purposes: Councilmember
Kuali`i moved to approve C 2016-151, seconded by Councilmember Kaneshiro.
Council Chair Rapozo: Is there any discussion? Is there any public
testimony?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
The motion to approve C 2016-151 was then put, and unanimously carried.
Council Chair Rapozo: Motion carried. Next item, please.
C 2016-152 Communication (06/23/2016) from the Prosecuting Attorney,
requesting Council approval to apply for, receive, and expend Federal funds, in the
amount of $130,100.00, from the Edward J. Byrne Memorial Justice Assistance
Grant (JAG) — Drug Nuisance Abatement Unit (DNAU) Fiscal Year 2015 application
to be used towards funding one (1) full-time equivalent (FTE) Special Investigator
and one (1) full-time equivalent (FTE) Legal Clerk I to investigate and process Drug
Nuisance Abatement cases in our community, purchase office supplies, two (2)
computers, two (2) desks, and two (2) licenses for the Justware Software program.
The grant period will commence on January 1, 2017 and runs through
December 31, 2017: Councilmember Kuali`i moved to approve C 2016-152, seconded
by Councilmember Kaneshiro.
Council Chair Rapozo: Is there any discussion?
Councilmember Kagawa: I have a question.
Council Chair Rapozo: Okay. With that, Mr. Kollar, could you come
up?
There being no objections, the rules were suspended.
JUSTIN F. KOLLAR, Prosecuting Attorney: Good morning. Justin
Kollar, Prosecuting Attorney, for the record.
Councilmember Kagawa: I just wanted you to define what the Drug
Nuisance Abatement Unit is so that the public and I know what it is.
COUNCIL MEETING 10 JULY 6, 2016
Mr. Kollar: Basically, part 5 of the Chapter 12 of the
Hawai`i Revised Statutes provides a pretty robust process by which the Prosecuting
Attorney or any citizen really, actually can go into court and seek a civil injunction to
basically shut down drug houses in the community. It is a civil process. The
Department of the Attorney General does have a unit similar to this. They have not
been active on Kaua`i that I know of. I know these cases have been handled
successfully. They have done a few on the Big Island and gotten some good results.
Basically, you go in and get an injunction, you can shut down a drug house, and
basically kick the people out of house. We are still getting a lot of complaints from
the community about these houses. So we are looking to get some resources to go in
and kind of approach that.
Councilmember Kagawa: I have a follow-up because I know that of a
couple of cases where the drug houses were renters and the owner did not know what
was happening there. Does that help you help with some of these type of cases?
Mr. Kollar: Yes, because as part of the process we would
be able to go to the owners and say, "Listen, this is what we know is going on at the
house and this is what we are prepared to take to court. So either you address the
situation or we will address the situation."
Councilmember Kagawa: Thank you. Thank you, Council Chair
Rapozo.
Council Chair Rapozo: Thank you very much. Councilmember
Kaneshiro.
Councilmember Kaneshiro: Is this grant for two (2) new positions?
Mr. Kollar: Yes. Pardon me, there is a typographical
error on page 2. It says "Special Prosecuting Attorney." We are actually looking for
a Special Investigator and a Clerk just to process the paperwork.
Councilmember Kaneshiro: Obviously the money is not guaranteed
recurring, right?
Mr. Kollar: Correct. Typically when they fund projects
like this, it is for a maximum of four (4) years. If the program ends, the position ends.
That is how it has worked in past with other grants. By attrition, there is another
spot that opens up that we can move them into or it goes away.
Councilmember Kaneshiro: Okay, that was going to be my question. What
happens at the end of the grant? Thank you.
Council Chair Rapozo: Is this position a contract position?
Mr. Kollar: Correct.
Council Chair Rapozo: It will not be a civil service position?
Mr. Kollar: These would be most likely one (1) year
contracts, yes.
COUNCIL MEETING 11 JULY 6, 2016
Council Chair Rapozo: Most likely?
Mr. Kollar: Or eighty-nine (89) day contract hires.
Council Chair Rapozo: Okay. This is not going to be a new position?
Mr. Kollar: Correct. We are not getting the County into
any permanent commitments as far as resources.
Council Chair Rapozo: Thank you very much.
Mr. Kollar: Thank you.
Council Chair Rapozo: Anyone in the audience wishing to testify?
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
Council Chair Rapozo: Is there further discussion?
The motion to approve C 2016-152 was then put, and unanimously carried.
Council Chair Rapozo: Next item please.
CLAIMS:
C 2016-153 Communication (06/06/2016) from the County Clerk,
transmitting a claim filed against the County of Kaua`i by State Farm Insurance, as
subrogee of Craig Haruki, for damage to his vehicle, pursuant to Section 23.06,
Charter of the County of Kauai.
C 2016-154 Communication (06/13/2016) from the County Clerk,
transmitting a claim filed against the County of Kaua`i by Tyra-lynn Constantino, for
damage to her vehicle, pursuant to Section 23.06, Charter of the County of Kaua`i.
C 2016-155 Communication (06/16/2016) from the County Clerk,
transmitting a claim filed against the County of Kaua`i by Jody and Erika Valente,
for damages to their vehicle and reimbursement of car rental fees, pursuant to
Section 23.06, Charter of the County of Kaua`i.
Councilmember Kuali`i moved to refer C 2016-153, C 2016-154, and C 2016-155
to the County Attorney's Office for disposition and/or report back to the
Council, seconded by Councilmember Yukimura.
Council Chair Rapozo: Is there any discussion? Is there any public
testimony?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
COUNCIL MEETING 12 JULY 6, 2016
The motion to refer C 2016-153, C 2016-154, and C 2016-155 to the County
Attorney's Office for disposition and/or report back to the Council was then put,
and unanimously carried.
Council Chair Rapozo: Motion carried. Next item, please.
COMMITTEE REPORTS:
BUDGET & FINANCE COMMITTEE:
A report (No. CR-BF 2016-20) submitted by the Budget & Finance Committee,
recommending that the following by Approved as Amended on second and final
reading:
"Bill No. 2633 — A BILL FOR AN ORDINANCE AMENDING
CHAPTER 5A, SECTION 5A-11A.1, KAUAI COUNTY CODE 1987, AS
AMENDED, RELATING TO THE BENEFICIAL TAX RATE FOR PROPERTY
USED FOR LONG-TERM AFFORDABLE RENTAL,"
Councilmember Kuali`i moved for approval of the report, seconded by
Councilmember Kaneshiro.
Council Chair Rapozo: Is there any discussion or public testimony?
There being no objections, the rules were suspended to take public testimony.
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
The motion for approval of the report was then put, and unanimously carried.
Council Chair Rapozo: Next item.
COMMITTEE OF THE WHOLE:
A report (No. CR-COW 2016-07) submitted by the Committee of the Whole,
recommending that the following be Received for the Record:
"COW 2016-02 Communication (06/16/2016) from Council Chair Rapozo,
requesting the presence of the Acting County Engineer, to provide a briefing
on the Notice of Violation and Order (NOVO) from the State of Hawaii
Department of Health, Clean Water Branch for National Pollutant Discharge
Elimination System (NPDES) Permit related violations and penalties at
four (4) refuse transfer stations,"
Councilmember Kuali`i moved for approval of the report, seconded by
Councilmember Kaneshiro.
Council Chair Rapozo: Is there any discussion? Is there any public
testimony?
There being no objections, the rules were suspended to take public testimony.
COUNCIL MEETING 13 JULY 6, 2016
There being no one present to provide testimony, the meeting was called back
to order, and proceeded as follows:
The motion for approval of the report was then put, and unanimously carried.
Council Chair Rapozo: Motion carried. Next item, please.
BILLS FOR SECOND READING:
Bill No. 2627, Draft 1 — A BILL FOR AN ORDINANCE TO AMEND
CHAPTER 10, KAUAI COUNTY CODE 1987, AS AMENDED, BY ADDING A NEW
ARTICLE 5B, RELATING TO THE LIHU`E PLANNING DISTRICT (County of
Kaua`i, Applicant): Councilmember Hooser moved for adoption of Bill No. 2627,
Draft 1, on second and final reading, and that it be transmitted to the Mayor for his
approval, seconded by Councilmember Kuali`i.
Council Chair Rapozo: Is there any discussion? Councilmember
Kagawa.
Councilmember Kagawa: Is the motion to approve?
Council Chair Rapozo: That was the motion.
Councilmember Kagawa: I have some questions for the Department of
Planning.
Council Chair Rapozo: Is the Department of Planning here?
Councilmember Kagawa: I never got my answer as to how many houses
are in the Lihu`e district, particularly I wanted the breakdown from Hanama`ulu and
Puhi. How many illegal structures were going to be grandfathered or allowed to be
grandfathered by approval of this Bill? Again, I never got the number. I know they
said we can have an estimate and I want to know what estimate is because I do not
think it is prudent of this Council to approve a bill to legitimize illegal activity. If the
number is large, I think we should be cautious and do more due diligence to make
sure that we know exactly what we are approving. I think it sets bad precedence and
personally, I feel like if we are going to approve something like this knowing there
are large numbers, then why are we being so strict with small numbers of Bed &
Breakfasts (B&Bs) and Transient Vacation Rentals (TVRs) or what have you? We
are going to be strict in one (1) area and be lax in another area. I really do not
understand that type of logic. Again, I want to have those questions answered before
we approve this Bill.
Council Chair Rapozo: Thank you. Councilmember Yukimura and
then Councilmember Hooser.
Councilmember Yukimura: Well first of all, we cannot pass this without
having the Department of Planning in the room.
Council Chair Rapozo: I agree. I do not know where they are at.
Maybe they forgot today was Wednesday or maybe too much Fourth of July, but this
is the frustration, again. It is a Wednesday. It is 9:00 a.m. It is not like it is 3:00 p.m.,
COUNCIL MEETING 14 JULY 6, 2016
4:00 p.m., or 5:00 p.m. We should have the representatives of the departments here.
They have the agenda six (6) days in advance like everybody else. The public comes
out. This is a major Bill. I share your concerns in addition to the concern that we
only limiting this so-called benefit to one (1) area and not the west side or anybody
else.Anyway, I agree, Councilmember Yukimura. We definitely need the Department
of Planning here. We will finish up with comments and then we are going to recess
until they show up.
Councilmember Yukimura: I also want to say that thanks to our staff,
Yvette did some really good research for me and I sent it to all of you last night. What
it is showing me is that none of the jurisdictions have given waivers of development
fees except where there is an assurance that the unit will be affordable. I understand
that the Department of Water just passed rules for giving breaks, but I do not think
there is any tie to affordability. We need to know exactly what the Department of
Water has done and what their rules are. Also, with respect to what Councilmember
Kagawa has said about grandfathering, one (1) of the jurisdictions in this research
did an amnesty program, which helped illegal units become legal, but with certain
very important guidelines to ensure that we were not just "okaying" any and
everything. There was a very well-structured way for units to become legal and to
add to the affordable housing inventory. I think that is worthy of more research
because I do not have the assurance that the present Bill has actually thought
through all of the things that need to be thought through about that amnesty piece.
I think we need to always research what other places have done so we do not reinvent
the wheel and repeat mistakes that we could have avoided. I would like to have the
Department of Planning look at all of this information and at minimum, be able to
explain to us how things are going to work without unintended consequences.
Council Chair Rapozo: Councilmember Hooser.
Councilmember Hooser: I certainly think we should hear from the
Department of Planning because they are the authority on this. But it is my
understanding that the Bill as-written, does not grandfather anything in in terms of
illegal units. It is my understanding the Bill as-written, allows people to come in and
apply for after-the-fact permits. It does not grandfather or legalize anything at all.
That is certainly what my understanding is. If that is incorrect, the Department of
Planning can point that out and we can make appropriate amendments. I would be
remised if I did not remind us all that we have been talking about this Bill for several
months now, I believe. We have an urgent housing crisis and I believe this is a
reasonable proposal aside from incentives, which is a separate issue. I think we
should deal with those issues in a responsible manner, but the core of this measure
merely provides options, affordable housing options and rental options, for people to
either let their family members rent, or use a legal unit on their property, or rent one
out. I think it is important that we have this discussion and hopefully approve and
vote this out. Thank you.
Council Chair Rapozo: Well, I am not sure what the wishes of this
body is today. If we are looking at exploring what you are talking about and what
Councilmember Yukimura is talking about, then my suggestion is that we send this
back to the Committee because I really do not want to waste any time in the Council
Meeting to do the Committee work. The Department of Planning is not even here
and I think it is important to understand that this Bill was a request from the
Administration. It was not a request of the Council. It came to us, Councilmember
COUNCIL MEETING 15 JULY 6, 2016
Chock and Councilmember Hooser introduced it at the request of the Administration,
and they are not here today. If there is going to be a lot of work to be done, if there
is an amendment or two (2), that is fine. We can do that today. But if there is going
to be an intense discussion and numbers that the Department of Planning is not
prepared to present, then my suggestion is that it would go back to the Committee.
Councilmember Chock and then Councilmember Kagawa.
Councilmember Chock: Thank you, Council Chair Rapozo. I think we
do need the Department of Planning here to answer a few questions. The big question
for me is whether or not it goes back to Committee is where some of the opportunities
that Councilmember Yukimura is talking about should rest. Should it be in this
existing Bill in what is being called an "incentive bill" that is forthcoming, or in
another section? That is where we need that input from the Department of Planning
in terms of how it is that we want to ensure that what we are creating here or what
we are passing here will be addressed subsequently. There they are.
Council Chair Rapozo: The Department of Planning is here. Is there
any other discussion before I call up the Department of Planning? Councilmember
Kagawa and then Councilmember Yukimura.
Councilmember Kagawa: Based on what several Councilmembers
talked about, my concern is yes, there is an affordable housing crisis, but does the
affordable housing crisis allow you to do whatever you want on your property because
you have an affordable housing need personally? I mean, we have had Additional
Dwelling Unit (ADU) laws on the books for fifty (50) years or what have you that say
if you have a lot of ten thousand (10,000) square feet or more, you can put an
additional dwelling on your property. If you knew that way back from the 1970s that
you need housing for your family, you make sure that you have a lot ten
thousand (10,000) square feet or greater and then you can put that additional
dwelling. What this Bill does for the Lihu`e district is it throws away that law. That
law no longer applies and you can basically put a house on anything that you want
that is larger than five thousand (5,000) square feet. I am concerned that we are
making such a drastic change and we are not doing enough due diligence to make
sure that this huge decision is being vetted properly and we know all of the facts and
numbers before we push it out. I do not think this is something that we should just
be pushing out just because we have a blanket affordable housing problem. I seriously
believe that there are major concerns with the long-term ramifications of passing this
Bill, and I think the Department of Planning said there were two thousand one
hundred twenty-nine (2,129) lots within the Lihu`e district that could potentially
qualify for the Additional Rental Unit (ARU) Bill. That does not tell me how much
are illegal and already there. They do not answer my question and he is here to
answer the question. What I am saying is we certainly have to consider the whole
island, not only Lihu`e has an affordable housing problem. There is affordable housing
problems all over the place when you talk about what kind of rents you pay in
Hanapepe, Kalaheo, Kapa`a, and on the north shore. Why is this Bill only for Lihu`e?
Why are we throwing away the ten thousand (10,000) square feet requirement only
for Lihu`e? There is certainly an affordable housing problem on this entire island and
again, this is "ready, fire, aim." I think we should stay away from "ready, fire, aim"
legislation.
Council Chair Rapozo: Councilmember Yukimura.
COUNCIL MEETING 16 JULY 6, 2016
Councilmember Yukimura: We are doing it in Lihu`e because this is the
area designated for growth and we are trying to keep compact development because
that is the cheapest way for people to live, close to services. We are trying to do other
things in other areas to promote affordable housing, but the problem is that if we do
not do this Bill correctly, we will not promote affordable housing. I mean, we give
breaks and then people rent it at non-affordable prices. Is that going to help? If this
is a supply bill, you have to have a certain amount of supply all at once. If it is
seven (7) homes a year, I do not know that it is actually going to affect price. We may
need to have other restrictions or requirements that make sure it is affordable if we
give people a break and put the cost of the system on somebody else, whether it is the
ratepayers or other people. This Bill has to be crafted carefully. I am guessing that
at minimum, the Department of Planning will have researched everything so they
can answer our questions. Now, I have before me, a rule that was proposed at the
Department of Water, I believe by the Planning Director. We need to know what that
rule is and how it interacts with what we are doing here. Looking at what I think is
the rule, I am not clear that it is really well-integrated or coordinated. I have a lot of
questions. I would really feel more comfortable if at the end of our discussion, we
send it back to Committee because I do not think all of the homework has been done
that needs to be done.
Council Chair Rapozo: Councilmember Chock and then
Councilmember Hooser.
Councilmember Chock: Council Chair Rapozo, there are a lot of
questions on the table, let us move towards getting the Department of Planning up
here and represented because we can go around and around in circles with what it is
that we think, but what it is that we need to know lies within their department.
Thank you.
Council Chair Rapozo: Councilmember Hooser.
Councilmember Hooser: I will be brief. This measure is about creating
additional opportunities. I agree with Councilmember Chock that if we are going to
provide incentives or breaks on fees, water sewer, and whatnot, that is an entirely
another discussion that should be addressed in another bill shortly after this is
passed, but even without those incentives, this measure, if passed, creates an
opportunity for significant new inventory. Councilmember Kagawa said, "Why only
Lihu`e?" Well, because Lihu`e is where the General Plan/community plan says
increased density should go. Lihu`e is the place that has sewer. Lihu`e is a place
where we are investing significant sums of the money to build walkable communities
and if it works like it is supposed to work in this area and we want to consider
expanding it to other areas, let us have that discussion rather than just do it all over
everywhere one time. Lihu`e is the place it should be. That is the reason that this
measure is proposed for this area. It is not accurate to say that this measure gets rid
of the ADU law. That is an incorrect statement. It does not. The ADU law still stays
in effect. This measure is in addition to that. If you have an ADU on your property,
you are allowed to Condominium Property Regime (CPR) it. You could subdivide it
out. You could sell it to somebody else. You could build a mega mansion on that ADU
and not what we are proposing here, not with the Additional Rental Unit. There are
strict guidelines governing the size of these units and restrictions against selling it
or CPR it. It is an entirely different animal. It has the opportunity to significantly
add inventory at no cost to the County. We can talk it to death, we can ask all kinds
COUNCIL MEETING 17 JULY 6, 2016
of questions, we can talk, and it will never be perfect. I suggest that we make it a
good-faith effort, which I think we already have, listen to what the Department of
Planning has to say, and pass this out into law so owners of the properties in Lihu`e
can build small rental units for mom and dad, or for their children, or for people they
want to earn a little extra income from. Thank you.
Council Chair Rapozo: With that, I am going to suspend the rules.
Department of Planning, if you could come up. We will start with Councilmember
Kagawa who had some questions.
There being no objections, the rules were suspended.
KAAINA S. HULL, Deputy Planning Director: Good morning, Council
Chair Rapozo and Members of the Council. Deputy Planning Director Ka`aina Hull,
for the record.
Councilmember Kagawa: I am going to have the response that you sent
put up and I want you to clarify it. My question is how many illegal structures or
houses in Puhi, Hanama`ulu, and Lihu`e are estimated to be out there that could be
taken care of by passage of this Bill?
Mr. Hull: Councilmember Kagawa, there is no way that
Department can estimate that figure. We are aware that there are a large portion of
illegal rentals within the Lihu`e district as well as throughout all of the Kaua`i, but
to somewhat approximate how many could take advantage of this, in essence, they
can take advantage of the additional ability to put a kitchen sink because that is the
defining factor of when it goes into another dwelling unit when they put that
additional kitchen. There are a significant amount out there that we are aware of,
but to say that they will automatically be able to take advantage of the ARU
entitlement should it be adopted, we cannot really approximate that number because
of the fact that some of those illegal improvements that may have been made on
properties in the Lihu`e area may have also violate setback or lot coverage. There are
not much height violations out there, but in particular, setback and lot coverage. If
they are unable to meet say the fifty percent (50%) lot coverage or they exceeded it
with the illegal improvement, then they may not be able to take advantage of the
entitlement.
Councilmember Kagawa: What was the two thousand one hundred
twenty-nine (2,129) lots number made up of? Is it made up of existing permits for
single houses with lot sizes of more than three thousand five hundred (3,500) square
feet?
Mr. Hull: Essentially, we were able to use our
Geographical Information System (GIS) data to determine those lots that were over
three thousand five hundred (3,500) square feet in size and those lots that only have
one (1) dwelling unit on it because under the draft language of the Ordinance, if you
only have one (1) dwelling unit or should you have more than one (1) dwelling unit or
guesthouse on the subject property, you do not qualify for the ARU. We could
approximate that there are two thousand one hundred (2,100) lots in the Lihu`e
planning area, and that includes Puhi and Hanama`ulu, that only have one (1)
dwelling unit and could potentially take advantage of the entitlement.
COUNCIL MEETING 18 JULY 6, 2016
Councilmember Kagawa: Would this Bill supersede the existing law of
having a minimum ten thousand (10,000) square feet lot size to put an ADU on?
Mr. Hull: I would not say it supersedes because and
ADU and ARU are two (2) different entities. An ADU, you can construct it to be any
square footage as well as you can sell that ADU off. This is just of a different type of
entitlement. It would allow an ARU on lots under ten thousand (10,000) square feet
in size and additionally just to note that if there is an ADU on the lot, that lot will
not qualify for an ARU.
Councilmember Kagawa: And some ARUs are ADUs, right? Some
ARUs will become ADUs if it is separate from existing structure, right?
Mr. Hull: Well, if they...
Councilmember Kagawa: It can either be attached to the existing home
or it can be separate, right?
Mr. Hull: It can be separate, but the defining
characteristic between should this draft ordinance be adopted, would be that an ARU
could never be CPRed and sold off, but an ADU can be CPRed off.
Councilmember Kagawa: But you are talking about the CPR law. I am
not talking about that. I am saying it can be a separate additional dwelling unit.
Mr. Hull: It can be separate and they would function in
essence, if it was under eight hundred (800) square feet in size and on a property,
they would look identical. An ADU eight hundred (800) square feet or smaller and
an ARU eight hundred (800) square feet or smaller in size and in use would look
absolutely identical. The only difference between the two (2) would be that there will
be a prohibition on CPRing one from the other.
Councilmember Kagawa: For a lot of three thousand five
hundred (3,500) square feet, you can put an additional four hundred (400) square feet
floor area. Obviously, A lot of those would still need to meet the fifty percent (50%)
lot coverage requirement, and lot coverage includes any pavement for sidewalks and
driveways?
Mr. Hull: Correct, any impervious surface.
Councilmember Kagawa: A lot of those would be upstairs or whatever?
Mr. Hull: Yes.
Councilmember Kagawa: A three thousand five hundred (3,500) square
feet lot is small.
Mr. Hull: Yes. The Department has spoken on that
previously here. The vast majority we anticipate that come online because a lot of
the lots have come close to their lot coverage maximum, we anticipate if anybody is
taking advantage of it, it will be occurring within the existing structure and/or a
second story. In our discussions with contractors, a lot of them anticipated that just
COUNCIL MEETING 19 JULY 6, 2016
because of the cost of doing a second level on an existing structure is extremely
expensive, more than likely they anticipate that the bulk of the clientele will be
coming in for single story converting a bedroom or two (2) into an ARU.
Councilmember Kagawa: Let us explain two (2) scenarios. One (1)
scenario where a person has a single house on three thousand five hundred (3,500)
square feet lot and he wants to do a four hundred (400) square feet ARU. What is the
requirement for water? Will they have to pay for an additional new waterline for
that?
Mr. Hull: That person would not have to necessarily put
in a new water line. He or she would be required to apply for the additional meter
and the FRC costs. They can actually sync them into a single meter, but the FRC
cost, the Facilities Reserve Charge cost, would still be implemented as we understand
it.
Councilmember Kagawa: Okay.
Mr. Hull: If the unit is attached or within the existing
structure, that current rate is approximately nine thousand eight hundred
dollars ($9,800). If it is a separate unit, it is approximately fifteen thousand
dollars ($15,000), I believe.
Councilmember Kagawa: What would be the water charge for an
existing house that is illegal that already has everything hooked up, they are all
hooked up to one (1) meter line for twenty (20) or thirty (30) years? Would they be
required to pay additional water charges?
Mr. Hull: If they applied to come into conformance, yes,
my understanding is that they would still have to pay the additional FRC rate.
Councilmember Kagawa: Do you think they will come in?
Mr. Hull: It depends, quite frankly. Is there much
impetus for folks to come into compliance just as they exist? No, not really. Without
the Department of Planning out there and the Department of Water actively
enforcing and trying to shut down these illegal rental operations, there is not much
impetus for these folks to come into compliance, quite frankly. However, a lot of times
when say there is an exchange of the property and it goes through the checks that
should happen during the sale of the property where it should be brought into
conformance, a lot of times, that is when we see structures come into conformance
when the transaction happens. You are right, Councilmember Kagawa. We do not
anticipate a race to the door for people currently with illegal structures to come and
get into conformance.
Councilmember Kagawa: How would you normally identify illegal
structures? Would it be based from a neighbor complaint?
Mr. Hull: Yes. The enforcement that we have for overall
zoning enforcement is all complaint-driven. The only enforcement team that we have
that actually actively investigates is the team going after illegal transient
accommodations. We have one (1) inspector for the entire island for zoning
COUNCIL MEETING 20 JULY 6, 2016
compliance outside of the transient accommodation issue that just operations on
complaint-based.
Councilmember Kagawa: I will give you a scenario. You have a
complaint saying there are multiple families living there, your inspector goes and
says "This is illegal." What is the next step? Is the homeowner able to remove the
kitchen appliance and comply?
Mr. Hull: Under Hawai`i Revised Statutes, the
Department of Planning does not have immediate authority to issue fines or forward
it to the Office of the Prosecuting Attorney. Our initial action has to be an action to
get towards compliance. We meet with the property owner to explain exactly what
needs to be done to bring the property into compliance. Say in many situations it is
just the removal of the kitchen, then we instruct them that they have x amount of
time to remove that kitchen. If they are able to remove it in that allotted time, then
we issue a compliance notice. If they fail to remove it in a timely manner, then we
bump it up to the fining action and possibly forwarding it over to the Office of the
Prosecuting Attorney.
Councilmember Kagawa: What if the next day when you folks are gone,
they put it back? What happens then?
Mr. Hull: We play that cat-and-mouse game again.
Councilmember Kagawa: Thank you. Thank you, Council Chair
Rapozo.
Council Chair Rapozo: Councilmember Chock.
Councilmember Chock: Thank you. Ka`aina, is this Bill meant to be
an enforcement tool for Hanamd'ulu, and regarding the concerns that are being
expressed, what is the Department's response or interest? How are they move
forward on some of the concerns of getting people to comply?
Mr. Hull: This is not an enforcement action per se. It
does afford the opportunity for some, if not many, people that currently have illegal
dwellings on their property to come into compliance. As I mentioned to
Councilmember Kagawa earlier, there may be other issues that do not allow for them
to come into compliance because they might be violating other sections of the Code. I
think there is an honest attempt to acknowledge the fact there are illegal dwellings
out there. There are a lot. It is on the black market, but that black market is quite
frankly addressing a dire need here on Kaua`i with housing. They are. If there is a
way that we can simultaneously allow them to address that need while allowing them
to bring them into compliance, the Bill is an opportunity to do that. Above and beyond
that though, are we going to be knocking on doors and informing them of this? Quite
frankly, we do not have the time or resources for that.
Councilmember Kagawa: I know there are a lot of questions about the
flipside of what this Bill really is intended for, and that is to take some progressive
steps forward in trying to get some housing together. Along that, we have not had a
whole lot of discussion and I am not sure what our limitations are here today about
the incentive package. I think that is where, for the Councilmembers to have a
COUNCIL MEETING 21 JULY 6, 2016
broader picture of how we intend to be successful. I think it is connected to this Bill
and needs to be explained to some degree. I was hoping that you might be able to
shed some light on that for everyone.
Mr. Hull: The Bill ultimately is a zoning entitlement
that allows for opportunity. As we are learning with other zoning entitlements that
we have given to other areas, say the Lihu`e town core area as we are looking with
the South Kaua`i Plan, zoning is not an end all to be all. Just because you give that
entitlement does not mean that the property owners are going to come forward and
provide this service or use. But in some situations, you need to reduce additional
barriers to entry. First and foremost, you need to reduce the prohibition on allowing
it. First, we need to allow that opportunity. We are looking at the incentive package.
In particular, the draft bill you folks have before you is very similar to the O`ahu bill.
We looked at the O`ahu bill seeing that it had the potential to provide a much needed
supply for housing. But even when we first looked at O`ahu bill, we saw that it was
so rife with overly burdensome regulations that we anticipated not much coming
online. So when looked at it, we really pared down the Oahu regulations to make it
as easily as possible for people to apply for these types of uses and move forward. As
of recent, the O`ahu Administration has recognized that their ADU/ARU Ordinance
is not bringing in as much as they anticipated and recognize that there are a lot of
barriers to entry on their bill, and that they need possible incentives or a reduction
of infrastructure fees. That is what their Council is actually entertaining right now.
Like I said, we have pared this one down on the onset just to not be overly burdensome
as regulation, but we also recognize that there may be a need to look at a reduction
in fees. The potential of the Administration also submitting to the Council an
incentive package, I said it previously. We have spoken with the Wastewater Division
and those properties that are in the vicinity to the County's wastewater lines, the
Wastewater Division is willing to waive their hook-up fees, their equivalent to the
FRC, which is roughly three thousand dollars ($3,000) or four thousand
dollars ($4,000). We also recognize that the Department of Water's FRC is probably
the most cost prohibitive as far as infrastructure and fees are concerned. So we are
working with the Board of Water Supply to see if we can reduce those fees. That still
remains up in the air. It would be our intention if we could, to submit something as
an incentive package, that it comes simultaneously so that there is not much
confusion or back lay. That is why we have not introduced the wastewater reduction
in fees because we have hope that we might be able to simultaneously pair it with a
reduction in water fees to the water FRC, but that remains to be seen. I really
appreciate Councilmember Kuali`i's amendment where it somewhat pushes the date
that the ordinance goes into effect to afford us time to possibly get that package
together. If we cannot get the FRC through the Board of Water Supply, the reduction
of the fees, then we may anticipate just coming here with a sewer hook-up reduction
in fees, but at this time, we have hope.
Council Chair Rapozo: Actually, I have a follow-up as far as the fees
because I think that is what the reality is in this. Let us just use the eight
hundred (800) square feet units on five thousand (5,000) square feet lots. What would
the County fees be as far as building, planning, and whatever fees? What would that
be? I am not talking about water or other fees.
Mr. Hull: Just the other fees aside, you are only looking
at the building permit fee and zoning permit fee. The zoning permit fee is thirty-five
dollars ($35).
COUNCIL MEETING 22 JULY 6, 2016
Council Chair Rapozo: Okay.
Mr. Hull: The building permit fee would range on what
they are actually proposing interior-wise and what it looks like, but as I understand
it, it could range anywhere from four hundred dollars ($400) to two thousand
dollars ($2,000). It just depends on the assessment that the Building Division does.
Council Chair Rapozo: Okay, let us go there first then. The
construction of an eight hundred (800) square feet dwelling today. I do not know
what the construction costs. What is it? A couple hundred dollars a square foot?
Mr. Hull: Actually, at the last Council Meeting, we
submitted a rendering that had a cost analyses of all of the costs. I think we came
out that it depended on if it was self-built or...
Council Chair Rapozo: I am not talking about self-built.
Mr. Hull: Or if a contractor was doing it. Sorry I did not
bring that with me, but I believe we had the broken down to self-built was sixty
thousand dollars ($60,000) and contractor was eighty thousand dollars ($80,000).
Sorry, I did not bring that with me.
Council Chair Rapozo: Eighty thousand dollars ($80,000) for an eight
hundred (800) square feet house?
Mr. Hull: It was eighty thousand dollars ($80,000) or
one hundred thousand dollars ($100,000). Sorry Council Chair Rapozo. If it is done
within an existing structure, it was the conversion...
Council Chair Rapozo: No, I am not talking about that. Okay. Your
whole purpose of the Bill, number one, it is not an amnesty bill, right? This Bill was
not created because you wanted to get all of the illegals to become legal, right?
Mr. Hull: It could serve some of that purpose.
Council Chair Rapozo: Let me just read what the purpose of the Bill
is. It says, "The purpose of this Ordinance is to encourage and accommodate the
construction of additional rental units and to increase the number of affordable rental
units in the Lihu`e Planning District..." That is the purpose. The purpose has
morphed now, but the original purpose as I remember, was that we wanted people
who had the lot size. That is why the lot size was specifically delineated. We wanted
people to have an opportunity to go out and build an extra unit on their property and
hold them to rent it to affordable housing. That is what I thought the purpose was.
Now it is this whole, yes, the illegals can become legal if they come in and they agree
to certain things. At the end of the day, I guess my point is how reasonable or how
feasible is it for someone to go and build an eight hundred (800) square feet unit,
remember they have to have the parking and water, fourteen thousand
dollars ($14,000) or fifteen thousand dollars ($15,000)? Then to be able to turn that
and rent it as an affordable rental. Really, I am just trying to be real.
Mr. Hull: I apologize. I do not have that handout for you
today. Like I said, the ability to build it was coming out to sixty thousand
COUNCIL MEETING 23 JULY 6, 2016
dollars ($60,000) to eighty thousand dollars ($80,000) within the existing...I want to
say it was one hundred thousand dollars ($100,000) to one hundred twenty-four
thousand dollars ($124,000) as a separate unit.
Council Chair Rapozo: Yes, I figure to construct a house right now is
probably one hundred fifty dollars ($150) to two hundred dollars ($200) a square foot
if I went to a contractor. That is probably what it costs here on Kaua`i. At eight
hundred (800) square feet, that is one hundred sixty thousand dollars ($160,000)just
for the house. It is not counting the furniture. It is definitely not counting the water.
You add another fifteen thousand dollars ($15,000) to that. I am just trying to be real
and I think what Honolulu is finding out is "wow, we do not have many takers." Of
course we do not have many takers. If I am going to dump two hundred thousand
dollars ($200,000) into an eight (800) square feet unit on my parcel, I am not going
rent it out for one thousand dollars ($1,000) or nine hundred dollars ($900) a month.
That does not even cover the mortgage. So I just want us to understand and be real
about this.
Mr. Hull: Council Chair Rapozo, like I said, we said that
from the very beginning. In no way, shape, or form do we anticipate this being a
panacea to our housing crisis. I think you mentioned it before. At best, this is a
Band-Aid. I would agree with that sentiment. At best, this is a Band-Aid. It is
merely trying to look at providing that opportunity should somebody want to take
advantage of it. Do we anticipate a whole slew of ARU applications? Quite frankly,
no.
Council Chair Rapozo: Right. At the end of the day, how impactful
will this be on affordable housing? We are talking about the Lihu`e area alone and
yet, there are some lots that accommodate, more than five thousand (5,000) square
feet lots, out on west side. There are a lot of those lots, but they are not able to use
this. I interrupted Councilmember Chock, so I wanted Councilmember Chock to
finish up his questioning and then we will go to Councilmember Yukimura. Do you
have a follow-up on that specific line? Councilmember Yukimura.
Councilmember Yukimura: I think there are a lot of families that would
spend one hundred sixty thousand dollars ($160,000) or one hundred eighty thousand
dollars ($180,000) to help their son or daughter who has returned home to get started,
or to create a place for a granny flat. I think there are, considering that you would
have to spend three hundred thousand dollars ($300,000) to build a single-family
house somewhere on a separate lot. I just wanted to say that.
Council Chair Rapozo: I would just say that if that was the case, we
would have a lot of people taking advantage of the current ADU law. We would have
a lot of people using the existing ADU law with lots over ten thousand (10,000) square
feet, building the structures for their kids. It is not happening because it is too
expensive. I think you have to understand that majority of the people on this island
do not have the ability to go out and get a loan for one hundred sixty thousand
dollars ($160,000). I think that is where some people think we live in this area that
yes, maybe some people can go to the bank, sign a mortgage application, and get one
hundred sixty thousand dollars ($160,000) or two hundred thousand
dollars ($200,000). There are a lot of people, and I am one of them, that I am upside
down on my mortgage. I do not have any equity. I do not have a boat, or motorcycles,
or toys. It is just life. That is what it is on this island. It is not just where we can go
COUNCIL MEETING 24 JULY 6, 2016
down to the bank, go get two hundred thousand dollars ($200,000), build a structure,
and rent it for less than my mortgage because I want do the right thing. If that were
the case, like I said, the ADU law would be used way more and it is not.
Councilmember Chock.
Councilmember Chock: Thank you, Council Chair Rapozo. I have
Ka`aina's assessment or cost analysis here. A self-build is at forty-two thousand
dollars ($42,000) and a contractor build is at sixty-one thousand dollars ($61,000).
Definitely the FRC charges are a big concern and we are in the middle of looking at
it. I think the Board of Water Supply is having these discussions as we speak. I have
a copy of the May 17th, I guess this is the discussion on the proposed rule changes
that do try and address this. These are not final, but they are looking at how it is we
can move single-family homes converted to multi-family homes to be assessed at four
thousand nine hundred dollars ($4,900).
Councilmember Yukimura: We just got word that they passed.
Councilmember Chock: Okay, so they passed. These rules are passed.
I do not know if this could be circulated as well, but this is what we are talking about
as some of how we intend to try and address the big elephant in the room, which is
these infrastructure costs. Maybe we could have a copy of this, too, for others. Is that
possible?
Mr. Hull: I might also clarify, Councilmember Chock,
the handout that we handed out a couple of Council Meetings before with the
forty-one thousand dollars ($41,000) and the sixty thousand dollars ($60,000) was
specific to a rendering that we provided also that was an internal conversion of
approximately four hundred (400) to five hundred (500) square feet.
Councilmember Chock: Right. Thank you. The questions that has not
been answered, but we did bring up that I think deserves more attention is how do
we keep it in long-term affordable rent units? We did have some answers, but I
wanted you to have a chance to speak to how you see the Department supporting that
coming into the incentive bill if we were to move in that direction.
Mr. Hull: Currently, there is no affordable housing
requirement in the draft ordinance. If it is the prerogative of the Council to insert it,
that would be the prerogative of the Council. In discussions with contractors and
property owners, much of them felt very hesitant in including that and considered a
significant barrier to entry, and not at the rates that were being required though.
Many of the rates that currently are at the market-level here in Lihu`e, actually are
somewhat nominal or close to the affordable housing rate. So that was not their
objection. Their objection was that under the affordable housing lease agreement, it
requires that they have the lease of no shorter than a year, and that for them, was
somewhat of a stop-measure. They would not enter into that agreement just because
of the fact that they wanted the ability to evict tenants should there be certain bad
tenants. That is just us conveying what we got from the private side. Like I said,
we would not object should Council want to implement an affordable housing
requirement in this draft ordinance, but we just would point out that many
individuals in the public, as we held our community outreach, objected to that as a
barrier to entry and we will just leave it at that.
COUNCIL MEETING 25 JULY 6, 2016
Council Chair Rapozo: Councilmember Yukimura and then
Councilmember Hooser.
Councilmember Yukimura: On that very point, if they have a bad tenant
and they have a six (6) month agreement, would they still want to get rid of someone?
I mean, there is an onerous landlord-tenant process, I think, that does not allow you
to immediately evict. They still have that option to go through the process. Is it that
they normally do not want to go through the process, so they will just wait until the
term of the agreement is met and that is why they do not want a year? They want it
shorter?
Mr. Hull: Councilmember Yukimura, I cannot go into
further detail on that. It is just that was just expressed during our community
outreach.
Councilmember Yukimura: Yes, but it is important to understand.
Mr. Hull: We can follow-up with some of them, but there
was just, I would say a significant amount of objection and hesitancy on parts of
stakeholders that do play a role in rentals here on the island and saying that would
possibly hinder or prevent them from exercising the option of building and
constructing the ADU.
Councilmember Yukimura: Okay. Are you saying that they did not have
objection so much to the requirement that the property is rented at affordable rates?
Their main concern was requirement that it be at least a year, and so in the Bill, you
reduced it to six (6) months. Is that correct?
Mr. Hull: The only reason why the six (6) months is in
there is because technically under the Transient Vacation Rental Ordinance,
anything under six (6) months is considered a TVR. So that is why we put the six (6)
months in there.
Councilmember Yukimura: Okay. Was that the basic way you addressed
the objections that came up when you spoke to contractors and others?
Mr. Hull: No. We just did not include a requirement
that it meet the affordable housing standards under the Kaua`i County Code. That
is just not included that they rent it at those rates or at that one (1) year lease,
essentially.
Councilmember Yukimura: Okay. I am not looking at requiring any ARU
to be affordable. The question is whether the waiver of development fees, like the
Facilities Reserve Charge, would be done for all ARUs or for those that agree to agree
to be rented at affordable rates?
Mr. Hull: I think that is an important point to note. I
think should we get our incentive package before this body, that a robust amount of
discussion...
Councilmember Yukimura: But I understand that the incentive package
you put before the Board of Water Supply has been passed and they do not have that
COUNCIL MEETING 26 JULY 6, 2016
requirement. It says part 5, Section 3, paragraph 3(B)...actually, I think we need to
have a report from you or the Planning Director about this, seeing that the Planning
Director proposed this to the Board of Water Supply. It is going to impact this Bill
and we do not understand how the two (2) interrelate. At minimum, I think we would
like to get an explanation and a rationale. I also want to know from the Department
of Water who is going to pay for these waivers. If the people do not pay for their
actual cost of the system, who pays?
Mr. Hull: Yes...
Councilmember Yukimura: If they are rented at market rates rather than
affordable rates, is this good policy?
Council Chair Rapozo: The Department of Water can answer that
question as far as where that money comes from. I just wanted to clarify and
Councilmember Hooser you are next, but I wanted to ask Councilmember Yukimura,
she just said she was not concerned about these ARUs being affordable. Is that what
you said? Is that what you mean, that you do not have a problem with things being
built for market rent?
Councilmember Yukimura: Well, I said...
Council Chair Rapozo: Well, that is what you said. I just wanted to
know if that is what you meant.
Councilmember Yukimura: Yes, because that is the whole idea that
supply would help bring the price down. If we give them breaks on the development
fees, I do have problems not requiring them to be affordable.
Council Chair Rapozo: Okay. Again, I am just referring to what the
purpose of this Bill is. Obviously, if the intent is to allow ARUs to be built and have
no control over the rent, then I can tell you right now I am not supporting the Bill.
Correct me if I am wrong because it came from you folks across the street, but the
whole purpose of this was to create more units that are affordable, right?
Councilmember Yukimura: But if...
Council Chair Rapozo: Hold on, I am asking him.
Councilmember Yukimura: Sorry.
Council Chair Rapozo: Because that is his bill, not our bill.
Mr. Hull: The purpose and intent was to create more
units and essentially provide for more supply and not necessarily to meet...
Council Chair Rapozo: Okay. Again, I am going to read this again.
It says, "The purpose of this ordinance is to encourage and accommodate the
construction of additional rental units and increase the number of affordable rental
units in the Lihu`e planning district..." That is the purpose.
COUNCIL MEETING 27 JULY 6, 2016
Mr. Hull: Council Chair Rapozo, there has been a lot of
confusion. We are not specifically referencing the Affordable Housing Ordinance. In
essences, there is a difference between affordable housing as it is mandated under
Kaua`i County Code with certain lease requirements, certain homeowner status, and
rental levels. That is one (1) definition of"affordable." The version we are looking at
is affordable more by design and location. In essence, units that are on a smaller
square footage and located within the Lihu`e area are generally more affordable by
design and are aimed at a market more on the workforce side.
Council Chair Rapozo: Have you looked at Craigslist lately?
Mr. Hull: I would be in complete agreement with you
Council Chair Rapozo. The reason that Craigslist and the various rentals in the
market are so high is because there is very little supply available.
Council Chair Rapozo: Because they can. That is why they charge
that rent, because they can. What is going to drive these people to go charge the
affordable rate if there is no requirement? I do not get it. We are two
thousand (2,000) or more units behind, right?
Mr. Hull: Correct.
Council Chair Rapozo: Okay. Do you expect two thousand (2,000)
units to come and get this entitlement?
Mr. Hull: No, we do not.
Council Chair Rapozo: Okay. Again, I am just being real. I am
thinking ahead. We do not get the two thousand (2,000) to bring us where we need
to be that. So that means we are still going to have an affordable housing shortage.
That means the people are going to rent these units at the best price or the highest
price they can. That is just how things work.
Mr. Hull: We anticipate them operating this as a
business, indeed.
Council Chair Rapozo: Yes, then I am done talking.
Mr. Hull: We are not going to anticipate property
owners being philanthropic in the provision of it. As I said earlier, if the Council
decides to implement an affordable housing requirement on the draft ordinance, we
have no objection. But when we initially came with this, ultimately we were looking
at barriers to entry. We would see that as a potential barrier to entry, which is why
we did not provide it. But should the Council decide that they want to implement an
affordable housing requirement, we would have no objection.
Council Chair Rapozo: Then we need to remove the word "affordable"
from the purpose. If we are going to go down that road, let us call a spade and spade.
If we just want more units because we think that is going to impact the supply and it
is going to drive rates down, then somebody needs to do an amendment to remove the
word "affordable" so it says, "and to increase the number of rental units in the Lihu`e
planning district." Then I think it is an accurate purpose, but to say "affordable" and
COUNCIL MEETING 28 JULY 6, 2016
not address that and to say that we are just going to let them to sprout up wherever
they can if they want to and not have a restriction on the rent, please, who are trying
to fool? That is just my personal opinion and maybe I was absent at the last meeting
because I really do not recall a lot of discussion and I apologize for that. I did not
review the meeting. When I read this in preparation of today's meeting, it was very
clear to me the intent was to provide affordable units, not just units. Councilmember
Hooser has been very patient and you probably forgot what you were going to ask. I
apologize, Councilmember Hooser.
Councilmember Hooser: Thank you. How many units would be
grandfathered if this Bill passes into law?
Mr. Hull: It would be the same response I gave to
Councilmember Kagawa. We cannot anticipate that, Councilmember Hooser.
Councilmember Hooser: Will any be grandfathered at all? I thought
they would have to come in for a permit and comply.
Mr. Hull: They would have to come in and apply to get
grandfathered. So the onus is essentially on the property owner.
Councilmember Hooser: There is no automatic grandfathering is my
point. Would you say that again? There is no automatic grandfathering, is that
correct?
Mr. Hull: Yes. There is no automatic grandfathering, in
essence, if nobody applies for a permit.
Councilmember Hooser: Okay. Even if there are one thousand (1,000)
illegal units, nobody comes in, they are not automatically grandfathered? Only those
that come in and apply for an after-the-fact permit are then granted an after-the-fact
permit with conditions or whatever are going to be made legal, so to speak? Is that
correct?
Mr. Hull: Correct.
Councilmember Hooser: Okay. Thank you. I mentioned this before as
an opportunity. It is really in two (2) steps. You had mentioned that as it stands now
with the first step that is before us, there is no absolute requirement for affordability
and you used the word "Band-Aid." Maybe only a few people will come in, maybe a
lot of people will come in. We do not really know. You do not really expect anyone,
but it provides some opportunity for people who want to take advantage of it to build
these units to provide rentals for family members or others, correct?
Mr. Hull: Correct.
Councilmember Hooser: Okay. The second phase in my mind would be
the incentive package. If an incentive package was designed to require affordability
by whatever guidelines we chose to put on there; require affordability, include water,
include sewage treatment, include other planning and permitting fees, and possibly
include tax deferral on the assessment of that new improvement, is it possible that
we could provide an incentive package that would make it attractive to larger
COUNCIL MEETING 29 JULY 6, 2016
numbers to come in and build these additional units that would be required to be
affordable, and thus be more than a Band-Aid if the proper incentive package was
put together?
Mr. Hull: I do not quite understand the question.
Councilmember Hooser: If we are able to provide an incentive package
for twenty thousand dollars ($20,000)...so you are going to build this unit and because
you are going to get reduced water, reduced sewer, reduced permitting fees, reduced
property taxes on the new improvement, and you promised to put it into affordable
housing for a fixed length of time, it has the potential to greatly increase the people
who would take advantage of this program?
Mr. Hull: I could agree with that, yes.
Councilmember Hooser: Okay, and thus become more than a Band-Aid
perhaps is my point. I know you are not with the Housing Agency and perhaps we
should get the Housing Agency here to talk about this, but it is my understanding
that one of the fundamental rules of housing is increased inventory decreases price.
When you increase inventory in areas like Lihu`e, or Puhi, or Hanamd'ulu, the
increased inventory would by definition, by the law of economics, decrease the price
because there is more availability. Is that your understanding also?
Mr. Hull: Correct.
Councilmember Hooser: Similar to Councilmember Kaneshiro's
measure that he proposed to increase multi-family homes, I think that was the
premise that he used when he presented that, that more inventory is going to help
everybody regardless. When we look at terms like "affordable," it says "affordable,"
but affordable could be anything up to one hundred fifty percent (150%) of median
income, I think.
Councilmember Yukimura: One hundred forty percent (140%).
Councilmember Hooser: One hundred forty percent (140%). So there
is quite a range of that. When you looked at the work that went into developing it in
Honolulu, is it your understanding that by restricting the size of these units to
relatively small units and restricting the ability to sell them, that that has
affordability designed into it to increase the likelihood of keeping the rents down? Is
that why they did that?
Mr. Hull: Yes.
Councilmember Hooser: Okay. Thank you.
Council Chair Rapozo: Councilmember Kuali`i.
Councilmember Kuali`i: Ka`aina on that point about increased
inventory decreases price, would you not agree the issue that we are having though
is that it is not automatically true because you would have to increase inventory to
the place where you were providing/supplying more or at least equal to what is
demand and as long as the demand is higher than the supply, the price can be higher
or probably remain high?
COUNCIL MEETING 30 JULY 6, 2016
Mr. Hull: I would not say that is quite accurate.
Ultimately, the price of what it is at in Lihu`e is where supply and demand meet the
equilibrium. The equilibrium is extremely high because demand is so high and
supply is so short.
Councilmember Kuali`i: We are so far behind in supply is what you are
saying, right?
Mr. Hull Correct.
Councilmember Kuali`i: If this Bill generates a little bit of
improvement to additional housing, but not enough to really close that gap between
supply and demand, it will not necessarily, if we were without any kind of
requirement, have lower rents and be affordable?
Mr. Hull Could you restate that again?
Councilmember Kuali`i: That the market alone will not give us
affordable rates if the supply does not get to the point where it passes or equals
demand?
Mr. Hull Correct, and to that point, the longer supply
remains stagnant and demand keeps on increasing, you can automatically expect that
price will continue to increase.
Councilmember Kuali`i: You did say that the point about significant
barrier to entry and that people were having those concerns, many objected, but the
objection was not necessarily based on the price. You were saying that the objection
was based on the requirement of a one (1) year lease. This requirement of a one (1)
year lease is where it is at in the housing side, the affordable rental, could there be
consideration for this ARU specific situation something different, something that did
not require a one (1) year lease?
Mr. Hull: I would have to defer to the Housing Agency
because ultimately, the Housing Agency monitors which property owners are
providing affordable rentals under their ordinance and meets their standards that
the rate they are renting at, the terms they are renting at, and the annual renewal
of the contract.
Councilmember Kuali`i: It might be that we might be needing to look
at this as a whole different animal if it is going to be one more tool in the box for
addressing affordable housing. It is no longer the same as what other affordable
housing is because it is smaller, it is more compact, it is right in the city, and that if
the true objection is primarily based on that, maybe that could be changed and that
we still have some kind of requirement over the amount that can be charged in rents
as far as square feet or whatever. Thank you.
Council Chair Rapozo: Councilmember Yukimura, Councilmember
Kagawa, and then Councilmember Chock.
COUNCIL MEETING 31 JULY 6, 2016
Councilmember Yukimura: I think this Bill was introduced in the hopes
of creating affordable housing, but also in one of the goals of the Department of
Planning to just increase housing stock, right?
Mr. Hull: The primary intent is to increase inventory
and stock. To Council Chair Rapozo's point, using that term "affordable," I can see
how individuals may have been confused by that. That was not our intention to
reference affordable under the Affordable Housing Ordinance. The primary goal is
to increase inventory and stock. Our perception of increasing inventory and
particularly given the location and size of them, will mean that generally, it will not
be accessing the speculative market where there is a lot higher price ranges.
Councilmember Yukimura: What is the gap group? One hundred forty
percent (140%) of median income, which is what D.H. Horton will be providing in
their first phase, is a house that costs four hundred thirty-five thousand
dollars ($435,000). For most people, that is not affordable because eighty
percent (80%) of affordable housing need is, I think, at the one hundred
percent (100%) of median income. However, those who have incomes over one
hundred forty percent (140%) of median income need housing, too. If there is not
housing stock for them, they are going to be competing with those who want
affordable housing, right? There is a value in creating housing that is for people that
are higher than the one hundred forty percent (140%) of median income, but not with
county or state tax moneys, letting the private market provide for that housing stock.
Is this Bill not partly trying to do that, encourage the private sector to build houses
that might meet the need of the higher-end? Then, if we give breaks like in the
development fees, then we require that they be for the people who have lower incomes
at about one hundred percent (100%) of median income or below.
Mr. Hull: Ultimately, the goal is to increase inventory
and provide opportunity.
Councilmember Yukimura: Okay. If you have seven (7) new houses per
year based on this Bill, when you say "increase inventory to affect price," you have to
have a lot over a given time, right?
Mr. Hull: Correct.
Councilmember Yukimura: It is something about absorption rate or
whatever. If this Bill only has seven (7) houses per year, it is not really going to
impact price.
Mr. Hull: I would agree with that assessment.
Councilmember Yukimura: You agree with that?
Mr. Hull: Yes.
Councilmember Yukimura: What is our goal here with this Bill?
Mr. Hull: Ultimately Councilmember Yukimura, it is
just to provide opportunity to increase inventory. If that inventory is one (1) house
or it is five hundred (500) houses, ultimately, the goal is to provide an opportunity.
COUNCIL MEETING 32 JULY 6, 2016
Right now, there is a barrier or prohibition for any individual from constructing one
of these types of units. It provides the opportunity. Does it provide the impetus? No,
not necessarily, but it provides the opportunity. If a property owner wants to take
advantage of it, that is the property owner's prerogative.
Councilmember Yukimura: The way you could increase affordable
housing as defined by our Housing Agency would be to...if you can find the proper
incentives for people to build and rent at affordable rates, that will then increase
affordable housing?
Mr. Hull: I would agree with that assessment.
Councilmember Yukimura: The Department of Planning has proposed
water rules that would let an ADU be built at nine thousand eight hundred
dollars ($9,800) instead of fourteen thousand dollars ($14,000) for the Facilities
Reserve Charge, and this would be for a country estate, right?
Mr. Hull: Councilmember Yukimura, I am not prepared
to comment on water amendments. Quite frankly, I was not present at that meeting.
Councilmember Yukimura: Okay, but if the Department of Planning
cannot be working cross-purposes with our goals and if you are saying that these
incentives which will interact with this Bill, we need to know that you have an overall
plan, and that it actually works together.
Mr. Hull: I can comment somewhat briefly in the sense
that I know much of that move was actually to look at multi-family dwelling units.
In essence, that there was belief of some board members...the Planning Director was
involved in those proposals, but it did not come specifically from the Department of
Planning. The Planning Director and other Board of Water Supply members had
some concerns about the FRC rates of say, a multi-family unit or a small single-family
unit that is...well, if you look at an apartment unit of eight hundred (800) square feet
being assessed similar FRC rates that a five thousand (5,000) square feet country
estate would be assessed to see if there is a difference in water usage. Should we not
adjust that rate? I can speak to some of the intent, and that is my...
Council Chair Rapozo: We are on this Bill. We can discuss the
incentives if we want to at a later posting, but for this posting, it is this Bill. This
Bill is specific to zoning.
Mr. Hull: Yes.
Council Chair Rapozo: Allowing an Additional Rental Unit on a lot
three thousand five hundred (3,500) square feet up to four thousand nine hundred
ninety-nine (4,999), and five thousand (5,000) square feet and above.
Mr. Hull: Yes.
Council Chair Rapozo: I do not want to get into all of these
philosophicals because it has already been...
Councilmember Yukimura: Excuse me.
COUNCIL MEETING 33 JULY 6, 2016
Council Chair Rapozo: Hang on.
Councilmember Yukimura: I am still asking my questions.
Council Chair Rapozo: I told you folks if you want to have this
discussed, then we will go back to Committee because right now, we are having a
Committee discussion at the full Council. He is not prepared to answer for the
Department of Water or the Planning Director, who was present at those meetings, I
am assuming.
Councilmember Yukimura: Well, then we need the Planning Director
here.
Council Chair Rapozo: Then we need to defer because I am not going
to...hang on, Councilmember Yukimura. I just want to focus on the Bill today, what
is on the floor today.
Councilmember Yukimura: Well, I am trying to understand how the Bill
will interact with other things that the Department of Planning is proposing. I am
thinking now that I misunderstood these and that is why we probably need an
explanation. If it applies just to multi-family or resort development...well, I do not
know about resort development. Anyway, that is a little different and it will not
impact Bill No. 2627, Draft 1, like I was thinking it would. I think it would be
valuable to have a discussion so we are really clear about how all of this interacts. I
have an amendment to the Bill to propose.
Council Chair Rapozo: Hold on with the amendments. We still have
discussion. Councilmember Kagawa and then Councilmember Chock.
Councilmember Kagawa: Ka`aina on page 2 of the Bill, you said we
copied these amounts or these numbers from Honolulu.
Mr. Hull: Are you talking about the square footage?
Councilmember Kagawa: Yes, the square footage and the maximum
floor area.
Mr. Hull: I believe the square footage is identical to
Honolulu's bill.
Councilmember Kagawa: It is identical to Honolulu?
Mr. Hull: Yes.
Councilmember Kagawa: Do we have any idea what the ARUs are for
places like Kihei, or Big Island, or Kona, or Hilo? Is it comparable?
Mr. Hull: No. Maui and Big Island do not have
comparable ordinance, to my understanding of their (inaudible) ordinance.
Councilmember Kagawa: Maui and Big Island are pretty much like
Kaua`i's ten thousand (10,000) square footage?
COUNCIL MEETING 34 JULY 6, 2016
Mr. Hull: They have `ohana dwelling type of legislation,
but not the ARU that specifically requires that the rental unit be attached in some
way or I should say cannot be separated in ownership from a primary dwelling.
Councilmember Kagawa: Would you say that is the choice by Maui and
Hilo to stay rural? I think we are taking a step towards urban once we go down to
such a small square footage, right?
Mr. Hull: It is a matter of philosophy, quite frankly,
Councilmember Kagawa.
Councilmember Kagawa: Honolulu is urban, right?
Mr. Hull: They are definitely urban, yes.
Councilmember Kagawa: Yes. One million four hundred
thousand (1,400,000) people. We have seventy thousand (70,000) people here.
Mr. Hull: I would say that is what it is a matter of
philosophy in the sense that this, in all honesty, is part of, not like is said a panacea
or the primary thrust, but is part and parcel of the Department's attempt to keep
Kaua`i rural. In essence, if we do not look at further intensification of our town cores,
we are going to have suburban sprawl into our agricultural areas, which do not get
me wrong, there is going to be some outward growth that is going to need to happen.
But this is one attempt to help allow for further development in our urban areas and
arguably Lihu`e is much more urban than the outskirts.
Councilmember Kagawa: I am just wondering if maybe Kahului or Hilo,
who had encountered similar problems with the infrastructure that Lihu`e has and
they have in tackling this issue. I am wondering if the Department of Planning looked
at those Counties that in population are more similar to ours as to how they tackled
this issue rather than copying Honolulu, which is apples and oranges as far as our
makeup?
Mr. Hull: We did not reach out specifically to Maui or
Big Island on this.
Councilmember Kagawa: What came to mind for me, was that I am not
really supportive of this Bill as-is, but I am thinking if we started at five
thousand (5,000) square feet and went from five thousand (5,000) to seven thousand
five hundred (7,500) and then allowed four hundred (400) square feet maximum floor
area, and then we went seven thousand five hundred (7,500) to ten thousand (10,000)
to go with eight hundred (800) square feet is something that is more palatable as an
experiment to see how much people come on-board. I am thinking that is something
that at least we are not fully copying City and County of Honolulu. I do not know.
Mr. Hull: Councilmember Kagawa, if that was a
proposal on the floor, I can say that we would not have no objections and we would
consider that a friendly amendment.
Councilmember Kagawa: Okay. This is my last question. How many
complaints were there, because you said there is one (1) inspector? I guess it has
COUNCIL MEETING 35 JULY 6, 2016
been one (1) inspector for the past thirty (30) years of whatever. How many
complaints has he received regarding "hey, a structure next to me is illegal? There
are tons of cars taking up all of the shoulder. Can you please investigate whether
they have an illegal structure?" I am wondering how many complaints has the
inspector received over the past twenty (20) to thirty (30) years?
Mr. Hull: We can try and compile that number. I can
tell you we would have resource issues in compiling whether or not it was a legal
dwelling?
Councilmember Kagawa: In the Lihu`e district, at a later date.
Mr. Hull: We can look at illegal structures. I will
caution and say that in order for us to determine if it is an illegal dwelling though,
we would have to physically inspect every single file to see what the complaint was.
But as far as illegal structures, we can try and parse that out.
Councilmember Kagawa: How many illegal complaints because if it
comes in as a complaint, then that tells me that the complainant is not happy that
some people get to break the existing law when he abides by the law. I am just curious
to see how many complaints over the past twenty (20) to thirty (30) years we have
received in the Puhi and Hanama`ulu area because what I am worried about is that
this Bill will now spread to Lihu`e, which I think is not as bad. To say, "Well,
Hanama`ulu and Puhi, there is not much we can do. There is too much and we play
cat-and-mouse with them all the time." But to pass a bill and now say, "Okay Lihu`e,
we want you to come like that," is the main issue that I have. We can talk about
grandfathering all we want or not grandfathering, but the fact of the matter is if we
do not pass this Bill, they are all illegal right now and they will remain illegal. By
passing this Bill, this gives them a venue to become legal, and that is the difference,
right?
Mr. Hull: Yes, there are a lot of venues.
Councilmember Kagawa: Thank you.
Council Chair Rapozo: Councilmember Chock is next, but I just do
not see the incentive for the owner to come forward. First of all, I do not know what
percentage of those structures are permittable, like you said, lot coverage. I am going
to come in and I am going expose myself. Unless we have an amnesty where they are
assured no prosecution and then they have to pay nine thousand eight hundred
dollars ($9,800) for water, that is not a very good incentive. Again, I am just trying
to be real. Councilmember Chock.
Councilmember Chock: On page 2, you might not have the answer to
this, Ka`aina, but I am going to propose it anyways because it relates to FRC. It says,
""Additional Rental Unit" means..." and number 2 says, "When built with an existing
residential dwelling unit or attached to one, the two (2) units together shall constitute
a multi-family dwelling." For rule changes that we are looking at, Part 5
Section 3(3)(C) says, "existing family home converted to multi-family home will now
be assessed four thousand nine hundred dollars ($4,900) instead of the larger meter
fee or number of units less fourteen thousand dollars ($14,000)." Essentially, what
we are talking about is not a nine thousand dollar ($9,000)fee, but back to the original
COUNCIL MEETING 36 JULY 6, 2016
four thousand dollar ($4,000) fee for those that are deemed the multi-family dwelling
now?
Mr. Hull: Sorry, I was not aware that this had been
adopted.
Councilmember Chock: Neither was I.
Mr. Hull: Has the four thousand eight hundred
dollars ($4,800) fee been adopted?
Councilmember Chock: That is according to Councilmember
Yukimura.
Councilmember Yukimura: That is according to our staff's communication
with the Board of Water Supply.
Councilmember Chock: Does that sound right? Does what I am
saying here make sense to you?
Mr. Hull: If that was adopted, then it would be four
thousand eight hundred dollars ($4,800), correct. I know that two (2) meetings ago,
they had approved the measure to go to the Small Business Regulatory Review Board,
which is not the same as being adopted.
Councilmember Chock: Okay.
Mr. Hull: But I do not want to say it was not adopted,
but I am not sure.
Councilmember Chock: Maybe that is something that we can clarify...
Mr. Hull: If adopted, it would be the four thousand eight
hundred dollars ($4,800).
Councilmember Chock: ...to be sure that is the direction we are
headed so we know exactly what costs we are playing with from this incentive
package that you are proposing.
Mr. Hull: Yes.
Councilmember Chock: The second question that I have is it has been
somewhat of a collaboration and there was an interest initially and we had amended
out the affordability part, which was the tax incentive that we initially had in this
Bill. We took it out because the incentive bill was not ready because we did not know
where we were going with the water and everything else. That is probably why it
does says "affordable" in this Bill right now, and it maybe needs to be amended out.
However, if this body, because this came back from the Commission, now this body is
saying "we want that affordability clause in there." From your perspective, from the
Department of Planning's perspective, where should it sit? Should it go back in here,
or should there be some original reference as it was here and we amend it out, or does
it go into the incentive section?
COUNCIL MEETING 37 JULY 6, 2016
Mr. Hull: That is really a policy discussion. In essence,
do you want to require the affordable requirements imposed on the onset for the
zoning entitlement or do you want the affordable housing requirements to be a
requirement of the incentive? Like I said, in either situation, the Department does
not object to that.
Councilmember Chock: We understand. It might be a barrier for
people wanting to take advantage of it.
Mr. Hull: Correct. In our discussions...
Councilmember Chock: That was the reason why after all your
community meetings with all of the organizations they said "we are against that
affordability clause," right?
Mr. Hull: Yes.
Councilmember Chock: The question that we have to decide today
from my perspective, is whether this goes back to Committee to put that verbiage into
this Bill or do we wait for the incentive bill and put it in there. I am not clear. I need
more guidance. I understand you are saying it is a policy, but it is administrative as
well because it needs to inform one or the other.
Mr. Hull: That is what I am saying. Because of our
meetings and how much we saw as it potentially being a barrier, the Department is
not recommending to put it in. But if it is the prerogative of this Council, we will not
object to that.
Councilmember Chock: Thank you.
Council Chair Rapozo: Councilmember Kaneshiro is next.
Councilmember Kaneshiro: I will hold my questions. If it goes to the
Committee, then I will ask my questions later on.
Council Chair Rapozo: I apologize because I have got to believe I
missed the last meeting if all of this discussion went on. You said you met with the
stakeholders who objected to the affordability requirement. Who were those
stakeholders?
Mr. Hull: The primary groups we met with were the
Board of Realtors, Chamber of Commerce, and the contractors.
Council Chair Rapozo: What about the people that need homes?
Were they part of the stakeholders? I do not think they would object. Contractors
stand to make money. Landlords stand to make money. Realtors stand to make
money. That is what we are doing with this Bill. We are giving all of these people
another revenue stream without affordability. That is what we are doing. Would you
not agree that if you have a home and you put up an eight hundred (800) square feet
cottage with no affordability requirement, what do you think the value of that
property goes to? You have the ability to rent this property, even if it is not a TVR or
B&B, as a market rental. Do you not think that...that is crazy because now we are
COUNCIL MEETING 38 JULY 6, 2016
at saying "Hey, your house that was assessed at three hundred sixty-nine thousand
dollars ($369,000) or four hundred twenty-five thousand dollars ($425,000)just went
to seven hundred thousand dollars ($700,000) because now you have the ability to
generate income." That is what this Bill is doing. I am prepared to vote today on this
Bill as-written. I will tell you. I do not think you will get the four (4) votes. I really
do not think you will. I do not know, but we will see. If you folks want any chance
on this, I would suggest get it back to Committee because it is frustrating as I read
this today. It is not an affordable rental bill. It is not.
Mr. Hull: Council Chair Rapozo, to the respect in
essence, the reason we met specifically with those groups is in meeting with the
Housing Agency and discussing with Department of Hawaiian Home Lands (DHHL)
previously, there is a need to provide more inventory.
Council Chair Rapozo: That is not what the purpose of this Bill says
though, Ka`aina. That is what I am trying to tell you. When you read this thing, it
says the purpose is to create more affordable rentals. It does not say "to create or
increase inventory so that the rule of supply and demand will kick in at some point
and hopefully..." no. It says "the purpose of this Bill is to encourage more affordable
rentals." It is not going to do that. It is not going to do that at all. No one is going to
come forward. Maybe there are some self-builders and good-natured spirits out there
that say, "Yes, I want to help the community" or "maybe I want to build a little shack
for my son." You know that is the minority. That is going to be the exception, not the
rule. If we want to create affordable housing, we have to create affordable housing
and affordable rentals. This Bill, as it is written today, will not do that. That is just
my very...
Mr. Hull: To be quite honest, Council Chair Rapozo,
what we anticipate mostly being built actually is not going to necessarily even go on
the rental market. It actually is on the mother-in-law type of in-law type of housing
that provides for kupuna of the family or provide for those children that cannot quite
afford to get into the rental or purchase market yet. So that is actually where we
anticipate much of these units going online.
Council Chair Rapozo: I guess I just have a different reality. My lens
are different from many other because I do not see that. I see that as an opportunity
to invest money on your property to create income. That is what I see. That is what
I have seen last ten (10), twelve (12), or fourteen (14) years. That is why we have the
problem with TVRs and B&Bs. Has your Department considered incentivizing the
existing ADU law with the ten thousand (10,000) square feet? Have we of ever
thought about maybe creating incentives for those people to create affordable
housing?
Mr. Hull: At this time, no.
Council Chair Rapozo: To me, that would make more sense. You
have the lot coverage. Put on some incentives for those people to create housing for
their family and their kids. The only way you are going to do is by putting in a
requirement of affordability. That is the only way you are going to assure the County
that we are going to have affordable rentals, in my opinion. Councilmember
Yukimura.
COUNCIL MEETING 39 JULY 6, 2016
Councilmember Yukimura: The Appleseed Foundation, which is trying to
help poor people, did support this ARU Bill, but I do not think it is working in
Honolulu as anticipated. Before this Bill was introduced, did you research the
resources that the Appleseed Foundation had?
Mr. Hull: Not specifically to the Appleseed Foundation,
no.
Councilmember Yukimura: In Barnstable, Massachusetts, they have an
Accessory Affordable Apartment Program. The owner must rent the apartment to
tenants whose income is eighty percent (80%) or less than area median, must record
a deed restriction, and offers a loan program to reimburse property owners for eligible
costs associated with renovating accessory affordable apartments. Owners may also
apply for a one-time deferred loan that will be payable in full upon sale, transfer,
death, or otherwise loss of affordable deed restriction. There are places where, I
think, the dual goal of this Bill. The goal of the Bill is to "encourage and accommodate
the construction of the additional rental units and to increase the number of
affordable rental units." So there is the possibility of increasing units without the
affordability restriction, but for those who are above the one hundred forty
percent (140%), so up to the two hundred percent (200%) of median income. Then,
with the kinds of things that Barnstable, Massachusetts has done, require that
actually increase the number of affordable units. But it has to be crafted really
carefully because otherwise you might be incentivizing things that are not going to
be affordable. I think it is the incentive piece that you can use to create affordable
units by our United States Department of Housing and Development (HUD)
standards. Then, you might be able to increase the inventory of the one hundred forty
percent (140%) and above, but I think this Bill needs a lot more work in order to do
that.
Council Chair Rapozo: Are there any more questions for Ka`aina? I
know we have a couple of registered speakers on this. If not, thank you very much.
We are going to take a caption break. Councilmember Kagawa.
Councilmember Kagawa: I am wondering if we are going to have a short
bit of discussion before we defer.
Council Chair Rapozo: We sure will.
Councilmember Kagawa: Alright. Thank you.
Council Chair Rapozo: Councilmember Yukimura just read from
Massachusetts, which is exactly what I am trying to say. Eighty percent (80%) and
below is, I would guess, where we should be looking at. For this County to incentivize,
to reduce fees, or to give anybody a break so they can build an investment property
is ridiculous, I think. That is just my opinion. When you start reducing fees and it
is not tied to a...one hundred forty percent (140%) of median income is not affordable.
It is one hundred forty percent (140%). It is more than one hundred percent (100%).
It may be a gap or whatever you want to call it, but at the end of the day, eighty
percent (80%) and below is where I think we should be focusing. With that, I am
going to take the ten (10) minute caption break now. For Maui, we have to take a
caption break every two (2) hours for ten (10) minutes. We are going to do that, come
back, and then we will have public testimony. Ten (10) minute recess.
COUNCIL MEETING 40 JULY 6, 2016
There being no objections, the meeting recessed at 10:24 a.m.
The meeting reconvened at 10:34 a.m., and proceeded as follows:
(Councilmembers Kuali`i and Yukimura were noted as not present.)
Council Chair Rapozo: With the rules still suspended, can we have
the first registered speaker, please?
There being no objections, the rules were suspended to take public testimony.
Mr. Sato: Our only registered speaker on this item is
Anne Punohu.
ANNE PUNOHU: Aloha kakou. My name is Anne Punohu.
After listening to the discussion in the Council Chambers, I had a completely different
idea of what I thought this Bill would be. I had this vision of something that I thought
we had discussed in the General Plan, which is little mom and pop stores and up
above, there would be more apartments that are more affordable for the working class
because all of the new places that have been built here that require working class
workers, minimum wage, and definitely not in that eighty percent (80%) section.
(Councilmember Kuali`i was noted as present.)
Ms. Punohu: Right now, the people that are risking
themselves to house people in little rooms and places where there is not a shower
inside or there is not adequate facilities just to get a roof over their heads, these are
actually people that are housing people inside of the community. People like myself
are tired of only having public housing as our option. We want to be integrated into
our communities. We should not be ostracized because of how much we are able to
earn because we live on Kaua`i and this is our reality. I understand the original
purpose is probably great, but after listening to what I heard in the Council Chambers
today, I am not sure that I can support it. I like what Council Chair Rapozo said. He
makes sense. Also, I heard what Councilmember Yukimura said too about this
ability.
(Councilmember Yukimura was noted as present.)
Ms. Punohu: If we take care of the inventory of the
higher-end, somehow it is going to trickle down to the working class. We all know
any of us who have lived on Kaua`i for any amount of time, that does not work and
has not worked. The problem is one (1) word. It is not a very big word. It is sure not
aloha. The word is "greed." People that come here with the idea of getting as much
profit as they can out of their housing situation and how much profit they can make
on it, are always going to think about the word "greed," not about the word
"community" and certainly not about the word "integration" of our working class into
the communities. For me, if it does not support the working class today on Kaua`i,
you do not support Kaua`i. I am not going to sit here and support any bill that will
help the higher-end and not help forty percent (40%) or lower. The eighty
percent (80%), one hundred twenty percent (120%), or two hundred percent (200%) is
ridiculous. It is not going to work on Kaua`i anymore as we have decided to build
these places for people to work such as Petco, Home Depot, the new Safeway, and all
COUNCIL MEETING 41 JULY 6, 2016
of these places that require people to work there. Our working class is on their second
or third jobs. The working people are exhausted. They are tired. They are working
very hard. Nobody can afford the rents here. I do not see how this is going to
incentivize, especially people on the lower-end who are really trying to accommodate
people into their houses. They probably have a lot of violations. I do not see how
some little Hanama`ulu Filipino aunty and uncle...
Council Chair Rapozo: Okay, Anne. I have to stop you right there
real quick. Anyone else wishing to testify? You can come back for a second three (3)
minutes. I apologize.
Ms. Punohu: That is okay. I can just stop my testimony. I
think you folks got it already.
Council Chair Rapozo: No, you can come back right after Joe. Joe is
going to take three (3) minutes and twelve (12) seconds.
JOE ROSA: Good morning. For the record, Joe Rosa. I
was a single homeowner to start on my property in 1962. It was something I can say
was affordable. Today, it is all beyond the reach of anybody; a young person, single
person, or a young married couple. It is beyond their reach. It is not affordable.
Affordable is something that you can pay with what you are making with one (1)job.
After, they made a constitutional convention change. They stopped the State from
developing subdivisions like in the Wailua Houselots area and Hanapepe Heights. In
1962 when I bought my property, three (3) fellow workers bought property in Wailua
Houselots for the last time that was offered. Think about property. You have to get
property made available for a young person to buy the land. Today, the prices are
ridiculous. We do not have any land classification and I heard that word for the first
time when Councilmember Yukimura was the Mayor, land classification. There is
none on this island because property cost is the same all over the island and they do
not have the facilities or the benefits of the shopping centers, airport, and utilities
like that there that would give the land the classification rating that it needs. Today,
Hanalei and Lihu`e are twenty dollars ($20) a square foot. A young person or a single
person cannot think about buying. I would not even think about it. My property just
cost me seven thousand dollars ($7,000) from (inaudible) to Lihu`e Plantation. Who
owns all of the land around the Lihu`e area? You folks talk about it. Go see Grove
Farm Company, LLC. They are the developers. They could sell the land and get
people signed up like I did with the plantation. I signed up after I put my service
time in the Korean War. I had to wait nearly seven (7) or eight (8) years before I was
able to buy the lot. Go after Grove Farm Company, LLC , they own all of the land
from Puhi to Hanama`ulu when they bought AMFAC properties. Another thing is
that Grove Farm Company, LLC controls the whole water system in the Lihu`e area.
All the wells that the County owns is on their property. Who is to blame for this kind
of the inflation? It is the realtors, too. The area where I live, the land area is about
three hundred thousand dollars ($300,000) per household over there, but yet, when
it is being sold, it goes to another three hundred thousand dollars ($300,000) that
they slap on. Just recently last month, one (1) was sold for five hundred forty
thousand dollars ($540,000).
Council Chair Rapozo: Joe, hang on. Anyone else wishing to testify?
Mr. Rosa: So look into that.
COUNCIL MEETING 42 JULY 6, 2016
Council Chair Rapozo: Joe.
Mr. Rosa: It starts with the land.
Council Chair Rapozo: Okay. Thank you.
Mr. Rosa: We need it cheap.
Council Chair Rapozo: Thank you.
Mr. Rosa: I will be back.
Council Chair Rapozo: With that we will call the meeting back to
order.
There being no further testimony, the meeting was called back to order, and
proceeded as follows:
Council Chair Rapozo: Is there any further discussion?
Councilmember Kagawa.
Councilmember Kagawa: Thank you, Council Chair Rapozo. I have an
amendment that I want to propose at the Committee Meeting if we go back there. I
think you had some concerns. My amendment would say that it would raise the limit
from three thousand five hundred (3,500) square feet to five thousand (5,000) square
feet. So it would be from five thousand (5,000) square feet to seven thousand five
hundred (7,500) square feet, you would have a maximum square area of four hundred
(400) square feet. From seven thousand five hundred (7,500) square feet and above,
you would be able to have an eight hundred (800) square feet maximum floor area.
That would be my preference. Since we are experimenting and seeing how many
people are on-board, I would side on the err of caution and raise the lot area to at
least five thousand (5,000) square feet. That way we are still following what the
Lihu`e Plan is advising, which is to try and have more units. It is not only about
affordable, well, qualifying for affordable as per the housing guidelines. A lot of
affordable housing are for families that have families that come back home, work, or
to take care of kupuna, and to allow them to have that ARU so that they can save
money and make a living in this most expensive place in the world called "Kaua`i." I
think the way I see it is not only hoping to increase inventory, but having housing for
local families to have families and relatives have new opportunities to have housing
in the Lihu`e area. I think with that amendment, it is a lot more palatable for me.
As far as addressing problems and helping the Department of Planning to avoid this
cat-and-mouse game that they have with the Puhi and Hanama`ulu areas, I would
prefer if this Bill did not address that. But I think that requires a separate bill in
itself to just address that issue and how we resolve that issue. There has been no
requests whatsoever from anybody in Puhi or Hanama`ulu of friends or family that
want this Bill to pass to benefit them. I have a lot of them out there in those areas.
The reason why, I believe, is that they know it is not okay to violate the Building
Codes. But they just made do with what they had and provided housing for families
or even for rental income just to survive on this island. But they know it is not proper
to avoid the laws and ask for a bill to make them comply. It is not about that.
Certainly, if this Bill passes, it will allow some of them to have a venue to go and
apply. Now, whether they would do it or not being that they have this FRC charge
COUNCIL MEETING 43 JULY 6, 2016
and what have you all attached to applying for an ARU, I highly doubt it. But to
provide affordable housing for local families, I think, I would rather do something
than not do something. Let us see if we can get that amendment at least approved in
Committee next week. I think Ka`aina will have updated information as to whether
or not the two thousand one hundred (2,100) number that he talked about of people
that could benefit from the ARU bill, how much that would be reduced. We will see
at the next Committee Meeting. So at least give him a week to have those answers.
Thank you, Council Chair Rapozo.
Councilmember Yukimura: While we are talking about amendments, I
too, have an amendment. I guess in Committee, we can consider it. It says "no
development fees, including Facilities Reserve Charges implemented by the
Department of Water or County sewer connection fees shall be waived unless the
applicant agrees in writing to rent the ARU at an affordable rental level that meets
HUD's guidelines at one hundred percent (100%) of median income" and "restrictions
shall be recorded against the property in perpetuity or until the owner pays any
previously waived fees adjusted for inflation." So at least you get to recoup the fees.
Now, there are many options. We could require the property to be affordable forever.
I think that is a little problematic. Anyway, I just want to raise this issue, and you
may or may not realize this actually invalidates one of the pieces that was approved
by the Board of Water Supply. I think the one that would allow deferral or a waiver
for any property whether or not it is affordable, any ARU, whether or not it is
affordable. I think that is what I read the Department of Water's rule is now.
Council Chair Rapozo: Thank you. Are there any other comments?
Councilmember Chock.
Councilmember Chock: Thank you, Council Chair Rapozo. I am
happy to entertain those amendments. I think that is what this is for, is for it to come
to Council and for us to work on it, and there have been previous amendments
already. My biggest fear is that we do not push something forward, because in order
to really look at the supply and demand question that we are considering, it is going
to take multiple initiatives to get there. We have already seen some of that being
entertained here. I will just mention from the beginning, we had looked at this as an
affordable measure with the inclusion of the incentives package as where we thought
it would sit. But I am happy to entertain it here through the amendment
Councilmember Yukimura is looking at. We thought the eight hundred (800) square
feet and four hundred (400) square feet sizes would hinder any speculative
approaches to this. I am also willing to look at the size of the lot increase if interest
is to actually limit what the character of Lihu`e is of question. I think the big picture
is that we need to be forward-looking and forward-thinking about what the real needs
are on Kaua`i and that we need to take at least one (1) step forward. I think there
are many steps that we need to take, but this is one (1) step forward. As far as the
whole island, I think this is a good stepping stone. If we can look at this, get this
passed with our amendments that we want and revisit this, there is no reason why
we would not look at the other areas around the island that we see the kind of growth
that we want for this to apply. But we really need to work with the Department of
Planning to figure out what is their capacity in delivering and administering this as
well. If the Council wishes to refer this back to the Committee or to pass these
amendments today, I am open to it. Thank you.
Council Chair Rapozo: Anyone else? Councilmember Yukimura.
COUNCIL MEETING 44 JULY 6, 2016
Councilmember Yukimura: I just want to say in the research that Yvette
did, there is a whole issue about how to do amnesty and how to effectively afford
properties that may not be built to specifications or legal right now, the opportunity
to become legal affordable housing. I think we really need to look at that and I hope
the Department of Planning will avail itself of the all of the research that has been
done. Let us make sure we send it to them. I, too, would like to move something
forward, but I want to make sure it is really going to advance our goals of affordable
housing. I think we really have to work on the details in order to make sure that it
is going to achieve what we want to achieve.
Council Chair Rapozo: Anyone else? Councilmember Kaneshiro.
Councilmember Kaneshiro: I think we had a lot of good discussion and I
think a lot of questions came up. I was in the meeting the last time and I think it
went pretty quickly because there were only a few Members here. We kind of just
took a step back and said it was not by any means an affordable housing solution. It
was probably an overlook for not amending that word out. But we basically said
"what is this doing? Is it providing opportunity?" That is how we kind of rationalized
it or how I rationalized it the last time. There were a lot of valid questions that came
up. It would help me if the Department of Planning took into consideration what
went on and maybe took a step back also and said, "What is our focus on this Bill? Is
it for affordable housing or is it to increase the supply of the housing in the market?"
Maybe kind of just regroup on it just hearing the concerns and kind of coming back,
or discussing with certain Councilmembers what would you like to see in it? Then,
maybe coming back with a product that is maybe a little more adjusted or fine-tuned.
I can see us spending a lot of time on this and throwing out a lot of options, but what
is our intent for this Bill and trying to focus on what is the intent and how we get
there. If not, we are going to be trying to increase housing supply, do affordable
packages, and redo the water, talking to the Board of Water Supply, and redoing
rates. It can go all over the place and take forever. I mean, just for me, we need to
get a little more refocused on what we are trying to do. It may help our Committee
Meetings be a little tighter. Just from today's conversation, we heard a lot of things
going on and I am just wondering how we are going to be able to tie it all back
together.
Council Chair Rapozo: Okay. Is that it? Well, obviously I will be
supporting the referral to the Committee. I guess I am just confused and maybe I
have to go read up on minutes. If we want to fix the affordable rental problems here,
then we need to provide affordable rentals. The way to do that is you incentivize that
so that people will take advantage of building an affordable rental, and if not for those
incentives, they would not. That is what incentives do, right? It changes behavior
because you want a specific outcome. So you create the incentive. This incentive,
and even with Councilmember Yukimura's potential amendment, if you are the
landowner and you have an opportunity to pay the standard fees and charge fair
market or pay a little reduced fee and be restricted to affordable housing, I still do
not know how many people would take advantage of that because now you have this
ability to charge market rent forever and ever and make your money and more. I am
not sure that is going to work. The other possibility, if inventory is what we want to
do, then fine. I do not have a problem with trying to incentivize inventory, but why
only Lihu`e? If we want to get to that number of units to bring that supply and
demand number closer together, why would you limit to Lihu`e? There is no way we
are going to make up the numbers of needed units in just the Lihu`e area. So if the
COUNCIL MEETING 45 JULY 6, 2016
goal is about affordable housing, which I am finding out now, then obviously that has
to be taken out of the purpose. The second part is if we just want to give people
incentives to build, build, build and you can charge what you want, then why keep
only to tied to Lihu`e? I know plenty of people on the west side that would love for
that opportunity. I know plenty of people in Kapa'a that would love that opportunity.
Again, we are going to penalize certain areas because no, we believe it all should be
in Lihu`e. If we are trying to boost inventory, would it not make sense to allow
everybody to build extra units? I do not think it will affect the availability of
affordable housing. I really do not. I do not think that is going to happen. I think as
I look at Craigslist that I looked up today, a five hundred (500) square feet unit is one
thousand two hundred seventy-five dollars ($1,275), one thousand five hundred
dollars ($1,500), one thousand three hundred fifty dollars ($1,350), and one thousand
three hundred dollars ($1,300). For a four hundred (400) square feet unit, it is nine
hundred fifty dollars ($950). For an eight hundred (800) square feet unit, it is one
thousand four hundred dollars ($1,400), one thousand four hundred dollars ($1,400),
and one thousand six hundred dollars ($1,600). That is what is going right now.
These are rooms and that is what we are going to have. So you are telling me you are
going to build a nice, fancy cottage and charge nine hundred dollars ($900) or one
thousand dollars ($1,000)? That is not going to happen. It all depends on what our
priority is at that point. Again, the inventory obviously, supply and demand. Yes, if
you can meet that demand, naturally prices will drop. But is the simple adjustments
we are trying to do going to create that extra two thousand (2,000), or two thousand
five hundred (2,500), or two thousand eight hundred (2,800) units? I do not know.
The one thing I have not heard...this County historically has always relied on
the developer community. "Hey, you want to build this, build us this many homes"
or now we are going to landlords and say, "Hey, you want to help us out? Here is
some incentives. Go build some units." But what I have not seen is any attempt by
the Administration to come across with some solutions as far as this County
purchasing some land, this County going around and utilizing financing options that
the County has to actually purchase lands to have some land available so an
affordable housing developer could come in and make some money off of a project.
We have not done that.
Councilmember Yukimura: We did that with Lima Ola.
Council Chair Rapozo: What?
Councilmember Yukimura: Lima Ola.
Council Chair Rapozo: Councilmember Yukimura, that land was
purchased a long time ago. We will dump millions to expand parks. We will spend
millions to do the recreational expansions and land acquisitions, but for affordable
housing, which we all profess that is a priority, and today I find out it is really not a
priority. We just want inventory. We do not really want to. Eighty percent (80%)
and below, to me, is where we have to be if we want to help that segment of our
community. Anyway, we have a motion to approve. I will just entertain a motion to
refer.
Councilmember Yukimura moved to refer Bill No. 2627, Draft 1 to the
July 13, 2016 Planning Committee Meeting, seconded by Councilmember
Kuali`i.
COUNCIL MEETING 46 JULY 6, 2016
Council Chair Rapozo: Councilmember Kagawa.
Councilmember Kagawa: Is that enough time? I like Councilmember
Kaneshiro's suggestion that the Department of Planning take a step back, give them
some time to see what their end goal is. I am thinking least give them an additional
two (2) weeks in addition to the to next week's Committee Meeting would maybe be
more efficient for the Department of Planning. I am not just pushing it off. I am
saying there is no sense in talking a lot about it and then we are going to wait for
more answers or wait for them to refocus. I am just thinking that maybe we give
them three (3) weeks. That is my suggestion.
Council Chair Rapozo: That would be the 27th. Councilmember
Chock.
Councilmember Chock: I am okay with more time. I just think it was
clear from what I heard today though that the Department sees this a certain way. I
think the question actually is what do the people around this table want and what
are they going to stand behind and do work on? If it is the affordable housing
direction, then that is what we will focus on. Then we present it and then get some
feedback from the Department of Planning on how it is they intend to help
administrate it and make sure it is connected. I just wanted to make sure we were
clear on where the work goes and if we need more time for the Department of
Planning after that, yes, sure. We can continue.
Councilmember Kagawa: To answer, I am not a Planner. I did not work
on the Lihu`e Plan or General Plan. They know what the Lihu`e Plan was trying to
accomplish. I do not. The Lihu`e Plan said more inventory or more affordable
housing. I do not know what the Lihu`e Plan said. I am just giving them more time
to see what their focus is based on what the Council has...I think the Council has
given some good questions and concerns. I do not know if there is any refocusing, but
I am saying that we can go to next week and if the Department of Planning is not
ready, then just tell us next week that they need more time to refocus or do some of
what Councilmember Kaneshiro had advised. I think let us have a good plan coming
from the Administration and Council in working together, not the Administration
giving us this Bill and now we are raising these questions. I do not know if their focus
is changing, but it seems like affordable housing is no longer there.
Council Chair Rapozo: Councilmember Yukimura.
Councilmember Yukimura: If it is our job at this point, I am willing to
work on amendments. But I think there is a lack of information and understanding
in terms of what the Department of Planning's big picture is with this. I would like
to have a discussion so the public also understands in terms of what they are trying
to do at the Department of Water. I think having a meeting next week would be
useful just information-gathering and then maybe deferring it so we can work on
amendments, or they can work on amendments, or we work together with them on
amendments.
Council Chair Rapozo: I would suggest referring it to next week as
the motion was made, and having someone from Department of Water and the
Department of Planning here because I agree.
COUNCIL MEETING 47 JULY 6, 2016
Councilmember Yukimura: That would be good.
Council Chair Rapozo: I have this today and I heard it is basically he
said/she said, or somebody said it passed. We really do not know. Have them here
so they can explain the ramifications. I do not think it is very difficult to
misunderstand what they are trying to say in this sheet. As I am reading it, I have
a lot of questions and I do not think it is fair for Ka`aina to answer for them. If there
is no objection, I think next week, if we can have the Department of Water here as
well as the Department of Planning, and even the Housing Agency for that matter.
Then after next week's meeting, my suggestion would be to defer it to the next
Committee Meeting where amendments can be introduced because I think there is a
lot of information that we are speculating or we are assuming. I am concerned that
we are going to pass something like that. Again, the person with the ten
thousand (10,000) square feet lot who is eligible for an ADU who can contribute just
as much to this inventory or affordable housing issue on the island, they do not get a
benefit. They do not get any benefit. They are not allowed. Anyway, we have to have
a lot of discussion. If there is no objection, we will do that. Staff, make sure we get
someone from the Department of Planning, the Department of Water, and the
Housing Agency here for next week with the understanding that the amendments
will be introduced in the following meeting on the 27th. Is that okay? Okay. Any
further discussion? Go ahead.
Councilmember Yukimura: I will be circulating my amendment just for
people to understand.
Council Chair Rapozo: If you are going to do that, you might want to
do it here.
Councilmember Yukimura: Okay, yes.
Council Chair Rapozo: Because obviously...
Councilmember Yukimura: Yes, thank you.
Council Chair Rapozo: ...you cannot circulate it.
Councilmember Yukimura: Well, let us see.
Council Chair Rapozo: The motion is to refer. We are in discussion.
Councilmember Yukimura: I can just circulate it without making a
motion to amend?
Council Chair Rapozo: Yes, but you need to do it here and the public
would have access to a copy if they want.
Councilmember Yukimura: Okay. I am just to ask that it be circulated.
Thank you.
Council Chair Rapozo: Thank you. Is there any further discussion?
If not, the motion is to refer to next week's Committee Meeting.
COUNCIL MEETING 48 JULY 6, 2016
The motion to refer Bill No. 2627, Draft 1 to the July 13, 2016 Planning
Committee Meeting was then put, and unanimously carried.
Council Chair Rapozo: Motion carried. Next item, please.
Bill No. 2633, Draft 1 — A BILL FOR AN ORDINANCE AMENDING
CHAPTER 5A, SECTION 5A-11A.1, KAUAI COUNTY CODE 1987, AS AMENDED,
RELATING TO THE BENEFICIAL TAX RATE FOR PROPERTY USED FOR
LONG-TERM AFFORDABLE RENTAL: Councilmember Kuali`i moved for adoption
of Bill No. 2633, Draft 1, on second and final reading, and that it be transmitted to the
Mayor for his approval, seconded by Councilmember Yukimura.
Council Chair Rapozo: Thank you very much. Is there any discussion
before we open it up to public testimony? Do we have any questions of the
Administration? Are there any amendments? If not, I will suspend the rules. Can
we have the first registered speaker, please?
Mr. Sato: We have one (1) registered speaker, Anne
Punohu.
There being no objections, the rules were suspended to take public testimony.
Ms. Punohu: Aloha, Anne Punohu. Am I to understand
that this has been approved already in the form that I am reading here?
Council Chair Rapozo: That is what we are voting on today, Anne.
Ms. Punohu: Has it been approved already as-written?
Council Chair Rapozo: I am sorry.
Ms. Punohu: Has it been approved already?
Council Chair Rapozo: The Committee has recommended approval.
Ms. Punohu: Okay, not on the whole, right? Okay. As to
our previous huge discussion, long-term rentals are very important because we want
to prevent transient rentals and high rents. However, as to my previous discussion
and every millions of discussions I ever have in here about housing, is the median
income is too high. You are going to accommodate people who are coming here from
the mainland who have money. You are not going to be able to take care of the
working class people who need the long-term housing because transient people do not
need long-term housing. You are thinking about it and you should be thinking about
the back of this island, which is the working class. If you are going to keep it at eighty
percent (80%), it does not help. You need to lower the percentage. Please. Eighty
percent (80%) is too high. That is just my main complaint. My second one is if you
ask me, this Bill basically begs or really skirts the line or maybe even opens the door
to rent control. I think it is absolutely needed on this island. As long as you keep the
median income so high, you are allowing people to charge two thousand
dollars ($2,000) for a two (2) bedroom, which is average going price on Craigslist. It
is ridiculous. I have seen two (2) bedrooms going for three thousand dollars ($3,000)
or four thousand dollars ($4,000) and calling it a long-term executive rental or they
COUNCIL MEETING 49 JULY 6, 2016
will be very specific about the kinds of people that they want in there. Again, I want
to say, I fought for a bill to prevent discrimination in housing against HUD voucher
holders. I have heard a lot of discussion in this room today about the standards of
HUD. How can HUD and this County, in general, talk about the standards of HUD
when they continue to allow discrimination in the open rental market against HUD
voucher holders? HUD voucher holders continue to lose their HUD vouchers. They
cannot find a rental in three (3) months. I need this Bill to help my people. The
working class people need to be helped with this Bill because that is what this is
supposed to be for. A long-term rental is for somebody who lives here, somebody who
works here, somebody who has an investment in this community, and not somebody
who just lands by a plane and decides they are going to make their (inaudible) life on
Kaua`i, they are here, and let us roll out the red carpet for them. No. We need to stop
this. We need to take care of our people. We need to lower that median. Lower it,
please. But the concept is great though.
Council Chair Rapozo: Anne, hold on real quick. Anyone else wishing
to testify?
Ms. Punohu: I am pau.
Council Chair Rapozo: Okay. You can come back, Anne.
TINA SAKAMOTO: Good morning. My name is Tina Sakamoto. I
am glad I was here this morning to hear the discussion on Bill No. 2627, Draft 1 and
the emphasis on the urgent need of affordable housing. The County has long-term
affordable housing where it offers for the private sector to rent at an affordable rate
specified by the program, and the incentive is to get a real property tax reduction. It
is interesting to me to see that over the program, we have lost participants. Last
year, we lost landlord private-sector participants in this program. Maybe one (1) of
the reasons why is because for the last two (2) years, the allowable rents have been
reduced. So that is in no way an incentive when insurance, maintenance costs, and
real property taxes are up because the assessment values are increasing. This is in
addition to existing mortgage. Is it really reasonable to offer a program without
realistic incentives? Councilmember Yukimura had mentioned in the prior bill going
to one hundred percent (100%)? Why would you go to the one hundred percent (100%)
tier if you are only offering in your own county program, an eighty percent (80%) tier?
I think you should consider for this program to go to the one hundred percent (100%)
tier. That way you will probably at least maintain your existing affordable housing
rental stock. I think it is also important to review annually and to put a lot of effort
not only the methodology, but the allowable rents in order to have a successful
long-term affordable housing program. So nothing is going down. I think you should
really consider some type of increase in order to have landlords participate in this
long-term affordable housing, not the Section 8, or not to subsidize at eighty
percent (80%) because that is geared for low rents for elderly and disabled. We are
talking about this program, which is long-term affordable rental housing. Thank you.
Council Chair Rapozo: Thank you. Anyone else wishing to testify? If
not, while the rules are suspended, Ken, can I ask you a real quick question? I am
not sure if you are able to answer it. It might be for you. Do we have a record of
number of the participants in this program year-to-year?
COUNCIL MEETING 50 JULY 6, 2016
KEN M. SHIMONISHI, Director of Finance: Ken Shimonishi, Director
of Finance. Yes, we do. In the past year, we had one thousand two hundred (1,200)
participants. That was inclusive of an additional forty-four (44) that came on after
Council extended the exemption deadline to December 31st and we kept the 2015 rent
levels. Instead of going down, we kept it the same. The year before, I believe it was
roughly a little over one thousand three hundred (1,300), one thousand three hundred
two (1,302). There was a decrease. I am not sure about the numbers prior, whether
it goes up and down depending on market and obviously what the landlords can get
for their properties.
Council Chair Rapozo: It is fair or accurate to say that in last two (2)
years, there is a trend of participant numbers dropping?
Mr. Shimonishi: I would say I think within the last three (3)
years there have been a continued declining trend. Again, I think you are correct,
Council Chair Rapozo, that this is probably something better addressed with the
Housing Agency as far as the rent levels, the cause, and all of the economics that go
behind it.
Council Chair Rapozo: I think Tina explained the cause. That is
probably indisputable that the fact that the cost to maintain a rental because of
increasing costs.
Mr. Shimonishi: If I could, Council Chair Rapozo, one of the
things I wanted to point out was that at the last Council Meeting, I know there was
talk about using a different methodology, a different scale, to try to adjust the
numbers in order to participate in this program. Just so that the Council is mindful
that the exemption deadline is coming up September 30th for all exemptions excluding
agriculture. But if we are passing an ordinance now to assume the 2015 rent levels,
then any changes after that could have impacts where if somebody is filing for the
application now, but later on we make the change. So we would ask that the change
be in the subsequent year, meaning September 30th of 2017 if we are changing the
rent level or the methodology by which participants participate in the program.
Council Chair Rapozo: Okay. This would be fine?
Mr. Shimonishi: Right.
Council Chair Rapozo: 2015 would be okay? We would be able to
implement and do it. But if we went to some other methodology, you are asking it to
be postponed?
Mr. Shimonishi: Correct.
Council Chair Rapozo: It would be better to just go ahead and at least
move this out, fix your website so the people will know, right, with the 2015 numbers,
and then work for something for the next year?
Mr. Shimonishi: Correct, because otherwise you have two (2)
different rent levels with within the same year and someone would say"I applied this
time and got this based on what was in effect, but now you have changed the rules so
to speak."
COUNCIL MEETING 51 JULY 6, 2016
Council Chair Rapozo: Got it. Councilmember Yukimura, do you
have a question?
Councilmember Yukimura: Yes. Well, I think you are just saying that
there was talk last time about using new approaches and if we do, we just do not want
to apply it to next year because the deadline is September?
Mr. Shimonishi: Correct, and obviously there needs to be a lot
more input from the Housing Agency and analyses of what that methodology or rent
level is set at.
Councilmember Yukimura: If we do any further work on this particular
section of the law or the Code, we should do it for future tax years, not for this year?
Mr. Shimonishi: Correct. Right
Councilmember Yukimura: Alright. I think that is very wise advice.
Thank you.
Council Chair Rapozo: Are there any other questions for Ken? If the
not, thank you.
Councilmember Yukimura: Oh, yes.
Council Chair Rapozo: Go ahead.
Councilmember Yukimura: Can you send us the data or maybe you gave
it to us already that shows us the drops and different things that happened to try to
address it? You said it went from one thousand three hundred (1,300) to...
Mr. Shimonishi: Maybe the last three (3) years?
Councilmember Yukimura: It has only been in effect for about what,
four (4) years?
Council Chair Rapozo: It would have been three (3) years probably.
Mr. Shimonishi: I can check with Real Property Tax.
Councilmember Yukimura: Ever since it has been in effect would be
interesting if you have that data, because you do not think it is been in effect that
long.
Mr. Shimonishi: Okay.
Councilmember Yukimura: Thank you.
Council Chair Rapozo: Thank you, Ken. Anyone else wishing to
testify? If not, we will call the meeting back to order. Is there further discussion?
Councilmember Kagawa.
COUNCIL MEETING 52 JULY 6, 2016
There being no objections, the meeting was called back to order, and proceeded
as follows:
Councilmember Kagawa: Thank you, Council Chair Rapozo. This issue
was brought up three (3) years ago. I remember one (1) of the workers at the Transfer
Station brought it up to me and told me about what was happening and that he was
watching the meetings. He said, "If I have to reduce my rent, then we are going to
drop out because we like this tenant and we want to take care of this tenant. But
where do you see deflation with rental market? That was the expectation. If you
want to remain in the affordable housing, to get that tax credit, then you have to
actually reduce your rent. We had Councilmembers here saying "if we do not follow
the guidelines, we are going to be hurting the affordable people." But do you know
what we did with that person? I just saw him again just the other week and I said,
"We are going pass a Bill right now." He said, "No. Once I got out, what happened
was I told my tenant I was going to raise it, they moved out," and they have a new
tenant that is paying the market rent. What we did was we actually kick out an
affordable renter. Whoever made the statement about "if we do not follow, we are
going to hurt them," well, the real-life story about that is we should have listened to
the public and we should have not listened to the Administration's recommendation
that deflation is acceptable and that it would not hurt the program because what it
did was it actually hurt people out there. It kicked out people. I think sometimes we
listen to the Administration, yes. But in that case, that was bad advice because we
have to look at the commonsense theory. Are rents expected to go down in this market
that we have? It is not realistic. It is not at all. It is only going to go up. When we
say "Well, let us try to follow the federal guidelines and it goes down," I will never
listen to that advice from the Administration again. That is poor, not practical logic,
and it really hurt people out there. So whatever we can do to try and increase the
number of the affordable rents. We are only talking about three dollar ($3) difference
in the tax rate. If that rental unit is worth three hundred thousand
dollars ($300,000), the difference in three dollar ($3) is nine hundred dollars ($900).
When you talk about rents from renting for one thousand five hundred
dollars ($1,500) to two thousand dollars ($2,000), it is a lot easier for the person if he
can find the available renters at two thousand dollars ($2,000) to just rent at two
thousand dollars ($2,000) and forget it. A lot of times we act like the three dollars
($3) is a big deal, but actually the big deal is how much the tenant pays each month.
That is the big deal. If they are paying one thousand dollars ($1,000) or one thousand
five hundred dollars ($1,500), that means a lot more to them then the taxpayer paying
three dollars ($3) more on their market value. I think we just have to be really careful
and the commonsense things like expecting renters in the program to be okay with
reducing their rent and not affecting the program, to me, is just totally inaccurate. I
wish we could have played that part back because the Administration really missed
the mark with their statements at that time. Thank you, Council Chair Rapozo.
Council Chair Rapozo: Councilmember Yukimura.
Councilmember Yukimura: This Bill does exactly what I think
Councilmember Kagawa is talking about. It does not allow the rents to go down. It
does not follow HUD. We are setting it at last year's so that we can keep the rents
stable. I think we are all in favor of that. I want to thank Tina Sakamoto who has
just been so conscientious about this issue because she knows how many people are
being affected by it and I want to thank Council Chair Rapozo for introducing the
Bill. I think Tina's point about raising it to one hundred percent (100%) of the median
COUNCIL MEETING 53 JULY 6, 2016
income means that there is a possibility, and that is what I hope we will address in
the future that the landlords will raise their rent to the one hundred percent (100%)
median and that some of the people lower will have a problem. So it is a tricky thing.
I think our goal is really clear about trying to make more affordable rental units
available, and I am very happy to vote for this Bill and very grateful to the people
who caused its introduction.
Council Chair Rapozo: Thank you. Are there any other comments?
Ken.
There being no objections, the rules were suspended.
Mr. Shimonishi: Ken Shimonishi, Director of Finance. In
terms of number of participants, in Fiscal Year 2014, there were nine hundred
thirty (930) participants; in 2015, one thousand three hundred three (1,303)
participants; and in 2016, one thousand two hundred (1,200) participants. So it did
go from nine hundred thirty (930) participants up to one thousand three hundred
three (1,303) participants, and then a slight decline.
Council Chair Rapozo: That was probably attributed to the extension
of time, right?
Mr. Shimonishi: The extension of time happened for the one
thousand two hundred (1,200) participants.
Council Chair Rapozo: Oh, okay.
Mr. Shimonishi: The last year.
Councilmember Yukimura: It is still significant.
Mr. Shimonishi Yes.
Council Chair Rapozo: Thank you, Ken. It is a silly question, but I
have to ask. Do we try to find out why they left the program? I do not expect you to.
Mr. Shimonishi: Not to my knowledge, no.
Council Chair Rapozo: Just thinking out loud, if we could send I do
not know, twenty (20) or thirty (30) or do a random mail out with a real brief
questionnaire with some multiple choice questions of why they left the program just
so we can get an idea, if that is possible?
Mr. Shimonishi: Okay, thank you.
Council Chair Rapozo: Councilmember Yukimura.
Councilmember Yukimura: I just want to concur with that request. I
think having good data would really help us make policy. Thank you.
There being no objections, the meeting was called back to order, and proceeded
as follows:
COUNCIL MEETING 54 JULY 6, 2016
Council Chair Rapozo: Any other discussion? No? Okay. Let me just
say I think when we look at the affordable housing issue, and I want to echo
Councilmember Yukimura's recognition of Tina Sakamoto because she has been a
wealth of information. She has done a lot of research and she is in community a lot.
She has spoken to those landlords that have left the program. She has spoken to the
landlords that are thinking about leaving the program. I think that is a valuable
resource. Thank you, Tina. This is a multi-pronged approach. I agree that we need
to move this up to one hundred percent (100%), but we cannot move this to one
hundred percent (100%) until we have another program in place that will take care
of the lower income. We cannot abandon those people because moving this to one
hundred percent (100%), I believe, we may even get more participants, yes, as far as
landlords/owners, but we would lose or potentially lose a lot of people that need
housing. We have to be able to offer that segment some relief as well whether it is in
the way of a much larger tax break or some kind of incentive. We talk about
stakeholders and that is why I asked Ka`aina earlier who he met with. No offense to
the professional contractors and realtors, but the stakeholders are the people that are
affected by the program. Those are stakeholders too. To just talk to one (1) side to
validate your position is not a true and accurate discussion. Stakeholders is
everybody. If I am sitting as the Housing Agency or even Ken listening to this, I
would definitely ask Tina and Anne to participate in the discussions because they
have been there, done that. I think that is where we get the best information. My
point is that it is multi-pronged. The discussion that we had earlier today addresses
inventory. Yes, if we are going to address inventory and we have the tax breaks for
the one hundred percent (100%) and if we have programs for the eighty percent (80%)
and below, then I do not have a problem supporting an inventory bill. But I do not
want to support an inventory bill, call it an affordable housing bill, and do not impact
affordable housing. I think this will at least keep the people in the program. This
will help keep the people in the program. Again, with the costs increasing, I do not
know if it is good enough, but I think it is best that we can do right now. I think that
we have to start working on some measures and incentives to even add to the
affordable housing participants in all income levels. So that is the challenge for us.
I see Councilmember Yukimura thinking hard already about how we are going do
that. Really, it is a difficult balance, but we cannot move the scale up to one hundred
percent (100%) and let the eighty percent (80%) and below fall off. Then they become
another statistic, near homeless or houseless or crowding, and all of that is a
byproduct of lack of affordable rentals. I look forward to that discussion. The motion
is to approve. Is there any further discussion? If not, roll call.
The motion for adoption of Bill No. 2633, Draft 1, on second and final reading,
and that it be transmitted to the Mayor for his approval was then put, and carried
by the following vote:
FOR ADOPTION: Chock, Hooser, Kagawa, Kaneshiro,
Kuali`i, Yukimura, Rapozo TOTAL — 7,
AGAINST ADOPTION: None TOTAL — 0,
EXCUSED & NOT VOTING: None TOTAL — 0,
RECUSED & NOT VOTING: None TOTAL — 0.
Mr. Sato: Seven (7) ayes.
COUNCIL MEETING 55 JULY 6, 2016
Council Chair Rapozo: Thank you very much. That concludes today's
formal agenda. We will reconvene at 1:30 p.m. for a public hearing. At this point,
the meeting is adjourned.
ADJOURNMENT.
There being no further business, the Council Meeting adjourned at 11:25 a.m.
Respectfully submitted,
SCOTT K. SATO
Deputy County Clerk
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