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Dr. Holeka Goro Inaba, Council Chair and Members of the County Council September 03, 2025 Page 2 The applicant is requesting to amend two conditions of the subject Change of Zone ordinance to facilitate their ability to utilize funds from the County's Affordable Housing Production (AHP) program to develop the final phases of the `Kumakua Self Help Housing' project. In their application for their last amendment, the applicant committed to dedicating 32 of the 33 planned lots for affordable housing. As had been the Planning Department's practice at the time, the applicant's commitment was memorialized in the affordable housing condition (Condition K). Additionally, to help defray the cost of developing these affordable lots, the Planning Director added language to the fair share condition (Condition I) to provide relief from the requirement to pay fair share on the affordable lots. At the time of the original amendment, neither the applicant nor the Planning Department were aware that this condition language conflicts with the AHP's funding rules, specifically around the prohibition of AHP funding use for affordable housing units/lots that are required by law. Because Condition K treats the 32 affordable units as a zoning requirement, AHP funding cannot be applied to them under Section 3-5(6)(b) of the program rules. To resolve this conflict, the Planning Department collaborated with OHCD to develop new standard affordable housing condition language for change of zone ordinances that aligns with AHP rules and encourages the development of additional affordable housing lots/units by offering incentives, such as relief from Fair Share requirements, in return for voluntarily provided affordable units well beyond the 20% required by housing code. The applicants' proposed amendments to Conditions I and K are generally consistent with the department's updated standard condition language and continue to support the original intent of promoting the development of a substantial number of affordable residential lots. The Planning Director recommends one modification: removal of the applicants' proposed introductory clause to Condition I, which states, "Should the Applicant develop residential lots on the subject property, the [The]... ". This conditional phrasing is more appropriate in the context of commercial zoning, where residential development is permitted but not required. However, because the subject property is zoned Single -Family Residential (RS-7.5 and RS-10), the creation of residential lots is an expected outcome. As such, the inclusion of this qualifying language is unnecessary. Additionally, there have been no changes to the subject property, proposed development, or associated land use entitlements since the most recent amendment in 2024, which granted a time extension for subdividing the final phases of the `Kumakua Self -Help Housing' project. Therefore, the justification provided for that amendment remains valid. These include consistency with the General Plan, the North Kohala Community Development Plan, and the Zoning Code; the availability of necessary infrastructure; and continued compliance with Coastal Zone Management (CZM) requirements, including the protection of historic, cultural, and natural resources.