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HomeMy WebLinkAboutMIN PCPLUD 2023/10/03 (2022-2024) Policy Committee on Planning, Land Use, and Development 7th Session Hawai`i County Building 25 Aupuni Street Hilo, Hawai`i October 3, 2023 CALL TO The regular meeting of the Policy Committee on Planning, Land Use, and ORDER: Development was called to order at 1:17 p.m., in the Council Chambers, Hilo, by Ms. Ashley L. Kierkiewicz, Chair. ROLL CALL: Present: Ms. Ashley L. Kierkiewicz, Chair Mr. Holeka Goro Inaba, Vice Chair Ms. Cindy Evans, Member Ms. Michelle M. Galimba, Member Ms. Jenn Kagiwada, Member Mr. Matt Kaneali`i-Kleinfelder, Member (came in later) Ms. Heather L. Kimball, Member Ms. Susan L. K. Lee Loy, Member Absent& Excused: Ms. Rebecca Villegas, Member STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: (There were none.) BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Bill 72: AMENDS CHAPTER 11, ARTICLE 1, SECTIONS 11-3 AND 11-13 OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO AFFORDABLE HOUSING Amends and adds definitions and adds the Housing Administrator's powers and duties regarding the eligibility requirements for affordable housing. Reference: Comm. 461 Intr. by: Ms. Kimball and Mr. Inaba Motion to Approve: Ms. Kimball moved to recommend passage of Bill 72 on first reading. Seconded by Mr. Inaba. PCPLUD-7 October 3,2023 CHR. KIERKIEWICZ: Council Member Kimball. MS. KIMBALL: Yeah, thank you, Chair. This should look familiar to everyone. Earlier in the year, Council Member Inaba and I introduced a similar bill with a lot of different things in there just to have that broader dialogue as a body about what folks were supportive of with respect to setting some sort of priority for local residents with respect to housing that the Office of Housing manages. There were a couple of flaws with that, in addition to some portions that not everybody was keen on. So what you see now is the result of that conversation. Further discussions with Corporation Counsel Sylvia Wan, mahalo to her for some of the ideas that came through here, and of course collaborating with the Office of Housing. The problematic piece about the bill where how things were ordered has been resolved in this, as well as—so, we've really identified three categories of priority; folks that are qualified residents, folks that are qualified workers, and folks that are qualified returning students. One of the solutions that I actually have to give Deputy Wan credit for was to actually not prescribe the order of these preferences in the bill but allow the Housing Administrator to set them for each individual project. And, you know,the reason I like that is, for example, for some projects it's going to be senior housing. Qualified workers, probably less important to us than being a resident. If it's workforce housing, obviously a qualified worker is going to be the priority. So having that flexibility built in, I think, is a really nice solution there. Additionally, we made the distance from the housing site for the qualified workers also something the Housing Administrator can set. Again, some areas you're going to need 20 miles to get enough residents that work within the area. Others, like next to a resort, you're going to want to focus on a smaller radius. So, that builds in some flexibility based on the project. Happy to pass it over to my colleague, Council Member Inaba. And we also have the Housing Administrator (Susan) Kunz here for any questions from the body. Thank you, Chair. I yield. CHR. KIERKIEWICZ: Mr. Inaba. MR. INABA: Thank you, Chair. I want to mahalo Council Member Kimball and her staff for pretty much working with Deputy Wan on this and happy that we can have a version brought to the council and for the public, you know, even though there are no testifiers here today, this is something that we have previously discussed like Council Member Kimball said, and it really is to benefit those living in our county, working in our county, retiring in our county, and making sure that any affordable housing project that our OHCD (Office of Housing and Community Development) helps to fund or administer does fall in line with these Page 2 PCPLUD-7 October 3,2023 preferences and making sure that we're taking care of our own residents. So, mahalo nui. Administrator Kunz, did you want to say anything at this time? (Note: At this time, Housing Administrator Susan Kunz came forward to address the members of the Committee.) MS. KUNZ: Good afternoon, Council Members. My name is Susan Kunz and I'm the Housing Administrator for the Office of Housing and Community Development. I really want to thank Council Members Kimball and Inaba for their work on this bill. It has gone through a couple of rounds, but I think we've come up with something that is really going to be helpful. The bill really does support first time homebuyers, our community members who are working, and returning students, which was really a focus of the bill. So, the Office of Housing definitely supports this bill. Thank you. MR. INABA: Thank you, Administrator. Thank you, Chair. I yield. CHR. KIERKIEWICZ: Thank you. Any questions or comments for the introducers or Housing Chair? Council Member Kagiwada. MS. KAGIWADA: Thank you. So, this looks great. Thank you so much for working on it and getting it to this point. I guess for Administrator Kunz, because different projects will have different criteria that's prioritized, it seems like something that's going to be super important is communication with the public around each of these and making sure the people really understand since we can't just let people know, you know, ahead of time that for all projects it's going to be such and such and really they're going to really need to know that it is going to be some individuation of the different projects on priorities and stuff So,just thank you for being willing. I know it's going to be a lot of extra work for you guys to make sure that the public is aware for any specific project what these different criteria are. So, thank you. For the makers,just wondering. I thought when we looked at this last time did we talk about any other criteria for possibly getting more points, like you have resident, but I believe at least one of the other counties had more points, the longer you've been a resident, things like that. Is anything like that involved in this or did you decide that that was complicating the issue? MS. KIMBALL: Chair, if I may? CHR. KIERKIEWICZ: Go ahead. MS. KIMBALL: Yeah. Our Corporation Counsel Deputy Wan, they determined that any length of time associated with the residency would not be illegal for us to Page 3 PCPLUD-7 October 3,2023 do. Even though Maui has something like that, there has to be a nexus between that duration and like a benefit. It's kind of like a public benefits stuff, like there has to be a reason why your duration is more meaningful than just your primary residence in terms of the value, and we couldn't get there. So, no, it's the long answer to your question, no, it's not included in this and that's primarily because we couldn't configure consensus that it would be legal. MS. KAGIWADA: Okay, so the current definition of resident is? MS. KIMBALL: It's defined there in the first section. So, it's a full-time resident of the county consistent with the residencies defined in the HRS (Hawai`i Revised Statutes). So, this has to do with like your voting privileges to vote. So, it's tied to that. MS. KAGIWADA: Okay. MS. KIMBALL: There's kind of some built-in duration in there so it's not like it's really simple to determine residency. People will have to have been here a little bit of time to meet the residency requirements in terms of how we've set it up and with the new definition. MS. KAGIWADA: Okay. Well, I know that this is an issue for some people as far as, you know, investing and using our public funds. But it sounds like you've done your due diligence and that's what we can do at this point. So, thank you for doing that. I yield for now. Thank you. CHR. KIERKIEWICZ: Thank you. Council Member Lee Loy. MS. LEE LOY: Thank you. Susan, thanks for being here. I have a question. This pertains to only projects that the Office of Housing is responsible for, right, is that correct? MS. KUNZ: That is correct. MS. LEE LOY: So given—go ahead, go ahead. MS. KUNZ: So, when you look at the language in the bill and it does define that these will be projects that are developed by the Office of Housing County projects, where we are receiving and vetting the applications for the project. So, it does seem to limit perhaps the types of projects or the number of projects that this may apply to, but I clarified with Corporation Counsel that when we are negotiating with the developer or we select a developer, there is an opportunity here to negotiate with them the application of this law to their project. So, there's opportunities to have a discussion about that. Page 4 PCPLUD-7 October 3,2023 MS. LEE LOY: Yeah. And thank you for kind of leading into my next question which was given this new language in your chapter like a scenario that it applies to or would apply to. MS. KUNZ: What project it might apply to? MS. LEE LOY: Yeah. MS. KUNZ: So, I think about the major projects that I currently have, working on, like Kamakoa Nui for example. The first phase that we completed several years ago, 96 single-family units, we were actually the developer and we were actually receiving and vetting applications in that scenario. At that time, we chose to use a 45-mile radius because we felt that the workforce community that we were trying to outreach to, we needed to extend the mile radius to 45 (miles). So, I would say that moving forward, Kamakoa Nui is definitely a project that would be considered for something like this. Now whether or not the Office of Housing is actually doing the development and actually be receiving and vetting applications will be the question. And again, like I said, there seems to be an opportunity to have negotiations with the developer for that. I hope I answered your question. MS. LEE LOY: Yeah. I'm just, you know, housing is in such high demand. And I understand where my colleagues are going, right. We want to make sure that our local family's kind of get first chance for lack of a better description. MS. KUNZ: Yes. MS. LEE LOY: But I guess what I'm trying to understand is, this is a really small area of housing development measured up against all the other types of housing development that comes in front of us because this one is just County. But are you saying it could be applied to a developer to provide this? MS. KUNZ: Yes. MS. LEE LOY: Yes. MS. KUNZ: Yes. So, this chapter, the way it reads and, you know, Council Member Kimball and Inaba, please chime in as well. But my understanding is that this is applicable to county projects where we are receiving and vetting applications for the housing units. And again, Corporation Counsel has indicated that I may have the opportunity to negotiate with the developer if I'm RFP'ing (Request for Proposal) for example a county project out, I could negotiate with them to apply this law to their project and their vetting of applicants to the project. Page 5 PCPLUD-7 October 3,2023 MS. LEE LOY: I'm nodding, I'm nodding. Just thinking through. I guess because I watch a lot of projects come through when we do change of zones and they offer housing, right. And then we strap them all up with various conditions. And then now, in an effort to provide local housing, is the cap on the end. And so, I'm just trying to make that process have more appetite to invite people to come in and say, "Hey, yes." If you come and do a change of zone application that provides housing within these kind of priorities, within Chapter 11, I think there would be more appetite from members of the Council to say, "Yeah, yeah, yeah" we want this project to move along and move along quickly because it'll help us meet the goal that we want which is to provide housing for local families. MS. KUNZ: Yeah. MS. LEE LOY: Got it. MS. KUNZ: I think the challenge with this has been navigating the constitutional right of our people, the American people, right, to move between states. I mean, people should be allowed, or the constitution says that we can move freely, right. And so, folks from Hawai`i can move freely to the United States as well if they choose to live there. And I think that it was the challenge with making sure that we weren't violating any of that with this bill. I think that it definitely is the right step to support, like I said, the first-time homebuyers, and our workforce, and our returning students. It might not be as wide of a net thrown out as we wanted to start out with. But I think it's a really good start. Yeah, I think it's a really good start. MS. LEE LOY: Yeah. Thanks, Susan. MS. KUNZ: Okay. MS. LEE LOY: You know, often times we see projects coming, you know, making representations of meeting a certain AMI (Average Median Income) and that seems to be a deal breaker sometimes with decision makers that if it's at the upper end of 120 (percent) or a 140 percent AMI. There's more appetite to help those at the 60 (percent) or 80 percent AMI, whereas the higher end is actually the workforce, right. It's nurses, it's doctors, it's teachers and firefighters. And so, yeah, you know, if this is a great tool for you to use and have just more colors in your crayon box, Susan, I think might as well give it a shot. I just hope that future development is very well aware of using this as a tool as they come to the Council asking for opportunities to provide housing and it helps us get to the housing that we want, which is for locals. Thanks, Susan. Thank you. I yield. CHR. KIERKIEWICZ: Thank you, Council Member. Council Member Evans. Page 6 PCPLUD-7 October 3,2023 MS. EVANS: Hi. Good afternoon. A couple questions. Under eligibility requirements they talk about the applicant and the applicant's spouse. So, this question, I think, is for Judge (Elizabeth) Strance. It mentions applicant and applicant spouse, but in Hawai`i we recognize marriage, civil unions, and domestic partnerships, which is now known as reciprocal beneficiaries. So, would we not want to have all those covered in this section or does the term spouse cover all those three different types? (Note: At this time, Corporation Counsel Elizabeth Strance came forward to address the members of the Committee.) MS. STRANCE: Thank you. Elizabeth Strance, Corporation Counsel. I'll take that back to Deputy (Sylvia) Wan, who's been working on this bill, and we will get you a response to that question before the next meeting. MS. EVANS: Alright. Thank you. MS. STRANCE: Thank you. MS. EVANS: Thank you. I appreciate it. The other question I have is, you know, I read this twice and I may be missing it, but I don't see first-time homebuyer in here. You've had some administrative rules already established, you've already had eligibility criteria by rules already and I'm wondering if this is cancelling some of them out. Do you have to go back in and actually go through a process of cancelling the current rules you have? And then it says later in this bill, you can establish additional eligibility criteria in your administrative rules. So, how does this affect your administrative rules, and do you have first-time homebuyer? MS. KUNZ: So, if you look under eligibility requirements, (a)(1), so, actually the same section that you were referring to, if you read further down, it talks about owning the majority interest of more than 50 percent in a fee simple or leasehold of any real estate property. So, when I talk about supporting first-time homebuyers, I'm looking at the language that's in that section. MS. EVANS: Okay. But in terms of qualified—okay. So, there's no comment in here about first-time homebuyers, but do you think first-time homebuyers because you already have it in your current administrative rule on eligibility? MS. KUNZ: No. I'm just looking at the language in that section right there. MS. EVANS: Okay, so where would the guidance be for you to look at first-time homebuyers? Is it somewhere or is it the grantor, when they give you money, says we want this preference to go to first-time homebuyers? I'm trying to figure out where it fits in. Page 7 PCPLUD-7 October 3,2023 MS. KUNZ: It's the language in (a)(1), that is referring to the eligibility of folks for projects related to first-time homebuyers. So, I'm not really looking any other administrative rule or anything like that. I'm just looking at the language that's there in this bill. CHR. KIERKIEWICZ: Thanks, Administrator. I'm going to ask Council Member Inaba to also shed some light on the question. MS. KUNZ: Thank you. MR. INABA: Yeah, to kind of read to what Administrator Kunz is saying, we're simply using what's in(a)(1) to determine whether they're eligible or not. We're not saying they have to be a first-time homebuyer because somebody could've lost their home 10 years ago, and, you know, they bought a home 20 years ago. And if we put that language in it would disqualify them because they're technically not a first-time homebuyer. So, this is just saying what they can't have if they own majority share in real estate that's suitable for dwelling purposes, then they're not going to be eligible. So, that's the criteria by which Administrator Kunz and her team are going to be evaluating whether or not they— MS. EVANS: Whether it might be an investment perhaps. MR. INABA: Yeah, yeah. MS. EVANS: Thank you. MR. INABA: Thank you. MS. EVANS: Appreciate it. Thank you. CHR. KIERKIEWICZ: Any other questions, Council Member Evans? MS. EVANS: Yes. Just lastly, administrative rules. So, will you be changing your administrative rules? MS. KUNZ: I don't have to change administrative rules in order to comply with this amendment to Chapter 11. So, I'm good. MS. EVANS: Thank you. I yield. CHR. KIERKIEWICZ: Thank you. Council Member Galimba. MS. GALIMBA: Thank you. So, I was just looking at the HRS (Hawai`i Revised Statutes) around defining resident and it seemed really vague. So, I'm Page 8 PCPLUD-7 October 3,2023 asking Susan, I think,just wondering what you would use, and maybe you already have this set up, what kind of evidence that you would want for defining resident? MS. KUNZ: You know, thank you for asking that question. We've had a lot of discussion in-house about this. So, in the definition of qualified resident, HRS 235-1, talks about the Tax Code. So, you know, using that as a reference, it could be things like tax returns. I mean we could be looking at voter registration, State ID's, but when I spoke to Sylvia Wan, Corporation Counsel, she said that we would next need to work on creating some type of policy which we will define documentation and things like that. But, yeah, good question. Thank you. MS. GALIMBA: Thanks for providing some detail on that. I yield. CHR. KIERKIEWICZ: Thank you. Council Member Kagiwada. MS. KAGIWADA: Thanks. Going back to Section 11-13(a)(1). So,just so I understand this. So, you could be married to somebody else and own a house together where you own 50 percent of that house and still be eligible for applying for this? So you separate, but you still own 50 percent of a house, would you still be eligible under this criteria to apply? MS. KIMBALL: Chair? CHR. KIERKIEWICZ: Council Member Kimball. MS. KIMBALL: Yeah. So, if you have an applicant and a spouse and they jointly hold the interest in the property, which is 50 percent, and most homes that are held jointly, you each own 100 percent, right, it's a little bit different. MS. KAGIWADA: Okay. MS. KIMBALL: But there are legal scenarios where you would each own 50 percent. In that scenario, if you were then living apart, you would be eligible. But that is going to be a pretty weird criteria. MS. KAGIWADA: And you could still keep your 50 percent in another house? MS. KIMBALL: No. I don't think so. Not per this, but per other parts of Chapter 11, because remember this is living in Chapter 11. MS. KAGIWADA: Right. Okay. That's what I was missing here. So, if you've previously owned a house or half of a house, I mean you could've got into it with a friend. It could be a duplex. I don't know. Whatever it is. But you could still be eligible, but you wouldn't be able to keep that property and be eligible. That's what you're saying? Page 9 PCPLUD-7 October 3,2023 MS. KIMBALL: That's correct. In fact, you're not eligible if you own it at the time that you apply. MS. KAGIWADA: Okay. Only if you previously did? MS. KIMBALL: Yeah. And that's where I think some of the confusion was before with Council Member Evans. I mean, we say first-time homebuyer, it probably will be much of the time first-time homebuyers. But it also, the scenario that Council Member Inaba suggested too, where you had a home and you lost it, you would also be eligible under this. Just so everybody's clear where this came from, this language is actually in rule for Housing right now. And we were asked at one point to include, since it's already in rule, to actually bring it up and elevate it here. MS. KAGIWADA: So, can I just follow up on that. So, if you had a house that you shared with your spouse, so you had 100 percent of it, in this case you're talking about, and lost it, you would not be eligible? MS. KIMBALL: If you had a house and you lost your interest in it at the time that you came to apply, you didn't have any vested interest in a residential property, you would be eligible. MS. KAGIWADA: Okay. The 50 percent or more. Okay. I have one more question and it might not be in here at all or might not reside anywhere, but is there any thought to if people are buying affordable homes, resale, flipping for profit, keeping those homes affordable, does that have any place here or is that something totally separate? MS. KIMBALL: Chair, if I may? CHR. KIERKIEWICZ: Okay, go ahead. MS. KIMBALL: Yeah, it's not part of this bill. It's probably part of a bill later on. There are guidelines in Chapter 11 already. So, again, this lives in Chapter 11, so there are rules around that. I believe it's 10 years right now. But that is something we'll be revisiting. MS. KAGIWADA: Okay. Thank you. I yield. CHR. KIERKIEWICZ: Any other questions or comments? Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you, Chair. I was thinking back to a meeting, it was either here or it was at a community meeting. But I remember Page 10 PCPLUD-7 October 3,2023 someone saying, we were talking about affordable housing. As we begin to make affordable housing, because there's a huge push for that because we have a crisis right now, anybody is eligible for that housing. So, if we don't start to qualify our residents; local people to be more eligible for the housing, then we are building for the nation. And that bothered me. That really did bother me. So, I'll be supporting this bill today for that reason alone. I like that you two have gone out of your way and actually created a fairly brilliant bill as far as addressing how we make sure residents legally can be qualified and prioritized. So, thank you. CHR. KIERKIEWICZ: Council Member Lee Loy. MS. LEE LOY: Thank you. And I was actually thinking up some of the scenarios that Ms. Kagiwada was discussing. So, you can't own a property to go get one with this bill. So you already have a parcel, but if you live elsewhere then you can, as long as you fall into this safety net of who would be eligible. I see nods. I understand it correctly? Okay, thanks. I yield. CHR. KIERKIEWICZ: Any final comments or questions? Thank you both for your work to refine this initial discussion that we had. I appreciate the work to ensure the work to ensure that folks that have been here for generations, who have been forced to move, but would like to come back home now have an opportunity to do so. Again, fully recognizing that this is just related to housing that OHCD is developing, so again, want to manage expectations around this. But we do now have a point of reference for OHCD to use going forward in negotiating with housing developers, which I can appreciate. Doesn't tie them to this per se, but now we just have, I think, a little bit more of a framework in place for OHCD to use in negotiations. So, I can appreciate that and thank you both for your effort. Alright, there is a motion on the floor to forward Bill 72 to the Council with a favorable recommendation. All in favor, please say "aye." Vote on Bill 72: The motion to recommend passage of Bill 72 on first (Approved) reading was carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kaneali`i-Kleinfelder Kimball, Lee Loy, and Chair Kierkiewicz— 8. Noes: None. Absent: Committee Member Villegas— 1. Excused: None. Page 11 PCPLUD-7 October 3,2023 ADJOURN- There being no further business, at 1:47 p.m., Mr. Inaba moved to adjourn the MENT: meeting. Seconded by Ms. Lee Loy, and carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kaneali`i-Kleinfelder Kimball, Lee Loy, and Chair Kierkiewicz— 8. Noes: None. Absent: Committee Member Villegas— 1. Excused: None. CHR. KIERKIEWICZ: We are adjourned at 1:47 p.m. Approved Ms. Ashle L. Kierkiewicz, Chair (Date) Policy Committee on Planning, Land Use, and Development AK/tk Page 12