HomeMy WebLinkAbout04/08/2020 Housing & IGR Committee minutes MINUTES
HOUSING & INTERGOVERNMENTAL RELATIONS COMMITTEE
April 8, 2020
A meeting of the Housing & Intergovernmental Relations Committee of the
Council of the County of Kauai, State of Hawaii, was called to order by
KipuKai Kuali`i, Chair, at the Council Chambers, 4396 Rice Street, Suite 201, Lihu`e,
Kauai, on Wednesday, April 8, 2020 at 9:00 a.m., after which the following Members
answered the call of the roll:
Honorable Mason K. Chock
Honorable Felicia Cowden
Honorable Luke A. Evslin
Honorable Ross Kagawa
Honorable KipuKai Kuali`i
Honorable Arryl Kaneshiro, Ex-Officio Member
Excused: Honorable Arthur Brun*, Ex-Officio Member
Minutes of the February 26, 2020 Housing & Intergovernmental Relations
Committee Meeting.
Upon motion duly made by Councilmember Chock, seconded by
Councilmember Cowden, and unanimously carried, the Minutes of the
February 26, 2020 Housing & Intergovernmental Relations Committee
Meeting was approved.
The Committee proceeded on its agenda items as follows:
Bill No. 2774 A BILL FOR AN ORDINANCE AMENDING CHAPTER 7A,
KAUA`I COUNTY CODE 1987, AS AMENDED, RELATING TO
THE HOUSING POLICY FOR THE COUNTY OF KAUA`I
(This item was Amended then Deferred to the 1st
Committee Meeting in May 2020.)
Committee Chair Kuali`i: We have received three (3) or four (4) pieces of
testimony and I am just reading it now. Can I get a motion to approve, and a second?
Councilmember Chock moved for approval of Bill No. 2774, seconded by
Councilmember Kagawa.
Committee Chair Kuali`i: Members, my goal for today will be to
entertain as many floor amendments as we have prepared, one-by-one. We can ask
questions of the Housing Director and each other, and possibly vote. If for some
reason we are not ready to vote on the specific amendment, we can withdraw it and
move forward. After we have completed that, I would like to see where the Committee
is at in terms of moving the item forward or whether a deferral to possibly the end of
next month may be warranted to give the public and Councilmembers additional time
HIR COMMITTEE MEETING 2 APRIL 8, 2020
to work on further amendments or to digest the-new draft of the Bill should any
amendments pass. Members, at this time, do we have any general-type of questions
for our Housing Director. If so, I can suspend the rules for that. Okay, I will suspend
the rules and we have a question from Council Vice Chair Kagawa.
There being no objections, the rules were suspended.
Councilmember Kagawa: Adam, has this Housing Bill been run by
many of the developers and experts that for years have helped us come up with these
types of bills? I am talking about the large contractors like Shioi Construction, Tom
Shigemoto from Alexander and Baldwin, Inc. (A&B), et cetera. Those types of people?
Have we invited those types of people to look at this? I am hearing that this is a
terrible Bill. I have heard that it is going to work backwards and do more damage
than good. I do not like to hear those types of comments. I really think if we include
the stakeholders and do the legwork prior to passage, it leads to better results. We
should not leave them out and try some brand new...a lot of people have new ideas
and a lot of people that moved here in the last year have good ideas, but not all of
them are realistic. I just want to hear whether you invited the longtime stakeholders
that have been here through many generations, that know the island well.
ADAM P. ROVERSI, Housing Director: Aloha, this is Adam Roversi, the
Housing Director. Committee Chair Kuali`i could probably provide more detail, but
I am aware that he has invited in writing, most of the folks that were on all past
Housing Task Forces to participate, provide comments, and provide opportunities for
all of them to have one-on-one meetings with himself, Council Chair Kaneshiro, and
myself, if they had any comments or questions on the proposed amendments to the
Housing Policy. To date, Tom Shigemoto took that offer up and a specific meeting
was held with him. He is now retired, but he used to be with A&B. Chair Kuali`i can
clarify, but to my knowledge, none of the other developers or organizations other than
the Kauai Board of Realtors have accepted the offer and requested any meetings or
conferences about this proposal.
Councilmember Kagawa: Are you not concerned that I am hearing these
comments? As Mayor Kawakami's department head, are you not concerned that I
am hearing that this Bill will work backwards? We are trying to get affordable
housing going, if this is going to lead to less development and less affordable housing,
I would think you would be concerned.
Mr. Roversi: I think there are multiple perspectives on this
Bill. Broadly speaking, the development community would like there to be no such
thing as a Housing Policy and inclusionary zoning. They would like it to go away. It
has been proved nationally or represented nationally as it is adopted in multiple
states around the country that it can succeed in spurring development of affordable
housing. I think we have an agreement to disagree over some of the policy
implications of the specific points within this Bill.
HIR COMMITTEE MEETING 3 APRIL 8, 2020
Councilmember Kagawa: Given that we now have COVID-19 hitting
the state, would it not be reasonable to wait a month and go and get all of these
developers...maybe they misunderstand the intention of this and you as the Housing
Director can settle their fears so that we are not getting these types of E-mails prior
to a vote. These are not dirty men. These are men that we rely on for good
information that have concerns. I can give you all of the names. I do not want to do
it online.
Committee Chair Kuali`i: I would like to jump in at this point. I will say
to Council Vice Chair Kagawa, I will be happy to take all of the names that you have
of those with concern and I will be happy to work with the Housing Director.
Councilmember Kagawa: So what is the rush?
Committee Chair Kuali`i: We are not rushing.
Councilmember Kagawa: Okay.
Committee Chair Kuali`i: We are just working on this slowly in
Committee. We are adding amendments if they are needed. In the end, this entire
Bill is a package of amendments. It will not come out of this Committee until it is
ready and complete. That may take a couple more months. I do want to hear from
anyone...especially if you are hearing from someone that we are not hearing from, I
am happy to take one-on-one meetings with them or take anything in writing from
them. Like Director Roversi has said, we did hear from Tom Shigemoto. We have
not heard from Shioi. I heard you mentioned that name. I do not know of the twenty
plus (20+) names that were on priory advisory committees or task forces with former
Councilmember Yukimura and Councilmember Brun, is represented by Shioi. If you
have a name and contact, I will be happy to contact them or anybody else.
Councilmember Kagawa: I would include the Contractors Association of
Kauai, too. They branch out into many other very intelligent people in the housing
industry.
Committee Chair Kuali`i: Okay, thank you. Any other broad questions
for Director Roversi. Councilmember Chock.
Councilmember Chock: Thank you. I appreciate the approach for us
to take what amendments we can and then to also take our time. There is no rush
here. We know that we want to get our Housing Ordinance together, but I have heard
some concerns as well. I think what might be helpful...and having the time that we
have to get clarity on the broad approach. I think this Bill really targets well. Some
of the questions that came up on first reading was how are we looking at the
middle-housing and how are we addressing that. Some of those questions were
brought to light. I am wondering if it is worth us stepping back and having that
discussion, as we cannot have it in-person, we could request it in writing. What are
HIR COMMITTEE MEETING 4 APRIL 8, 2020
some of those gap-filling measures that might be addressed in future amendments to
this Housing Ordinance that we said we would do in pieces? I think if we can start
answering some of those questions we might feel more comfortable as a whole, which
includes some of the stakeholders that Council Vice Chair Kagawa mentioned. I am
just throwing it out there. I hope we can get a little more detail on what is
forthcoming. Thank you.
Committee Chair Kuali`i: I think that the Housing Director can add
something, because I was reading over the minutes of the last lengthy meeting where
we went through all of the amendments, and also having just reviewed the budget
over the weekend, this is only part of the overall housing amendment. Yes, the focus
is on the eighty percent (80%), one hundred percent (100%), and one hundred twenty
percent (120%). There was a one hundred forty percent (140%), which was equivalent
to the market rate, so we are removing it. The gap housing that you are talking about,
may be in that range, or a little higher than that. I do believe in the current budget
there is an infusion of funding to start addressing some of that. The policy...Housing
Director Roversi, maybe you can add to what I am trying to say.
Mr. Roversi: I would insert generally the Housing Policy
that is before you is entirely focused on serving the gap group as it is defined in the
Housing Policy. The current Housing Policy that we have in action is designed to
serve people making between eighty percent (80%) and one hundred forty
percent (140%) of the area median income (AMI). The amended Policy that is in front
of you is designed to serve people making eighty percent (80%) to one twenty
percent (120%) of the AMI as is recommended in the Nexus Report that was
contracted by the prior Housing Task Force, that was headed by Councilmember
Brun. The whole focus of this Policy is to try to incentivize and create that gap group
housing. The low-income members of our community are addressed by projects and
developments that are outside the scope of this Policy. Those are the sorts of projects
that the Koa`e...a better example would be the Pua Loke rental project that we are
working on right now. That project is developed using a pool of Federal money that
we get on a three-year cycle and low-income Federal tax credits. Connected to those
sources of Federal funding are specific low-income requirements. Those projects have
to serve the low-income segment of our population making...generally focused on
people making sixty percent (60%) of the AMI. Our Federal programs and the source
of projects that we develop directly, because of the source of financing, are not allowed
to serve the gap group of our community. That is what this Policy that is in front of
you is supposed to be doing...providing houses for the gap group defined as eighty
percent (80%) to one hundred twenty percent (120%) of the AMI.
Committee Chair Kuali`i: In general, we are basically trying to lower
the requirements and incentivize the development community to develop, because
they have not been for many years. Not anywhere near in the volume that we need,
correct?
HIR COMMITTEE MEETING 5 APRIL 8, 2020
Mr. Roversi: That is exactly the purpose of the various
exactions that we put into this plan. We want to carve out specific areas within the
town core design districts that were identified in the General Plan and in areas that
are specifically zoned for high-density development to essentially cut the
development community loose in these specific areas. We are telling the development
community that in these areas that we have identified, we are going to remove the
burden of a specific workforce housing assessment and incentivize you, cut you loose,
to build as much and as many houses as you can in these specific areas and these
specifically-zoned types of properties.
Committee Chair Kuali`i: Thank you. I see that Councilmember
Cowden has a question.
Councilmember Cowden: I have a couple building on right where you
were at. When we are talking about the AMI, something that causes me to question
and pause is right now we are in this COVID-19 economic shutdown and our
unemployment is off the edge. We have so many businesses that are volatile. I am
wondering when we are tying everything around AMI, what happens for that
developer who might start thinking they can building something and discovering that
the AMI six (6) months from now has dropped by thirty percent (30%). Have we given
that thought?
Mr. Roversi: The AMI is established by the Federal
Department of Housing & Urban Development (HUD). They send out a new number
once a year. They do not change it throughout the year. The recent numbers were
just released on April 1s1. The Housing Agency uses the HUD-released numbers to
develop Kaua`i's specific chart that will be posted on our website. Those numbers will
be in effect until April of 2021. If a developer comes, hypothetically, comes in and
wants to do...they want some certainty and predictability in what they are doing
moving forward, we would develop a housing agreement with them, setting out a
specific set of requirements based on the current AMI figures. Those do not change
once the agreement is entered into. They have certainty and understand what is
happening. The sale prices that the developer could offer their homes for, will not be
drastically reduced or changed as a result of people's loss of income. Certainly there
is the reality of whether people are going to be able to afford to purchase those houses
if they do not have jobs. It does not leave developers in a world of uncertainty. Those
Federally-defined figures are relatively steady year-to-year.
Councilmember Cowden: Thank you for that. If I am hearing you
correctly, by the time they put something in for planning and finish it, it typically
might be two (2) to three (3) years. Does that sound correct, if they are doing a
development?
Mr. Roversi: It certainly could be.
HIR COMMITTEE MEETING 6 APRIL 8, 2020
Councilmember Cowden: You are saying that if they started in March
of this year, they would be set at this year's AMI which is already static. Three (3)
years from now, their price point will be at the same AMI that they started at?
Mr. Roversi: More or less that is correct. Before the
building permit is given to the developer to start doing anything, they would need to
enter into a housing agreement with the Housing Agency that is approved by Council,
and that agreement would define the scope of their project moving forward. They are
aware of what they are facing before they have their building permit in-hand, and
those numbers do not change, unless Council changes them with drastic changes in
circumstances. A housing agreement is an agreement between two (2) parties, so if
it is necessary to change the agreement, it can always be changed. Generally
speaking it is set.
Councilmember Cowden: That was concerning to me. On the one hand,
for the builders, and on the other hand, when we are likely to see a remarkable drop
in people's capacity to buy on-island, I get a little nervous. People will not be able to
even buy these houses. That is a concern. I have one other point. When we see these
areas that developers can develop as they like, that would be the Rice Street area in
Lihu`e, Koloa and Kalaheo in an area that is mixed-use, is that correct?
Mr. Roversi: Correct. There is also a separate
exemption...there are two (2) types of exemptions. There is an area-based exemption,
which is focused on the specific town core development districts that you just listed
and as we previously mentioned, it is our assumption and hope that as the various
area plans for the island are finalized; for example, right now they are finishing the
West Kauai Plan that will have additional town core areas identified and mapped
out so it is our hope that those areas could then be added to this list of exemptions.
Separately from those area-based exemptions are the density-based exemptions, for
any areas on the island that are zoned R-10 or higher. Those are often duplicative of
the town core exemptions, but there are many of them that are outside those specific
town core mapped areas. That is sort of an additional level of incentivized area for
development outside of the town cores that you just mentioned.
Councilmember Cowden: Okay. You will see one of these amendments
is from me, trying to do a little bit of an adaptation, because I see challenges in these
areas that are chosen. There is one in the Lihu`e area, at least currently, we have
limited additional water. I think we have water for two hundred fifty (250) maybe
three hundred (300) units on the outside. That could be a challenge in that area. The
best I can tell, Kalaheo and Koloa would have wastewater challenges. My
amendment is trying to address that. If they cannot by nature reach what is needed,
because there is no sewer system, maybe we need to take a good look at that. I am
happy to hear that there are other communities that could maybe be added, like in
Kekaha for example.
HIR COMMITTEE MEETING 7 APRIL 8, 2020
Mr. Roversi: I know that there are pending proposals for
Waimea, Hanama`ulu, and I believe Kekaha that are already before the Planning
Commission or before the Council for review and approval.
Councilmember Cowden: I have not seen it. Have I? I do not think so.
I have not seen it.
Mr. Roversi: It could be at the Planning Commission.
Councilmember Cowden: Okay, thank you.
Committee Chair Kuali`i: Council Vice Chair Kagawa.
Councilmember Kagawa: Adam, due to COVID-19, I am hearing that
our building inspectors are only allowing County and State projects to go forward
with plans being examined and inspections. All private projects have been told to
shut down, including single-family homes which fall under our housing problem. Do
you have a plan to address what we do after we start taking in private work again?
All of our workers are getting paid, but they are all not working.
Mr. Roversi: Building inspectors are really outside of my
kuleana. I hope that as soon as the state of emergency is concluded that the Building
Division and the Planning Department can get back to work as fast as possible so
that we can spur as much construction work as we possibly can, because that is going
to be key to our economic recovery in my opinion. Both affordable housing, or
construction in general, will be really important to have it start back up again so that
we can economically recover from what we have been facing for the last month.
Councilmember Kagawa: I do not know why we are stopping
single-family homes from being built. A lot of people are taking this opportunity to
fix up their homes. I believe we are adding to the affordable housing problem by
delaying single-family homes. We are still inspecting State and County projects.
That is not a problem. State and County projects, go ahead, you can move forward.
If you are private, you are out. I do not get it. Our guys are getting paid to stay at
home. The second question I have is, if you lower the AMI and you reduce the
percentage requirements...you lower the AMI and you have to reduce the percentage
requirements that developers can spread out the subsidy to more market units...so
you raise the percentage of affordable units and you lower the AMI means you have
to make the market prices higher, correct? In order to make up...no one is going to
do anything to lose money or break even. They want to make money. Is that not
going to happen? If you raise the percentage of affordable units and lower the AMI.
That is what your Bill does.
Mr. Roversi: To clarify, we have not raised the percentage
of affordable units in any of the amendments. It is the same as it was before. We
HIR COMMITTEE MEETING 8 APRIL 8, 2020
have also provided numerous exemptions that essentially set large parts of the island
outside of this Policy.
Councilmember Kagawa: So my argument is not true? Is it false?
Mr. Roversi: There are no increases in workforce housing
requirements in this Policy for residential development.
Councilmember Kagawa: Okay, my next question.
Mr. Roversi: The reduction, I think you are referring to the
elimination of the one hundred forty percent (140%) limit as part of the workforce
housing equation. I would offer that that is the recommendation that came out of
the economic analysis of the Nexus Report. They found that the one hundred forty
percent (140%) units were effectively the same price as market-rate units. Asking
the developer to do that and create one hundred forty percent (140%) AMI-units was
effectively asking them to do nothing that they were not already going to do. That
was discovered with the Kohea Loa development in Hanama`ulu in which the one
hundred forty percent (140%) units were higher priced than the market-rate units
that D.R. Horton was developing on its own. I think that is sort of the origin of that
recommendation in the Nexus Report.
Councilmember Kagawa: That goes back to why nothing has been
developed for thirty (30) or forty (40) years. Of course it is not going work.
Committee Chair Kuali`i: That is why we are trying to change it.
Councilmember Kagawa: If you pass this Bill, I hope there is a report
card to show whether you were successful or not successful. I am saying that if you
do not work with the developers now, prior to passing this Bill, I think you will all
get"Fs." The word I am hearing is that this is not going to work. I have one additional
question for you. This is the main problem. You exempt multi-family development
or condominiums in town cores from building affordable units. That is crazy. You
could have one million dollar ($1,000,000) units at higher density and not have to
provide any affordable units or pay any in-lieu fees. Previous to my statements, you
praised that item. You can build million dollar units there and not pay or do any
affordable units. That is crazy. What is your response to that?
Mr. Roversi: My response is that the economic analysis in
the Nexus Report concluded that the typical apartment buildings that are built in
those types of areas are by default, by their structure and nature of where they are
located, generally serve the workforce segment of our population. The expectation is
that they will not be million dollar apartments on Rice Street. That is exactly why
we put a ten (10) year sunset clause in the proposal so the Council will be required to
come back and look at this Bill as a report card to see if it has achieved what we had
hoped and planned that it would achieve. If not, you will be required to look at it
HIR COMMITTEE MEETING 9 APRIL 8, 2020
ten (10) years from now and make an educated analysis of the success or failures in
what we have done. We can either continue as it is or make appropriate changes.
Councilmember Kagawa: I am not talking as a layperson. I am
regurgitating what I am hearing from long-time experts in the construction and
development fields. They are telling me that this Bill is crazy. I do not hear that too
often. I am hereon my eighth year. Thank you.
Committee Chair Kuali`i: Thank you Council Vice Chair Kagawa.
Adam, can you add the point about the density "at or above" and how it is not
unreasonable to say that in these districts, we are going to get smaller units, more of
them, at a lower price, and that is what we need for our people who need affordable
places to purchase or even to rent?
Mr. Roversi: Sure. Let us use the Lihu`e Town Core area
as an example. In order to qualify for the exemptions that is in the currently proposed
amendments, a developer who wanted to build on a lot in Lihu`e would have to build
at the maximum density on the lot. A hypothetical lot in Lihu`e might have an R-40
density. In order to qualify for the exemption, they would have to build at least
forty (40) units. When you are building affordable units, there are possibilities
through cooperation with the Housing Agency to get variances to even increase the
density on a project like that if you are serving or specifically developing identifiable
affordable units in cooperation with the Housing Agency. That is where the "at or
above" language comes in. There is a possibility for certain types of projects that you
could exceed the forty (40) unit density on a lot. If you presumed to qualify on a lot
in Lihu`e let us just say for the sake of easy math...that they have a one (1) acre lot.
There are not many lots that are actually a full acre, but if they had a one (1) acre lot,
they would be building a minimum of forty (40) units to qualify for this exemption.
They have a height requirement, so we would presume, in order to squeeze forty (40)
units on an acre with parking, under the height requirements, they would need to be
fairly small units. One-bedroom or studios, at the most two-bedroom units, and the
analysis in the Nexus Report having read through it and based on my experiences, I
personally agree with it and as a policy, those units would most likely, by default, be
priced at a level that is affordable to the school teachers, firemen, and police officers,
who are in the gap group of our community that we are trying to serve with this
Policy.
Committee Chair Kuali`i: Thank you. Before we go further with any
other questions, the only other comment that I wanted to make...when there was a
question about why the County's projects can move forward, I would only say that I
heard the Mayor make an announcement and I am not sure if it was a part of his
daily announcement, that he felt it was even more important now for the County to
continue with our affordable housing projects, because he felt there would be more
people in dire need of housing. Councilmember Cowden, did you have a question?
HIR COMMITTEE MEETING 10 APRIL 8, 2020
Councilmember Cowden: I do have a question. I want to say that I
really appreciate all of the work that has gone into this. I wish that it was true that
we could achieve what is in here. I did not talk to twenty (20), but I did reach out to
eight (8) different organizations on-island that are typically the builders. I did not
find one of them that felt this was an improvement over existing policies. Most of
them, in fact all of them, had very strong adverse perspectives. As I mentioned before,
three (3) friends that have houses here and live here part-time for many years that
are developers and do affordable housing projects in other parts of the country and in
other communities...I have brought to them our Housing Policy before...I have driven
them to look around at ideas I had. I brought this back to them, because they were
all here for a couple of months recently. They said this is even worst. I had
eleven (11) out of eleven (11) say they could not build within what is described here.
One of them has a plan for something in Koloa. There is one plan existing for
something in Koloa. I should say eleven (11) out of twelve (12). Can you point me,
even if you send it privately or through E-mail, to let me know who I could talk to
who does support this, who I could talk to in order to get confidence that they could
build something. To those that I have reached out to, that I can think of, they are all
saying "No." If you could pass me along to those people, that would help me gain a
little confidence.
Committee Chair Kuali`i: Adam, before you go further, I want to ask
Councilmember Cowden also, it would be helpful to us who are working on this, to
know what specifically is wrong with the Bill. What inhibits the eleven (11) out of
eleven (11).
Councilmember Cowden: Okay.
Committee Chair Kuali`i: A lot of times, we just hear general objections.
That does not help us when we are looking at a package of possibly twenty (20) or
thirty (30) amendments. The intent of this like has been said, is to lessen
requirements or make it easier. If people are saying that something in this Bill
specifically makes it harder, then we need to know specifically what that is.
Councilmember Cowden: They are very specific. Do you want me to
mention it now?
Committee Chair Kuali`i: You can mention it now or at least one
example.
Councilmember Cowden: One is the thirty percent (30%) inclusion.
Almost anywhere that has inclusionary zoning that is just near impossible to achieve
without having to build mansions to be on the other end of it. Another one is bring
down the percentage of AMI and lowering it heavily in that eighty percent (80%)
range. Even though I want that to be the case, when it goes even higher than that,
and now when the AMI might be dropping, that takes it off the table. As I said before,
in Kalaheo and Koloa, when there is no sewer there to match the property, it is very
HIR COMMITTEE MEETING 11 APRIL 8, 2020
difficult to do the detention basin and the wastewater treatment, there are issues
with having to even put a sewer treatment plant inside that dense area, how that
impacts neighborhoods is not so easy. In terms of water, that court case was deferred
to yesterday for water for Lihu`e. It has been deferred twice. I have been attending.
We still have a court case going, even allowing this eighteen (18) inch water pipe to
come into the Rice Street area. If for some reason that is not allowed to happen, based
on what is going on with Wailua, that is going to give us a lot of capacity issues that
will not allow us to move forward. Those are problems. If we do not have the water
and we do not have the sewer...
Committee Chair Kuali`i: The water and the sewer, none of that is in
our amendments here.
Councilmember Cowden: It is when you have to maximize those spots
or when we have decided that those places that we will be able to build it is right here
on Rice Street. You put a couple buildings in and you hit that maximum already.
Committee Chair Kuali`i: Right. I mean it does lend us to the idea that
this part is only one part of the solution. Obviously, when water is maximized and
we can no longer build in Lihu`e then we have to deal with the water issue. The hope
is that the Department of Water is already working on that. Everybody knows it.
Councilmember Cowden: That is what I am saying. I am participating
in court and I go to the Board of Water Supply meetings. I look at how much expense
is going out there. I just have not seen what gives me confidence. I want what is
proposed to be successful. I am not a developer. When I am talking to developers,
they have stepped through it with me. I can do that...
Committee Chair Kuali`i: Please provide that.
Councilmember Cowden: Okay, sure.
Committee Chair Kuali`i: Anything from Director Roversi?
Mr. Roversi: I will just broadly respond, because there
were a lot of points to that discussion that really do not have much to do with the
Housing Policy that we are specifically talking about here. I find it hard to imagine
a developer characterizing this proposal as worse than the existing policy in that it
has not increased the workforce housing assessment on any development in any way
or in very minor ways at best. What it has done is provide significant exemptions
from the Housing Policy, specifically so that developers can build outside of the
constraints of the existing Housing Policy. I want to address the thirty percent (30%)
number. I think I said this at every hearing we have had. It just gets repeated over
and over again that we are imposing a thirty percent (30%) requirement. That is not
the case. The thirty percent (30%) number in our Housing Policy is a starting point.
There are then an array of incentives that reduce that number. The typical
HIR COMMITTEE MEETING 12 APRIL 8, 2020
development and the typical housing agreement that we end up creating usually ends
up with a number around fifteen percent (15%). This is in line with all other counties
in Hawaii, as well as national standards. The "boogeyman" that we are imposing a
thirty percent (30%) requirement on all housing developments and that is financially
infeasible is essentially false. Most, if not all projects can take advantage of some of
the various incentives that are in the Policy and drastically reduce that number. I
just did a housing agreement last week and their workforce housing assessment was
fifteen percent (15%) taking advantage of two very simple incentives that exist in the
current policy. We are not imposing a thirty percent (30%) requirement on the vast
majority of projects. The notion that nothing is getting built under the current
Policy...and this is worse...that is an open question. This Policy began in 2008, which
is when the housing market collapsed. You could not finance projects, you could not
get a loan for a project, and there was no building going on of any sort. At least for
some period of time, I would argue that the lack of housing development had very
little to do with this Housing Policy and more to do with macroeconomic systems and
the collapse of the housing bubble. To what extent the Housing Policy contributed to
a lack of development or not, we could argue about that for a long time. I am getting
a little sidetracked. Even in the current environment, under the current Policy, there
are several projects moving forward. The developers come and talk to me and they
represent that they are ready and willing to move forward with the workforce housing
exactions under the current Policy and it is financially feasible for them to do so.
Some examples are the Kohea Loa development in Hanama`ulu, that one is being
developed by D.R. Horton under the current Policy with the financial implications of
the current Policy, and the Kealia Mauka subdivision, which is proposed on the hill
above Kealia Beach. They have been in discussions with us and appear to be ready
and willing to meet the requirements of the existing workforce housing policy. The
lack of development over there has much less to do with the Housing Policy and more
to do with traffic requirements and public opposition to the development on multiple
other grounds. The project above the roundabout in Kapa`a.
Councilmember Cowden: Hokua Place.
Mr. Roversi: This one is also held up with the State Land
Use Commission and other areas, has also been in discussions with us about
providing workforce housing under the current Policy. They do not seem to be
dissuaded or discouraged in trying to push their project forward because of the
financial implications of the Housing Policy. Their problems again are traffic and
other issues outside of this Policy. They have even approached us about wanting to
increase the number of homes sold at the workforce housing prices that are set out in
our existing Policy. I do not think it is correct to state that nothing can be built under
the current Policy. The changes that we made should make it easier, while achieving
some level of accountability for development to provide housing for the people that
the market is not going to provide housing for, if it is just left on its own.
Committee Chair Kuali`i: Council Chair Kaneshiro has a follow-up
question.
HIR COMMITTEE MEETING 13 APRIL 8, 2020
Council Chair Kaneshiro: It is a question, it is also just confirmation.
We hear a lot about the thirty percent (30%). I just want you to confirm...you have
confirmed it before, but I want you to confirm it again, that the current Ordinance is
at thirty percent (30%). Nothing has changed. It is still thirty percent (30%). A lot
of people are saying that the thirty percent (30%) is not working. That is what is in
the current Ordinance. We looked at it and we decided to keep it the same. As Adam
mentioned, based on the incentives that developers can take advantage of, they can
get it down to fifteen percent (15%). We have had people say that it should be lower.
The conversation that we have with them is, if we lower it, are we willing to take out
some of the other incentives. If we lower it to ten percent (10%) or fifteen
percent (15%) and they use the incentives, we will get no affordable housing.. It is
kind of a push and pull on where that number should be. It is a very hard target to
hit. That is just my comment. The thirty percent (30%) has not changed. That has
been in the Ordinance this 2008. If a developer says they cannot build this affordable
housing because of the thirty percent (30%) that is from the original Ordinance, that
means they cannot build now, because it is in the current Ordinance. We are trying
to put in exemptions, building at higher densities, and building in the town cores with
infrastructure. We are trying to make things better. Of course, it is a push and pull.
You are trying to incentivize. Any affordable housing that people are building is going
to hit someone that is trying to develop a property. You want to be able to incentivize
them to build some, but not completely take a loss when building the development.
You cannot completely eliminate it or you will get no affordable housing. It is a very
hard balance. That is what we are going through when we discuss this with others
in the meetings we have been having. We are still trying to figure out that balance.
Where is it? We cannot completely say no affordable housing on the entire island.
That will incentivize everyone to build. We cannot keep the number too high, because
developers will definitely not build. We are trying to find that happy medium. We
may not ever agree on what that number is, but we are trying to get to an area where
we can move forward with something. It has been over ten (10) years with nothing
actually moving forward. I think the whole point of this is to get this on the table to
have these conversations. We are not rushing by any means. We are trying to get
something more concrete and better than what everyone is currently operating with.
Committee Chair Kuali`i: Anyone with questions for Director Roversi?
Councilmember Kagawa: Yes. I do not want to hear that we did not do
anything. We passed a slew of affordable housing measures with Councilmember
Chock and Councilmember Evslin. I reluctantly supported a lot of them. What is the
report on that, Adam? How many houses have been built since we passed those Bills
that Councilmember Chock and Councilmember Evslin worked so hard on? How
many affordable housing projects came up. We did do something. Do you have a
number on that?
Mr. Roversi: You passed that array of five (5) additional
rental units (ARU) ordinances, four (4) months ago.
HIR COMMITTEE MEETING 14 APRIL 8, 2020
Councilmember Kagawa: Correct.
Mr. Roversi: I am unaware of how many ARU building
permits have been issued since then. That is a question that would need to be asked
of the Building Division.
Councilmember Kagawa: Can you please check?
Committee Chair Kuali`i: We can check.
Councilmember Kagawa: Okay.
Committee Chair Kuali`i: Councilmember Cowden.
Councilmember Kagawa: This is dealing with affordable housing. He is
the Housing Director. He can find out. Do your job.
Councilmember Cowden: I appreciate Director Roversi what you just
shared. I know I can call the Hokua Place and Kealia Mauka people. I will do that.
I will reach out to D.R. Horton.
(Councilmember Kagawa was noted as not present.)
Councilmember Cowden: Can I set-up an appointment with you and
one of these people who does not really have a stake in the game, but has really
walked through this with me very carefully? We have looked at those things that can
bring it down to fifteen percent (15%) so that we can really look at it.
(Councilmember Kagawa was noted as present.)
Councilmember Cowden: I want this to work. I do go to the Land Use
Commission Meetings. I have sat with the developer on the new Hokua Place
decision. I am working on this. Can we meet?
Mr. Roversi: I would suggest that since this Bill is now
Council's item and in the Housing & Intergovernmental Relations Committee that it
would be more appropriate to organize that meeting through Committee Chair Kuali`i
and I would be happy to participate.
Councilmember Cowden: Okay, thank you.
Committee Chair Kuali`i: Any other questions for Adam at this time?
We can still ask questions of Adam when we put our amendments forward.
HIR COMMITTEE MEETING 15 APRIL 8, 2020
There being no objections, the meeting was called back to order and proceeded
as follows:
Councilmember Chock: Committee Chair Kuali`i, we do have some
amendments for today, correct?
Committee Chair Kuali`i: Yes we do.
Councilmember Chock: Okay, thank you.
Committee Chair Kuali`i: Are we ready to move forward with those
amendments? I believe we have three (3) amendments and I will ask Council Vice
Chair Kagawa to introduce them all. We will start with Floor Amendment #1 for
discussion to get it in our workload.
Councilmember Kagawa: Where is the floor amendment?
Committee Chair Kuali`i: It is in this document and titled #1, #2, and
#3, and they are all stapled together.
Councilmember Kagawa moved to amend Bill No. 2774 as circulated, and as
shown in the Floor Amendment #1 which is attached hereto and incorporated
herein as Attachment 1, seconded by Councilmember Chock.
Committee Chair Kuali`i: This floor amendment is basically a
housekeeping amendment. It rebalances the percentage of units required at each
income level that is the thirty percent (30%), forty percent (40%) bell-shaped curve.
Paragraph (b), provides some specificity regarding types and income levels of units
provided, as well as addresses the County Attorney's recommendation related to the
regulatory takings law. If I can ask Director Roversi to add anything or to answer
any questions.
There being no objections the rules were suspended.
Mr. Roversi: With regards to the proposal in Amendment
#1, rebalancing the percentage required from the eighty percent (80%) to the one
hundred percent (100%) to the one hundred twenty percent (120%), I think that is a
reasonable accommodation based on comments received from the development
community and the financial implications of eliminating the one hundred forty
percent (140%) grouping. Previously, we had proposed shifting all of those increased
requirements to the eighty percent (80%) level and recognizing that perhaps that is
an unreasonable financial burden. The proposal to shift those percentages is
reasonable and the Housing Agency supports that. I understand the reasoning
behind reinserting the independent analysis assessment for resort projects from a
legal point of view. I do have a few concerns about that and a suggestion to consider
in adding to the amendment. The existing Policy for resort developments does not
HIR COMMITTEE MEETING 16 APRIL 8, 2020
provide for any sort of percentage, like the general thirty percent (30%) requirement
for residential development. It currently requires an independent economist to be
hired to do a project-specific analysis of the project. One of the recommendations in
the Nexus Report for developers who desire certainty and predictability in their
economic decision-making, having that independent analysis that is amorphous did
not provide the necessary predictability. The Nexus Report was suggesting
eliminating that independent analysis and setting up a firm predictable number that
developers could move forward on. That was the origin in coming up with the fifty
percent (50%) number that again, was taken out of the Nexus Report. We could
debate the appropriateness of that number. Reinserting the independent analysis
provision, I understand the reasoning for it, but I wonder if we should perhaps
consider a minimum floor percentage that would be permitted. If a developer, under
the proposed amendment, could choose between the fifty percent (50%) or hiring an
economist to do their own analysis, I am wondering if we should choose a floor to that
independent analysis. Anecdotally, this is where my concern comes from. When the
Coco Palms developers, prior to Greene and Waters, were looking to develop that
property, they hired their own economist to do an analysis of the project. Their
economist concluded that that three hundred fifty (350) unit hotel complete with
restaurants, room service, swimming pools, and amenities, would require somewhere
between zero (0) and sixty-four (64) workforce housing units. Anecdotally, the notion
that a three hundred fifty (350) unit resort hotel would require zero (0) workforce
housing units, that an economist could do an independent analysis and come up with
that conclusion, seems entirely untenable. They ended up taking a number of
thirty (30) between zero (0) and sixty-four (64) just because it was half way. In a
practical matter, that is less than a ten percent (10%)workforce housing requirement
that was imposed on the Coco Palms project. The idea that that sort of resort project
through this economic analysis process could end up with a workforce housing
requirement that would be even less than the minimum workforce housing
requirement that would be imposed on the standard residential development just
does not seem appropriate. That is why I wonder out loud if a percentage lower end
limit could be added to this amendment as well. Thirty-five percent (35%) was the
number on the Nexus Report that they concluded was economically feasible to impose
on a resort development. Those are my thoughts. I think that is the extent, unless I
missed something, I think those are the primary issues in Amendment#1.
Committee Chair Kuali`i: With your comments about the adding of the
floor, are you then just basically saying we should consider a number at thirty-five
percent (35%) or higher, and below fifty percent (50%)? Do you have a
recommendation?
Mr. Roversi: The amendment allows basically two (2)
options. Either the developer goes with the fifty percent (50%) or they do their own
analysis. I am suggesting that if they are going to do their own analysis that there
could be a proviso in that portion, based on an independent analysis provided that
the assessment is not less than thirty-five percent (35%).
HIR COMMITTEE MEETING 17 APRIL 8, 2020
Committee Chair Kuali`i: The number that you are proposing is the
thirty-five percent (35%).
Mr. Roversi: I could provide where that comes from in the
Nexus Report if given a few minutes. I did not just invent that number. That came
from the Nexus Report.
Committee Chair Kuali`i: I knew that it would be some number between
thirty-five (35) and fifty (50), because we did not go through the trouble of going
through the analysis if they could get it below fifty (50). We are saying no lower than
thirty-five (35), but lower than fifty (50). You are saying go all the way down to
thirty-five (35) is what you are recommending. Maybe you have a sense of what it
would cost for them to do that analysis.
Mr. Roversi: I do not have information on what that would
cost. I would imagine that would be fifty thousand dollars ($50,000) to one hundred
thousand dollars ($100,000) to have an economist do an in-depth market study
analysis of the project. I do not know for sure what that is.
Committee Chair Kuali`i: The reduction in the percentage from fifty
percent (50%) to thirty-five percent (35%) that twenty percent (20%) reduction
represents way more than fifty thousand dollars ($50,000) to one hundred thousand
dollars ($100,000), correct?
Mr. Roversi: I am not suggesting reducing the fifty
percent (50%) number to thirty-five percent (35%).
Committee Chair Kuali`i: I know. We are just talking about only when
they want to do the analysis, to add a percentage so that it does not go down to
zero (0) as it happened with Coco Palms.
Mr. Roversi: Correct.
Committee Chair Kuali`i: You are suggesting the thirty-five
percent (35%) and not the forty-five percent (45%) or forty percent (40%)?
Mr. Roversi: I am suggesting that just out of...that was
sort of the low end of the Nexus Report.
Committee Chair Kuali`i: Right. Okay. Thank you. Council Chair
Kaneshiro has a question.
Council Chair Kaneshiro: I just have a suggestion. Perhaps we could
take this amendment as-is and if there are any additions to it, we bring it up another
time. We do not have staff present to draft the amendment.
HIR COMMITTEE MEETING 18 APRIL 8, 2020
Committee Chair Kuali`i: Yes, I know. We are just having the
discussion.
Council Chair Kaneshiro: You can have that discussion and decide on a
number or the language that you want to put forth.
Committee Chair Kuali`i: Yes. Councilmember Evslin.
Councilmember Evslin: Just while we are on the topic of providing
that floor, could we briefly hear from Matt if he has an answer or opinion if that would
pass Constitutional muster or any other legal concerns regarding adding a floor of
thirty-five percent (35%)? Matt, you did not have to answer that right now, especially
if you need more time to draft a legal opinion.
MATTHEW M. BRACKEN, County Attorney: I think you could probably
do a floor. I would have to look at it closer depending on what number was selected.
I think a floor would be possible.
Committee Chair Kuali`i: Okay. No other questions on this
amendment?
There being no objections, the meeting was called back to order and proceeded
as follows:
Committee Chair Kuali`i: We will vote to approve the amendment and
obviously we can make further amendments later.
The motion to approve the Floor Amendment #1, which is attached herein as
Attachment 1 was then put, and carried by a vote of 4:1 (Councilmember
Kagawa voting no).
Committee Chair Kuali`i: Motion passes. Can we move on to our second
amendment? I would like to ask Council Vice Chair Kagawa to put forth that
amendment as well.
Councilmember Kagawa moved to amend Bill No. 2774 as circulated, and as
shown in Floor Amendment #2 which is attached hereto and incorporated
herein as Attachment 2, seconded by Councilmember Chock.
This floor amendment basically provides a clear breakdown of various income
groups for use in the in-lieu fee calculations as subparagraph (a)(1) was too vague
and the update of the dollar figures which reflect the consumer price index (CPI) as
those figures were from 2008 I believe. Director Roversi can add to that.
There being no objections the rules were suspended.
HIR COMMITTEE MEETING 19 APRIL 8, 2020
Mr. Roversi: With regard to the first paragraph,
subparagraph (a) with regards to the in-lieu fees, our proposal was to strike the
subsection (b) and just refer to 7A-2.1 for the guidance of how the in-lieu fee should
be allocated. In practice, having gone through a couple of in-lieu fee calculations,just
referring generally to 7A-2.1 without specifying the subsection (a)(2) can result in
various multiple results. It is not definitive enough to just provide guidance. That is
why we suggested adding the (a)(2) to give more clarity to exactly how the fee is to be
calculated. The second part, these numbers were presented at Council's request.
They simply update the in-lieu fee numbers that were adopted in 2008 based on the
CPI to today's numbers. Someone reading this ordinance does not have to do the
calculations themselves in 2020. They understand what the dollar numbers are. As
a practical matter, under the current Ordinance, we are required in the background
to do those calculations anyway. The public is not aware of what the numbers are,
because they are not seeing the calculations. This is doing the calculations for them.
The Housing Agency supports both of these proposed changes.
Committee Chair Kuali`i: A question from Council Vice Chair Kagawa.
Councilmember Kagawa: Can you explain a little of how the in-lieu fee
works? Can you give me an example?
Mr. Roversi: Sure. I just did a draft housing agreement for
a project in Kalaheo. A 12-unit housing development.
Councilmember Kagawa: Where?
Mr. Roversi: The developer doing that project basically has
two (2) options. They can build a required number of physical housing units and in
that case, because they took advantage of incentives, and again, this goes to the thirty
percent (30%) point, the thirty percent (30%) requirement to provide physical units
was dropped down to fifteen percent (15%). In this 12-unit development, that had
the option of either providing two (2) units at pre-specific price points that are defined
in the Ordinance, or instead of doing that, if they prefer, they could pay in in-lieu fee
instead. We utilize this table to determine what the amount of their in-lieu fee would
be. The developer gets to make their own decision whether it is financially better for
them to pay the fee or for them to actually build the physical housing units and
provide them at the pre-specified prices.
Councilmember Kagawa: What happens to the fee? Does it go to the
Housing Agency?
Mr. Roversi: It goes into the Housing Development
Revolving Fund. It is required to be used to develop workforce housing. There are
limitations on what the moneys are used for. It has to be used for the development
of housing.
HIR COMMITTEE MEETING 20 APRIL 8, 2020
Councilmember Kagawa: So the Kalaheo developer has to pay the
in-lieu fee, but if you develop on Rice Street, you do not pay anything, correct?
Mr. Roversi: If you build to the maximum density required
on your lot in the Lihu`e Town Core, you would not have to pay the in-lieu fee.
Councilmember Kagawa: To the maximum density.
Councilmember Chock: I have a follow-up.
Committee Chair Kuali`i: A follow-up question from Councilmember
Chock.
Councilmember Chock: Thank you. Basically, the in-lieu fee allows
us to subsequently go back out there and try and secure more affordable housing
somehow.
Mr. Roversi: Exactly.
Councilmember Chock: The question is really about what is the right
amount to ensure that we have those funds available. Based on how you set it up
here, you are comfortable that that fee will then be enough for us to do so. Is that
correct?
Mr. Roversi: What these in-lieu fees represent is an
approximation of the financial burden that is placed on a developer to provide the
physical housing units at workforce pricing. For the specific Kalaheo project that I
am talking about, if this developer were to provide physical housing units, he would
be required to sell the two (2) housing units at below-market. What he presented
with his pro forma, the below-market amount that he would essentially be losing by
providing physical units was very close to the amount of the in-lieu fee that he would
have provided. The in-lieu fees we would be collecting on that Kalaheo project are
not intended to be able to go out and physically build two (2) houses. They are just
to offset the difference that the developer would be facing in his cost in providing
those units.
Councilmember Chock: I just wanted to make sure that it was clear
that this does not ensure that we can turn around and materialize an affordable unit.
It is still under the true cost of a construction of a unit in general. Is that fair to say?
Mr. Roversi: Correct.
Councilmember Chock: Okay. What is the difference between that?
The average cost is at least three hundred fifty thousand dollars ($350,000) to build
something.
HIR COMMITTEE MEETING 21 APRIL 8, 2020
Mr. Roversi: Every developer will tell you that it is more
than that. In this Kalaheo example, I do not have the paperwork in front of me, but
I could probably provide you all with my draft housing assessment just so you all can
see how this operates in reality. The in-lieu fee assessment was approximately four
hundred twenty thousand dollars ($420,000). Instead of building two (2) houses and
below-market rate, the developer had the option of paying in the ballpark of four
hundred twenty thousand dollars ($420,000). If the County would take that money,
we would not be able to build two (2) houses. We could probably build one (1).
Typically, we use our financing to leverage other moneys that are available. If we
pair that four hundred thousand dollars ($400,000) with other financing vehicles, we
can create an actual ability to build a lot more than what that actual four hundred
thousand dollars ($400,000) represents.
Councilmember Chock: Thank you. I am sorry, I did not represent...I
know it is very low, but I know the range is anywhere between two hundred seventy-
five thousand dollars ($275,000) and four hundred fifty thousand dollars ($450,000).
I think it illustrates the hill that we have to climb, even with these amendments, to
try and create more affordable housing.
Committee Chair Kuali`i: Council Vice Chair Kagawa.
Councilmember Kagawa: The four hundred twenty thousand
dollars ($420,000), if you divide it by twelve (12)...and I am talking about the Kalaheo
project. That would be approximately thirty-five thousand dollars ($35,000) per unit.
If the houses were intended to be sold...the twelve (12) units...the developer said that
he is going to sell it at about five hundred thousand dollars ($500,000) each and he
will make his profit for developing those units, then every unit would have to be five
hundred thirty-five thousand dollars ($535,000) in order to...so we just drove up the
market-price. Yet, the County benefits by getting two hundred eighteen thousand
dollars ($218,000) to further workforce housing. It is like a double-edged sword. We
hope the gap group buys the market-priced houses. That is how you really reduce the
affordable housing. If all of our market price houses goes to people on the mainland
who have stock market moneys, we will never solve our affordable housing problem
for our local people. We are hoping the gap group is able to buy those market-priced
units, correct? Is that not the goal?
Mr. Roversi: We would all hope that market-rate units
would be affordable to everyone on Kauai, but that is not the life that we are living
in at the moment. Market-rate units are not affordable to the bulk of the people that
live on Kauai. To your point, if you charge an in-lieu fee to a developer, they will
most likely increase the market cost or the cost of their market-rate homes to
compensate themselves for paying that fee.
Councilmember Kagawa: Okay.
Committee Chair Kuali`i: Any other questions? Okay.
HIR COMMITTEE MEETING 22 APRIL 8, 2020
There being no objections, the meeting was called back to order and proceeded
as follows:
Committee Chair Kuali`i: Let us vote on this amendment then.
The motion to approve the Floor Amendment #2, which is attached herein as
Attachment 2 was then put, and unanimously carried.
Committee Chair Kuali`i: Motion passes. That amendment will be
added to the package. We have a third amendment.
Councilmember Kagawa moved to amend Bill No. 2774 as circulated, and as
shown in Floor Amendment #3 which is attached hereto and incorporated
herein as Attachment 3, seconded by Councilmember Chock.
Committee Chair Kuali`i: This amendment is talking about the addition
of a multi-family requirement which incentivizes higher density development without
requiring a specific number of units based on density for form-based code areas. It is
a clarification on that density. Director Roversi, do you have anything to add?
There being no objections, the rules were suspended.
Mr. Roversi: Sure. In my original discussions with the
Planning Department the intricacies of the form-based codes were not completely
apparent to me. Councilmember Evslin brought this up in one of the prior meetings
so I later went back to look at it and discussed it with the Planning Department. In
the specific areas on the island that have been overlaid with a form-based code, unlike
the Lihu`e Urban Design District and Town Core, there is not a specific defined
density like R-6, R-10, and R-8. There are form types that can be developed in that
area based on transects that are imposed on sections of the form-based code area. By
simply requiring in those areas that you develop to the maximum density allowed,
because there is no maximum density being defined, that is not really requiring
anything. In discussions with the Planning Department, they were comfortable
replacing for the form-based code areas replacing that maximum density requirement
with a multi-family project requirement. This would capture the intent of increasing
density in those areas as a requirement of qualifying for the exemption. This was
developed in cooperation with the Planning Department in discussions on how the
form-based code was functioning in practice. The Housing Agency supports this
amendment.
Committee Chair Kuali`i: Any questions? Councilmember Evslin.
(Councilmember Chock was noted as not present.)
HIR COMMITTEE MEETING 23 APRIL 8, 2020
Councilmember Evslin: Thank you, Adam. In practice, it says
"...developed as multi-family projects..." but then could somebody...there is still no
minimum floor for that multi-family project? How does that work?
Mr. Roversi: Number of units...is that what you are
talking about?
Councilmember Evslin: Yes.
Mr. Roversi: That was something that we scratched our
heads with, with the folks at the Planning Department. They appear to be content
with this language. They were not recommending a specific number of units just
because the lot size could be varied. I would almost need to defer to ask Ka`aina to
come and explain the specifics of how the form-based codes operates in detail to have
a firm understanding of how that relates to specific numbers of units.
Councilmember Evslin: I am prepared to support the amendment, but
it would be good to hear from Ka`aina at some point to walk through in practice how
this would work. If the Planning Department supports it as intended for this Bill
then that is good with me at the moment.
Mr. Roversi: I would add that presuming the Council acts
in the future as the Waimea Town Core Design District and the Hanapepe District is
adopted, it is my understanding that each of those areas will also be form-based code
overlays. I agree that we need to understand how that operates in practice.
Committee Chair Kuali`i: Any other questions? Okay. Then we will
vote.
The meeting was called back to order and proceeded as follows:
The motion to approve the Floor Amendment #3, which is attached herein as
Attachment 3 was then put, and unanimously carried (Pursuant to Rule
No. 5(b) of the Rules of the Council of the County of Kaua i, Councilmember
Chock was noted as silent (not present), but shall be recorded as an affirmative
for the motion).
Committee Chair Kuali`i: Do we have any other amendments at this
time? Councilmember Cowden.
(Councilmember Chock was noted as present.)
Councilmember Cowden: I have an amendment. I believe Director
Roversi has received it. It is a simple one.
HIR COMMITTEE MEETING 24 APRIL 8, 2020
Councilmember Cowden moved to amend Bill No. 2774 as circulated, and as
shown in the Floor Amendment which is attached hereto and incorporated
herein as Attachment 4, seconded by Councilmember Kagawa.
Committee Chair Kuali`i: Do you want to talk about your amendment or
have Director Roversi talk about it, if you talked with him about it already?
Councilmember Cowden: I can describe it. It is just adding a little bit
of wording in here. This is talking about areas like the Lihu`e Town Core, K61oa Town
Core, and Kalaheo. It is in area (b) under Title IV, Chapter 10, Article 6. It states,
"Where an onsite reserve of an area for required infrastructure may limit attaining
such maximum density, and where the Developer has made a good faith effort to
attain such maximum density, a determination as to whether a project has met this
requirement shall be delegated to the Housing Director." The intention here is for
example, if they need to put a detention basin in or need to adapt slightly for the
limitations that are there relative to infrastructure as I was mentioning before, it
becomes up to the Housing Director to see if that for the most part falls within the
realm. It is not up to the developer. We do not eliminate the possibility of an
otherwise really good faith effort because of a lack of infrastructure needing
additional space. Do you have any feedback on that, Director Roversi?
There being no objections the rules were suspended.
Mr. Roversi: I appreciate the idea of some discretion to
analyze specific projects. It is hard to develop legislation that covers every and all
situation in a fair and reasonable way. I have a little bit of concern with this. Here
is a hypothetical basis of my concern. Let us say there was a development proposed
in K61oa. The developer certainly thinks he made good faith efforts to get to the
maximum density. The Housing Director, whether it is me or someone in the future,
reviews the project and can come up with three (3) different ways that the developer
could probably increase the density. The developer does not really feel like that is
reasonable. He feels he has made a good faith effort already. Now, what happens
next? I make a determination or a future determination says we do not agree with
your good faith effort, we are not going to give you the maximum density exemption,
and now the developer is going to take us to court to argue over whether it was a good
faith effort or not. There is just a level of uncertainty that I wonder if it is going to
give rise to challenges from developers. That is my concern.
Councilmember Cowden: So with your background in law, your concern
is that this creates legal problems?
Mr. Roversi: Possibly.
Councilmember Cowden: When I read it, it sounds like it is up to you.
But you are saying that it is not?
HIR COMMITTEE MEETING 25 APRIL 8, 2020
Mr. Roversi: I understand that. I think as a matter
of...and I do not know if Matt wanted to comment or not, whether the statute gives
the Director discretion or not, that is fairly clear, but I think the exercise of discretion
by someone in government is always open to challenge by an applicant or petitioner
to demand a contested case proceeding or to go to court to claim their due process
rights have been violating in that we have unreasonably interpreted the terms of the
statute...something like that.
Councilmember Cowden: I tried to look where there are R-10 and R-20,
because those would also apply. There were not that many places...I saw-in Kapa`a
in the Lihi area near the boat ramp...I was trying to look for areas where this would
occur. All of them seem like they are not that obvious of a place to be able to build
without a limitation. Especially that area in Kapa`a. How many areas would this
apply to? Are there a lot of R-20 locations? I did not see it when I was trying to look
at it. There does not appear to be a lot of R-20 zones.
Mr. Roversi: In one of our previous Council presentations,
I think we provided maps of the entire island with all of the R-10 and R-20 areas
highlighted in red.
Councilmember Cowden: Okay. There were not a lot, correct?
Mr. Roversi: The bulk of them are in the Lihu`e area. A lot
of them are outside of the defined town core area. Particularly, in and around Puhi,
that side of the Lihu`e area. I think there were some on the Hanama`ulu side of
Lihu`e. There are a few scattered all over the island. The bulk are in the greater
Lihu`e area.
Councilmember Cowden: Those areas would have access to water and
sewer? Puhi and Hanama`ulu have access to water and sewer, correct?
Mr. Roversi: Some areas, yes. Some areas, no. There are
sewer lines in Lihu`e and Hanama`ulu, but sometimes you still need to create an
extension to the existing line or a pump station for you to actually access it. It
depends on the specific lot.
Councilmember Cowden: Okay. That is what I am trying to be able to
look at. If some of these places that have this potential...if they would be limited
because they basically cannot put their footprint over the whole property.
Mr. Roversi: I understand your intention. It is not
unreasonable. I appreciate the idea of some discretion. I do not know if the concern
of legal complications overwhelms the benefit of the discretion or not.
Councilmember Cowden: Any thoughts from Matt Bracken, County
Attorney?
HIR COMMITTEE MEETING 26 APRIL 8, 2020
Mr. Bracken: I would agree with the Housing Director.
When you give him that kind of discretion, the applicant would be entitled to some
sort of due process, whether it be a contested case hearing under Hawaii Revised
Statutes (HRS) Chapter 91 or ultimately just a lawsuit. If it was a contested case,
that could again be appealed to Circuit Court which could result in litigation. I think
there is potential for litigation that could come out of it. It is really just a
determination of the likelihood of that happening versus the benefit you are
proposing. The amendment is legal. You can definitely adopt it. But there is a
potential for litigation from it.
Councilmember Cowden: Okay. I am seeing that there is quite a bit of
this in the Po`ipu area. All of that...
Mr. Roversi: I would add that there is a caveat in this
exemption that it does not apply to R-10 or R-20 that is in the Visitor Destination
Area (VDA). I think most of the Po`ipu high density area is inside the VDA.
Councilmember Cowden: You are correct, it is. Thank you.
Committee Chair Kuali`i: Follow-up from Council Vice Chair Kagawa.
Councilmember Kagawa: I have a follow-up for Matt. Speaking of
litigation, we are processing State and County projects, but private projects were told
to shut down. Is that legal? I know we can do a lot of things because of the COVID-19
emergency situation. We are allowing...look on Rice Street, those crews are working.
The Transportation Investment Generating Economic Recovery (TIGER) grant crews
are working. The private workers have all been laid off for at least a month. What
is the deal with that?
Mr. Bracken: The emergency depends on if the various
contractors are considered essential versus non-essential. That comes down to an
analysis of the Governor's Third Proclamation and also the Mayor's overlay of that
Proclamation. It largely depends on whose rule you are talking about. The Governor
does have broad authority and he is the one who established the stay at home order
and established the essential business versus non-essential businesses.
Councilmember Kagawa: So the State- and County-funded projects are
okay for the contractors to work on, but the private ones have to stop? Is that what
happened?
Mr. Bracken: I would have to look at the specific rules
and/or the projects.
HIR COMMITTEE MEETING 27 APRIL 8, 2020
Councilmember Kagawa: It was brought up to me whether that was
legal. Since we were talking about litigation, I just wanted to ask the question to find
out if it was legal. If it is, then okay.
Committee Chair Kuali`i: Any other questions? Councilmember
Cowden.
Councilmember Cowden: I am looking at the Kekaha area. There are
quite a few areas in Kekaha. Are most of these built-out?
Mr. Roversi: I am looking for my copies of the maps.
Councilmember Cowden: There are quite a few in there. I cannot tell if
those are built-out already. How about the wastewater treatment plant. Does the
one in Waimea address Kekaha?
Mr. Roversi: Pardon me, I did not hear that.
Councilmember Cowden: The wastewater treatment plant does not
address Kekaha, correct?
Mr. Roversi: I do not believe so.
Councilmember Cowden: Okay. Again, if those are not built, I am
thinking about whether they need the wastewater systems right there and the
detention basin issue.
Mr. Roversi: This is really not here nor there, but I think
detention basin requirements and wastewater requirements are kind of apples and
oranges. Detention basins have to do with storm water runoff and sewer systems are
a separate issue.
Councilmember Cowden: Especially in Kekaha, there are really low line
areas that experience flooding. That area used to be a wetland. I am just wondering
if that is an issue. When we are looking at it and we have this maximum density
required, is it going to be problematic for those properties? That is what I am looking
at. Thank you Council Chair Kaneshiro for handing me these maps.
Committee Chair Kuali`i: I gave it to him.
Councilmember Cowden: I am sorry, Committee Chair Kuali`i. Thank
you. There are quite a few properties there. When it is outside of sewage or when we
are looking at areas that might have water sitting there when we have a ninety
percent (90%) footprint of a building, we might have an issue. I am just trying to look
at that. Do you see a way that the Director could have some discretion? Is there a
better way to frame what I asked and still get that outcome?
HIR COMMITTEE MEETING 28 APRIL 8, 2020
Mr. Roversi: I do not really have a specific problem with
the way your amendment is worded. It may very well be that the discretionary
benefits outweigh the risk of litigation. I just want to approach the amendment with
our eyes open. I did quickly pull up the Kekaha map. All of the dots represent houses.
Most of the areas that are zoned R-10 or higher in Kekaha are already built-out. The
only way that this exemption would even come in to play in that area, would be if a
developer were to buy up a bunch of single-family homes that already exist on those
lots to redevelop them in some fashion. Then we would be thinking whether the
Housing Policy would apply or not apply. As they currently sit, almost all of those
lots are built-out already based on the maps that were provided.
Councilmember Cowden: In Hanapepe, it looks like there is a
significant piece. I think that is A&B land. There is a significant piece of R-10 that
we are hoping to be able to develop out. Correct? They have a sewer system.
Mr. Roversi: Portions of Hanapepe are serviced by our
sewer system. Some portions are not. I am not exactly sure where the lines go.
Councilmember Cowden: I think that one would probably end up being
able to be serviced by the sewer system. In Kapa`a, there is a good chunk right there.
Thank you for your answers.
Committee Chair Kuali`i: Councilmember Evslin, did you have a
question?
Councilmember Evslin: Thank you. That was not me making that
ringing sound. Adam, how much of any discretion do you have during the Class IV
zoning process to waive or lift requirements? If a big development does come through
and as Councilmember Cowden is alluding to, they make efforts, but cannot quite
maximize their density during their Class IV zoning permit, do you have the
discretion during that process to lift these requirements?
Mr. Roversi: It is my understanding that I am constrained
by the Policy. The only people who could amend a housing agreement to make some
changes to accommodate a specific situation would be the Council. That is my
understanding.
Councilmember Evslin: Okay.
Mr. Roversi: That has happened in the past when housing
agreements were developed. We were developing housing agreements and imposing
workforce housing requirements on projects long before Ordinance No. 860 was
adopted. There were numerous incidents where an initial housing agreement would
be developed, Council would approve it, it would take a few years for the project to
get off the ground, and economic conditions might change. The developers would
HIR COMMITTEE MEETING 29 APRIL 8, 2020
come back to Council asking for changes in the agreement. That routinely happened
in the past. There were options for that prior to this Ordinance. My understanding
is that the creator of the Policy in the first place, Council could make amendments to
existing housing agreements to fit certain situations if they chose to. Matt might
have a different opinion, but that is just my lay reading of the existing Policy.
Councilmember Evslin: I have a follow-up on that.
Committee Chair Kuali`i: Okay. Go ahead.
Councilmember Evslin: That potential is regardless of Class IV zoning
permits?
Council Chair Kaneshiro: You have to move back. Your microphone was
causing you to break up.
Committee Chair Kuali`i: Back up and talk slower.
Councilmember Evslin: Can you hear me okay?
Committee Chair Kuali`i: So far.
Councilmember Evslin: If it happened with or without a Class IV
zoning permit, if a developer cannot maximize their density and they want some
change in the requirements they could come to Council and Council has the discretion
to change the requirements for any development? Is that correct?
Mr. Roversi: Let me think through this. The way the
process works currently...they come initially to the Housing Agency for an
assessment on their project. We come up with an assessment based on the Policy and
we do not have much discretion available by the Housing Director to come up with
the numbers that we come up with. We then place those assessment numbers into
an agreement that I understand ultimately Council has to approve. At the time of
that agreement coming to Council, there would be an opportunity for Council to
consider it, to amend it, and to make changes. I am unsure of the procedure in
advance of that step for an individual developer to come to Council to request
remedies or changes the assessment before it even gets to an agreement. There are
some obvious procedural vehicles to do that.
Councilmember Evslin: Okay. It helps me clarify that we have
potentially an avenue to do what Councilmember Cowden is saying through an
appropriate existing process, even if it is after your review has already been made.
Mr. Roversi: I would want the County Attorney to confirm
that my reading is correct. That is my quick understanding.
HIR COMMITTEE MEETING 30 APRIL 8, 2020
Councilmember Evslin: Matt, do you have any follow-up?
Mr. Bracken: I agree. That is my understanding as well.
Councilmember Evslin: Thank you.
Councilmember Cowden: I have a follow-up.
Committee Chair Kuali`i: Okay, Councilmember Cowden.
Councilmember Cowden: If that is the case where it has to go to
something special like the County Council, I think when developers want to be able
to build a project and they want to be able to buy it and know they can do it, there
are hoping that they are making an informed decision at the time of purchase and
design and just do it, rather than have a very long, protracted, and very difficult
public process. I am often one of those people there at those public meetings. It is a
very big difference whether something has to go through a prolonged process or not.
It can happen. It is just more difficult.
Committee Chair Kuali`i: If we can wrap this up, we will. Otherwise we
probably need to take a caption break in a couple of minutes. Any further questions?
My only question is...and my final question is...I am a little uncomfortable supporting
this amendment at this time based on the comments from the Director and the
County Attorney. I am wondering if it might be better to consider withdrawing this
amendment and working on it further. I am wondering if the County Attorney and
the Director would be willing to work further with Councilmember Cowden on
making this less of something that you have concerns about.
Mr. Roversi: I would be happy to talk about it further if
that is what you decide.
Committee Chair Kuali`i: Councilmember Chock.
Councilmember Chock: Thank you. I appreciate the amendment. I
actually appreciate what you are trying to accomplish. I think it is problematic. From
my experience and what I have seen at the Planning Department with discretionary
power, especially as it relates to whether or not a development gets done or not, I
think it needs to be really clear cut...it has just been my own observation...I am
hesitant to support it as is. I actually like the fact that if something like this has to
get done, that it is done through the Council, although politically driven sometimes
might not be a good thing. It sheds more light on the actual subject matter. That is
where I am right now. I would be happy to continue to see different versions of it if
that is the will of the body.
Committee Chair Kuali`i: Anyone else?
HIR COMMITTEE MEETING 31 APRIL 8, 2020
There being no objections the meeting was called back to order and proceeded
as follows:
Councilmember Cowden: Okay, it looks like it is not going to pass, and
I would rather have a conversation in between about it.
Committee Chair Kuali`i: It is up to you to withdraw your motion.
Councilmember Cowden withdrew the motion to amend Bill No. 2774 as
circulated, and as shown in the Floor Amendment, which is attached hereto
and incorporated herein as Attachment 4. Councilmember Kagawa withdrew
the second.
Committee Chair Kuali`i: So we will have no vote. That is that. Any
other amendments today? Okay. Any final discussion? Councilmember Kagawa.
Councilmember Kagawa: I just want to thank Councilmembers Kuali`i,
Evslin, Chock, and Council Chair Kaneshiro for working on these amendments. I
think part of the problem is that we are saying we are not changing the thirty
percent (30%) requirement. I also want to thank Councilmember Cowden as well. It
came from Councilmember Kuali`i and primarily Councilmember Evslin. I think the
primary problem I have is that we are saying we are following the current thirty
percent (30%) requirement and that it is not changing. I think that is the problem.
The developer is saying that no one has developed anything for many years. Work
with them and maybe it needs to be lowered. It sounds nice, we always want to make
the percentage be high so we get the maximum from the "greedy developers" as they
are called. There is no one in America doing anything not to make any money, the
last I checked. No one is going to do anything out of the goodness of their hearts and
house our local people. Having more housing being developed, we hope that our gap
group is going to be able to afford them. We hope the developers are not going to
solely targeting their homes to people from the mainland at the prices that only they
can afford. The last I checked, this is America. We have to hope that the market will
fix itself and help fix our problem. I do not think this County government following
these Nexus Reports that are based on a lot of examples from the mainland is going
to apply to places like Hawaii. We do not have the land. We do not have outskirts of
Seattle and areas that can be developed and can be made profitable using these kinds
of totals that the Nexus Report says is so successful. Hawaii is different. For five
hundred thousand dollars ($500,000) in Las Vegas, you can build two (2) mansions
with swimming pools, especially with COVID-19. In Hawaii, you cannot even buy a
house in Molokoa for five hundred thousand dollars ($500,000). It costs seven
hundred thousand dollars ($700,000). That is an old subdivision. That was the first
Pikake. It is crazy. Forty (40) year old houses going for six hundred thousand dollars
($600,000) or seven hundred thousand dollars ($700,000). In new Molokoa, it is seven
hundred thousand dollars ($700,000) for a brand new flag lot house. It is crazy. This
is not comparable to any nexus on the mainland. In Hawaii and on Kauai, we have
major problems. The problem is the market has just gone crazy. We need to have
HIR COMMITTEE MEETING 32 APRIL 8, 2020
policies that differ from the nexus in many ways. We have to be more creative. We
have to work with the developers that we trust. We have to find things that are
realistic. If we keep leaving things the same or adding in stricter measures, we are
going to see zero (0) homes being developed. That will make the housing problem
worse. I talked a little bit earlier about how we are shutting down private and
individual construction from moving forward, that is very problematic. Because we
are doing that, we have a lot more people unemployed. How are they going to be able
to pay their rent or mortgages? We are not helping the problem. If we shut down the
State and County projects as well, then that is fine. We are making a stand for safety.
We are allowing State and County projects to move forward. It is like the "have" and
"have nots." Some construction projects are going and they are able to pay their bills
and mortgages. If you are not on a State or County project, then you have to collect
unemployment and see how you are going to pay your rent. I do not know how that
policy makes sense. I think COVID-19 is the problem. Right now I think this Bill
should be on the backburner. It is a good step forward and has great intentions.
There are no bad intentions. Let us take care of the coughs and the COVID-19
concerns and let us put these types of issues on the backburner for now. We should
work with the developers and those with experience. We are all "young puppies" still
compared to those with fifty (50) years in developing and in County government
experience. They have seen the changes. You have to work with our local experts.
Thank you.
Committee Chair Kuali`i: Anyone else with final comments.
Councilmember Cowden.
Councilmember Cowden: I want to appreciate everything that you have
done and I want to recognize the validity of what Adam Roversi said about the 2008
event having an impact, the real estate crash. We are hearing that COVID-19 is
probably going to do something similar. We are competing in a national economy for
our home sales. I look forward to setting up a meeting with the Director and one of
my colleagues. I want to Zoom in one of these people who does building at the national
level and someone as a local expert to see if we cannot find a fine-tuned way in
between to strengthen what we have. There are a lot of creative ways that things are
done elsewhere, but it is also unique here. When you ask what is it that they do not
like? One of the elements that is a big piece are the three (3) areas where there are
no restrictions. Typically, what is looked at as to what creates desire and demand for
a downtown urban environment, we do not have those other criteria that are there.
Most people do not want to live on Rice Street. They might be able to get people to
do it. I have had rather robust conversations, but I would like that conversation to
be with you at the table, because I think we might be able to come up with or at least
explore stronger ideas. If we had one or a couple of experienced developers from here,
I think we just need to have that conversation. I love what you have, if we could do
it. When I am hearing that it is not possible, it is hard. I will be talking to these
developments that you said do support it. I will look to see what they have to say.
Thank you.
HIR COMMITTEE MEETING 33 APRIL 8, 2020
Committee Chair Kuali`i: Councilmember Evslin.
Councilmember Evslin: Thank you again to our Housing Director,
Adam Roversi and Councilmember Kuali`i and Council Chair Kaneshiro for all of
their work on this Bill. I think that what we have heard a lot today on, especially
from Councilmember Kagawa, is that there is an inherent conflict with any Housing
Ordinance in that there are two (2) sort of conflicting goals. On one side we want to
have it produce below cost subsidized affordable units and on the other hand we want
it to not impede the rate of construction. We need new housing supply or at least to
put downward pressure on the cost of existing homes. To try and balance those is
really difficult. I think it is going to be almost impossible in trying to balance those
to try and get consensus. We have received testimony opposing this from both sides.
It is going to be impossible to try and satisfy both of those sides. With that said, I do
think with the geographic exemptions that you created here and allowing a large
exemption if you are building housing at the density we need within the areas
identified in the General Plan that are needed, I think that exemptions based on
zoning is the correct way to go about this. To highlight a little bit of the problem we
are facing on both sides...our current Ordinance has produced almost zero (0)
affordable units. On the other hand, almost a bigger problem on our island is the
supply crisis. I bought my home approximately two (2) years ago. My home has
increased in value by sixty thousand dollars ($60,000) according to Zillow. I did not
do anything, but sit in that home. I am making in theory, more money off of my home
by doing nothing than I make from my own business. That is because the rate of our
existing homes appreciates so rapidly because there is so little supply. I do think an
effective ordinance here will do both things. It will produce more housing and produce
affordable units. All that said, I also hope we can defer this at least one more time,
which I think is the direction we are going here. I do think it is important to take our
time to make sure we get it right. I certainly think that we are on the right track
here. Again, I do appreciate the work.
Committee Chair Kuali`i: Thank you. Councilmember Chock.
Councilmember Chock: Thank you. I think I will lead off from where
Councilmember Evslin ended in saying that this has been talked about for almost
ten (10) years or more. We have had task force committees put together and there
has been no change to this ordinance. That is an issue. I think we really need to
think about how we are going to pass something. With that being said, I really
appreciate the chance to have this discussion, to continue it and take it in small bites,
and go back to the drawing board to improve upon it with the intention that we get
something passed. There is always going to be conflict on this. I think we have to do
our due diligence. I think we need to engage with the stakeholders and the developers
out there that have an opinion. We should include our housing professionals that
have an opinion. We may not all agree at the end of the day, but I think that is an
important part of our process. We need to be able to sit with them and hear them to
see if there are ways to increase the capacity of this ordinance in any way we can so
that at the end of the day we can move something forward. Thank you.
HIR COMMITTEE MEETING 34 APRIL 8, 2020
Committee Chair Kuali`i: Okay, thank you. Mahalo to everyone,
especially to Aida from our staff and the rest of the staff. We will continue to move
slowly as I ask for a deferral again for today. We have always intended to move
slowly. We want to hear from all stakeholders and developers. Council Vice Chair
Kagawa you have a specific list of developers you want to bring to me? Please do.
Councilmember Cowden the eleven (11) that you mentioned, please forward that to
us so I can work with Director Roversi and Council Chair Kaneshiro and we can
address whatever concerns there are. We can also come up with even further
amendments as needed. At this time can I ask for a motion and a second to defer this
item to our first committee meeting in May 2020.
Councilmember Chock moved to Defer Bill No. 2774, as amended, to the first
Housing & Intergovernmental Relations Committee Meeting in May 2020,
seconded by Councilmember Kagawa
Councilmember Cowden: I do have a question.
Committee Chair Kuali`i: You have a process question?
Councilmember Cowden: If we select the first committee meeting in
May, part of my instinct is that...
Committee Chair Kuali`i: Our first committee meeting in May could be
the 20th or the 27th since we have these COVID-19 delays.
Councilmember Cowden: I am thinking we should defer it until the end
of May so we get through this situation a little bit. I think we will be able to see how
hard of a crash we are going to experience.
SCOTT K. SATO, Deputy County Clerk: We could put it on and defer it
again, if needed.
Councilmember Cowden: Okay.
Committee Chair Kuali`i: The whole idea is that if needed, we can again
defer. If we need to have a meeting and we only have one amendment, again we are
adding to the amendments. This is not going to be decided at the next meeting. We
are probably looking at June or July, or even later. Who knows. Did we vote or not?
The motion to defer Bill No. 2744, as amended, to the first Housing &
Intergovernmental Relations Committee Meeting in May 2020 was then put,
and unanimously carried.
Committee Chair Kuali`i: Motion is carried.
HIR COMMITTEE MEETING 35 APRIL 8, 2020
There being no further business, the meeting was adjourned at 10:49 a.m.
(The Committee Meetings recessed for a caption break at 10:49 a.m. and
reconvened with the Committee of the Whole at 10:59 a.m.)
Respectfully submitted,
1 6W �
Scott K. Sato
Deputy County Clerk
APPROVED at the Committee Meeting held on April 22, 2020:
KIPUkAI KUALI`I
Chair, HIR Committee
*Beginning with the March 11, 2020 Council Meeting and until further notice,
Councilmember Arthur Brun will not be present due to U.S. v. Arthur Brun et al.,
Cr. No. 20-00024-DKW (United States District Court), and therefore will be noted as
excused (i.e., not present).
Attachment 1
(Apr118, 2020)
FLOOR AMENDMENT#1
Bill No. 2774, Relating to the Housing Policy for the County of Kauai
Introduced by: ROSS KAGAWA, Councilmember
Amend Bill No. 2774 by amending Section 7A-2.1 as follows:
"Sec. 7A-2.1 General Requirements.
(a) Residential Developments. A thirty percent (30%) workforce
housing requirement shall be assessed to any residential project subject to the
Workforce Housing Policy. The housing assessment shall be satisfied by
fee-simple sale of workforce housing units at affordable housing prices, which
shall be determined by the Housing Agency pursuant to Article 4 of
this Chapter.
(1) For a residential development consisting of ten (10) to
twenty-five (25) units, a developer shall be required to satisfy a
workforce housing requirement based on project's total number of
residential units. Workforce housing units shall be sold to households
earning from eighty percent (80%) to [one hundred forty percent (140%)]
one hundred twenty percent (120%) of Kauai median household income,
with the average sales price being affordable to households earning one
hundred percent (100%) of Kauai median household income.
(2) For a residential development consisting of twenty-six (26)
units or more, a developer shall be required to satisfy a workforce
housing requirement based on project's total number of residential
units. Workforce housing units shall be sold to households earning from
eighty percent (80%) to [one hundred forty percent (140%)] one hundred
twenty percent (120%) of Kauai median household income, in
accordance with the following income group assessment:
(A) [Twenty percent (20%)] Thirty percent (30%) of total
units priced to be affordable to households earning up to eighty
percent (80%) of the Kauai median household income.
(B) [Thirty percent (30%)] Forty percent (40%) of total
units priced to be affordable to households earning up to one
hundred percent (100%) of the Kauai median household income.
(C) Thirty percent (30%) of total units priced to be
affordable to households earning up to one hundred twenty
percent (120%) of the Kauai median household income.
[(D) Twenty percent (20%) of total units priced to be
affordable to households earning up to one hundred forty percent
(140%) of the Kauai median household income.]
(b) Resort Developments. For resort projects in visitor destination
areas, for amendments into the visitor destination area, and for resort district
zoning amendments which [will generate a need for new employees to fill one
hundred (100) or more full-time equivalent jobs, or] have density for more than
ten (10) [residential] dwelling units or twenty (20) hotel rooms, a fifty
percent (50%) workforce housing requirement or workforce housing
requirement based upon an independent analysis shall be [assessed.] in
accordance with the income group assessment provided in Section 7A-2.1(a)(2).
[The] For the independent analysis, the number, type, size, income target
groups to benefit, and the sales or rental prices of workforce housing units
required shall be based on an analysis of the number of jobs to be generated,
the availability of workers to fill those jobs, the resultant number and incomes
of workers to be supported by those jobs, the estimated number of workers
requiring housing assistance, and the amount of housing inventory available
to those workers. Such analysis shall be conducted by an economist retained
by, but independent of, the developer. The analysis shall be subject to approval
by the County Council for all petitions for visitor destination area or zoning
district boundary amendments, or approval by the Housing Agency for
subdivision, zoning, or building permit applications. The developer shall
complete construction of the required workforce housing units before final
building inspections or certificate of occupancy is issued for any facility or
accommodation of the resort development, except for temporary buildings for
real estate sales offices."
(Material to be deleted is bracketed. New material is underscored. Highlighted
material is new.)
V:\AMENDMENTS\2020\FA-2774 1 AMK SS.docx
2
Attachment 2
(April 8, 2020)
FLOOR AMENDMENT#2
Bill No. 2774, Relating to the Housing Policy for the County of Kauai
Introduced by: ROSS KAGAWA, Councilmember
Amend Bill No. 2774 by amending Subsection 7A-3.1(a) as follows:
"(a) Payment of In-Lieu Fees. Subject to Housing Agency approval,
in-lieu fees may be paid for all or a portion of the required number of workforce
units per the in-lieu fee schedule. In-Lieu fees shall be allocated pursuant to
[Section 7A-2.1(b)] Section 7A-2.1(a)(2).
(1) Calculation of In-Lieu Fee. The calculation of in-lieu fees
paid in-lieu of the required workforce units represents the developer
subsidy to subsidize housing units at prices affordable to workforce
income groups and shall be assessed according to the following in-lieu
fee schedule:
In-Lieu Fee Schedule
Income Requirement In-Lieu Fee*
Group
80% Unit Sales $176,000 218 240
100% Unit Sales $122,000 151 280
120% Unit Sales $ 67,0001 $83,080
[140% Unit Sales $ 12,000]
*Based on the Consumer Price Index for urban Honolulu effective
January 2020.
(2) In-lieu fees shall be subject to annual adjustment, based on
the consumer price index for Honolulu for all urban consumers.
(3) In-lieu fees paid pursuant to this Section shall be made
directly to the Director of Finance and shall be deposited in the housing
revolving fund established pursuant to Chapter 6, Article 9 of the Kauai
County Code. All moneys received shall be used for planning,
administering, and constructing government workforce housing
projects."
(Material to be deleted is bracketed. New material is underscored. Highlighted
material is new.)
V:\AMENDMENTS\2020\FA-2774 2 AMK SS.docx
Attachment 3
(April 8, 2020)
FLOOR AMENDMENT#3
Bill No. 2774, Relating to the Housing Policy for the County of Kauai
Introduced by: ROSS KAGAWA, Councilmember
Amend Bill No. 2774 by amending proposed Subsection 7A-1.4.2, Exemptions, as
follows:
"Sec. 7A-1.4.2 Exemptions.
The workforce housing requirements of this Chapter shall not apply to
the following:
(a) Projects within the following special planning areas and design
districts, developed at or above the maximum density allowed, or in areas
subject to form based codes developed as multi-family projects:
(1) Lihu`e Town Core Urban Design District as defined in
Title IV ChaP ter 10 Article 5A.
(2) Koloa Town Walkable Mixed Use District as defined in
Title IV, Chapter 10, Article 6.
(3) Kalaheo Town Walkable Mixed Use District as defined in
Title IV, Chapter 10, Article 6.
(b) Projects outside of Visitor Destination Areas and Special
Management Areas in residential or mixed use zoning districts with a density
of R-10 or greater, consisting of multiple or single family attached dwellings,
developed at or above the maximum density allowed.
(c) Any affordable or workforce housing development developed by or
for the County, either by itself or in partnership with another housing
development organization, is exempt from the requirements of this Chapter.
(d) The exemptions in subsection (a) for special planning areas and
design districts and in subsection (b) relating to zoning density shall expire
ten (10) years from the date of their adoption."
(Material to be added is underscored. Highlighted material is new.)
V:\AMENDMENTS\2020\FA-2774 3 AMK SS.docx
Attachment 4
(April 8, 2020)
FLOOR AMENDMENT
Bill No. 2774, Relating to the Housing Policy for the County of Kauai
Introduced by: FELICIA COWDEN, Councilmember
Amend Bill No. 2774 by amending proposed Section 7A-1.4.2 as follows:
"Sec. 7A-1.4.2 Exemptions.
The workforce housing requirements of this Chapter shall not apply to
the following:
(a) Projects within the following special planning areas and design
districts, developed at or above the maximum density allowed:
(1) Lihu`e Town Core Urban Design District as defined in Title
IV, Chapter 10, Article 5A.
(2) Koloa Town Walkable Mixed Use District as defined in
Title IV, Chapter 10, Article 6.
(3) Kalaheo Town Walkable Mixed Use District as defined in
Title IV, Chapter 10, Article 6.
(b) Projects outside of Visitor Destination Areas and Special
Management Areas in residential or mixed use zoning districts with a density
of R-10 or greater, consisting of multiple or single family attached dwellings,
developed at or above the maximum density allowed. Where an onsite reserve
of an area for required infrastructure may limit attaining such maximum
density, and where the Developer has made a good faith effort to attain such
maximum density, a determination as to whether a project has met this
requirement shall be delegated to the Housing Director.
(c) Any affordable or workforce housing development developed by or
for the County, either by itself or in partnership with another housing
development organization, is exempt from the requirements of this Chapter.
(d) The exemptions in subsection (a) for special planning areas and
design districts and in subsection (b) relating to zoning density shall expire ten
(10) years from the date of their adoption."
(Material to be added is underscored. All material is new.)
V:\AMENDMENTS\2020\FA Bill No. 2774 FC AMK SS.docx