REP PC 064 04/18/2006 2004-2006 - Laserfiche WebLink

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Communication 765 Bi11250 Page 3 of 3 In response to Committee Vice Chair Pete Hoffmann's inquiry how names would be obtained and qualification criteria, Mr. Kato stated that a wait list of names of West Hawaii residents is available and, that the criteria for participation was primarily based upon the USDA rural development program. That program addresses the low median income (80% and below) and the very low (50% and below) and that other criteria would be a willingness and commitment on the part of the household to participate. Mr. Kato said recently a self help program in Hawi had a buy-back period of three years from the date of occupancy which at the time, was the standard buy-back period. With respect to buy-back option in applicant's project, Mr. Kato stated he received communication from USDA informing him that based upon a national review, no buy- back provision will be included if USDA participates. Mr. Hoffmann concluded he would like to see the USDA no buy-back provision implemented and conform the ruling with state guidelines. Mr. Hoffmann stated there is a responsibility upon the Council to make affordable housing happen and work. However, if the program allows for immediate turnaround after completion (at market value with no restrictions), changes must be made to ensure the people on the waiting list that self help affordable housing will be retained for people who really need it. In response to Council Vice Chair Virginia Isbell's inquiry whether applicant is using USDA monies or private funds to develop the project, Mr. Kato responded applicant would be able to do the project if USDA participates. However, if development is not a USDA program, Mr. Kato is not sure applicant could service the low income market and make this project happen. Council Member Bob Jacobson expressed concerns about sales, re-sales and buybacks. He stated he would not be withdrawing his support as most of these people will want to maintain and occupy their homes. However, he noted there will be people profiteering from the program and encouraged that applicant look into methods of protecting taxpayers from self help programs that allow windfalls. Mr. Jacobson concluded a substantial ruling is needed from USDA to protect the interests of the public at large. Council Chair Higa confirmed that of the 190 self help homes applicant has already completed there were one or two in the Ainakea area and one in Hawi that turned over and that values have basically kept up with appraisals. He would support the measure. Committee Vice Chair Pete Hoffmann stated the problem is not how many are going to flip but rather the concern is that these affordable homes are being built in a high range with no restrictions regarding that. Mr. Hoffmann said the project in this particular area would have been contested had it not been an affordable self help and senior housing project. He concluded that while he supports the proposal, he does want to see a report from the USDA and, before final reading, a method of retaining self help housing and windfall prevention. No public testimony was received regarding this matter. PC REPORT NO. 64