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HomeMy WebLinkAboutBIL 207 Draft 01 2024-2026 COUNTY OF HAWAII •' ?.,,,', • STATE OF HAWAI`I BILL NO. 207 ORDINANCE NO. AN ORDINANCE AMENDING CHAPTERS 2 AND 11 OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION,AS AMENDED),RELATING TO AFFORDABLE HOUSING. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAI`I: SECTION 1. Chapter 2, article 13, division 3, sections 2-74 and 2-75, of the Hawai`i County Code 1983 (2016 Edition, as amended) are hereby repealed. SECTION 2. Chapter 11 of the Hawai`i County Code 1983 (2016 Edition, as amended) is hereby repealed. SECTION 3. The Hawai`i County Code 1983 (2016 Edition, as amended) is amended by adding a chapter to be appropriately inserted and to read as follows: "CHAPTER 11 HOUSING Article 1. Affordable Housing. Section 11-1. Title. This article shall be referred to as the County of Hawai`i affordable housing policy. Section 11-2. Objectives. The objectives of this affordable housing policy are to: (1) Implement goals and policies of the general plan; (2) Promote and assist private development of housing for senior citizens,persons with disabilities and qualified households; (3) Use available governmental grants and funds in the development of affordable housing and increase the capabilities of qualified households to obtain affordable housing; (4) Support innovative, lower-cost approaches which may be used in the development of affordable housing; (5) Require residential developments, large resorts,project districts and industrial enterprises to address the anticipated affordable housing demands as a condition of rezoning, subdivision approvals, or by-right exemption based upon prevailing economic and housing conditions; and (6) Require residential developers to include affordable housing in their projects or contribute to affordable housing off-site. Section 11-3. Definitions. The following words and phrases,unless the context otherwise requires, are defined as follows: "Affordable housing"means affordable lots sold or affordable housing units that are rented or sold at cost levels that are affordable to qualified households. "Affordable housing agreement"means the contract that a developer executes with the County which specifies the terms and conditions under which the developer will meet an affordable housing requirement or the provisions of any by-right exemptions consistent with the intent and purpose of this chapter. "Affordable housing credit"means a unit of measurement used to calculate and satisfy an affordable housing requirement. "Affordable housing guidelines"means household income levels at certain thresholds of the AMI, determined and published by the housing administrator for the purposes of determining affordable sale prices and rentals rates for affordable units and lots. "Affordable lot"means a finished lot for sale to an eligible buyer for the purpose of constructing and inhabiting a dwelling as the primary residence for the respective buyer. "Affordable unit"or"affordable housing unit"means a dwelling unit for sale or rent which serves as the primary residence for the respective buyer or renter and is affordable to qualified households.An affordable unit shall be completed with road access, drainage,water, electricity,and sewer lines, if required, and broadband connectivity. "AMI"means the area median income of the County, adjusted for household size, as calculated by the United States Depaitinent of Housing and Urban Development. "Bonus credit"means an affordable housing credit given pursuant to section 5(a)of Resolution No. 65, adopted by the Hawai`i County Housing Agency and dated May 2, 1990. "Developer"means any person, partnership, or cooperative,whether for-profit or not-for-profit, seeking to rezone, subdivide, or develop land. "Dwelling unit"means a residence that provides complete, independent living facility for one or more persons, including spaces for cooking, sleeping, living and sanitation. "Eligible buyer"means a person who meets eligibility requirements, including income limitations, as established by this chapter or by rule. "Excess credit"means an affordable housing credit earned through the production of affordable housing in excess of an affordable housing requirement or as otherwise provided by State law. "Finished lot"means a property with road access, drainage,water, electricity, broadband connectivity, and, if required, sewer lines without unusual site conditions that make it difficult to build a dwelling. "Full-time equivalent"means a unit of measurement equal to one employee 2 working full-time hours or a combination of part-time or temporary employees whose aggregated working hours equal full-time hours.For the purposes of this chapter,the calculation of full-time equivalent hours is used to estimate the expected workforce generated from a development and the subsequent need for affordable housing units. "Marketing plan"means a comprehensive document that sets forth the strategies, actions, and resources required to advertise and sell affordable units or lots within a housing development. "Nonprofit organization"means an organization that is registered and in good standing in the State of Hawai`i as a nonprofit organization and maintains a tax exemption under section 501(c)(3)of the Internal Revenue Code of 1986, as amended. "Project site"means the specific location where a project is being planned, developed, or executed, including all parcels of real property,rights-of-way, easements, and access roads upon which the project and its related infrastructure will be located. "Qualified household"means an individual or two or more related by blood, state- sanctioned adoption, foster parentage,guardianship,or marriage, occupying a dwelling unit and whose total household income is within the affordable housing guidelines or who would otherwise qualify in a State or federal affordable housing program. "Qualified resident"means a person who is a full-time resident of the County, consistent with residency as defined in the Hawai`i Revised Statutes, sections 235-1 and 11-13, as demonstrated by evidence satisfactory to the housing administrator. "Qualified returning student"means a person who was a qualified resident immediately prior to leaving the County to attend a university, college, or a trade school and who has not taken affirmative steps to relinquish their resident status within the County.A returning student may use the evidence of residency of a parent or guardian to demonstrate that the student was a qualified resident prior to their temporary departure from the County. "Qualified worker"means a person who earns at least seventy-five percent of their income within a distance specified by the housing administrator of any affordable housing project, as demonstrated by evidence satisfactory to the housing administrator. "Rezone"refers to a change in zoning district pursuant to chapter 25 of this Code. Section 11-4. Affordable housing requirements. (a). The affordable housing requirements shall apply to: (1) All new rezonings that may create additional residential uses,including rezonings to RS,RD,RM,RCX,RA and FA districts, and APD rezonings where lot sizes are less than five acres, and CG, CV, CN and PD districts when residential uses are established in those districts; (2) All new rezonings to resort, including hotels established in V, CV, CG, CDH or PD districts; (3) All new rezonings to ML,MG, and MCX districts; (4) All prior rezoning actions that contain affordable housing conditions that have not been satisfied as of the effective date of this ordinance, or to which the County has not agreed previously as to the specific means of satisfying the requirements; and (5) If not otherwise subject under any of the preceding paragraphs,any subdivision of a parcel into five or more lots that are less than five acres. 3 (b) Requirements for residential uses. (1) Four or fewer dwelling units or lots:no requirement. (2) Five or more dwelling units or lots:the developer shall earn affordable housing credits equal to twenty percent of the number of units or lots,rounded to the nearest one-half credit. (3) Time share units shall be considered as dwelling units. (4) For the purposes of calculating affordable housing requirements under this chapter,the total number of units shall include all existing dwelling units located on the subject parcel, in addition to any proposed new units or lots.A development is subject to affordable housing requirements when the aggregate number of existing and proposed units exceeds four. (5) For the purposes of determining affordable housing requirements,the sale of finished lots without any constructed units shall be evaluated as one dwelling unit each. Subsequent development or sale of the parcel is subject to a separate affordable housing requirements if the proposed number of units exceeds four. (c) Requirement for resort and hotel uses. The number of credits required of resort and hotel uses generating more than one hundred employees on a full-time equivalent basis shall be equal to one-fourth of the number of full-time equivalent jobs created, rounded to the nearest one-half credit. (d) Requirements for industrial, commercial, and mixed-use districts. The industrial, commercial, and mixed uses that must fulfill the affordable housing requirements are any uses permitted as of right in the ML,MG,MCX,V, CV, CG, CN, CDH, and PD district. (A) The number of credits required of individual industrial and commercial enterprises generating more than one hundred employees on a full-time equivalent basis shall be equal to one-fourth of the number of full-time equivalent jobs created,rounded up to the nearest one-half credit. (B) The number of credits required of rezonings to ML,MG,MCX,V, CV, CG, CN, CDH, or PD with the potential to generate more than one hundred employees on a full-time equivalent basis shall be equal to one- fourth of the number of full-time equivalent jobs created, rounded up to the nearest one-half credit. (i) At the time of rezoning,the potential job generation shall be assumed to be ten full-time equivalent jobs per acre to determine whether subsequent development within the rezoned area must satisfy an affordable housing requirement. (ii) At the time of plan approval,the affordable housing requirement shall be based upon ten full-time equivalent jobs per acre, or one per 1,000 square feet of gross floor area,whichever is greater.The number of jobs may be adjusted based on proof satisfactory to the housing administrator that the actual number of jobs created will deviate from this standard,provided that the affordable housing requirement shall be reassessed if the use is changed.Prior to the 4 issuance of a certificate of occupancy,the housing administrator may reassess the square footage for the purposes of this provision. (e) For the purposes of determining affordable housing requirements for development types under subsections(c)and(d): (1) All existing hotel units, dwelling units, and gross floor area located on the project site not previously subject to an affordable housing requirement shall be considered in addition to the proposed new development; and (2) A project is subject to the applicable affordable housing requirement when the aggregate of existing and proposed development meets or exceeds the minimum thresholds established in subsection(c) and(d). Section 11-5. Satisfaction of affordable housing requirements. (a) The developer may satisfy the affordable housing requirements by doing any of the following: (1) Construct and sell affordable for-sale units on-site; (2) Construct and sell affordable finished lots on-site,provided that the entire project consists of finished lots and subject to the approval of the housing administrator prior to sale; (3) Construct and sell affordable for-sale units off-site,but within the same judicial district or within fifteen miles of the project site, if not located within the same judicial district of the project site; (4) Construct and rent affordable rental units on-site or off-site within the same judicial district, or within fifteen miles of the project site if located outside the judicial district; (5) Convey to the County, or at the County's direction to a nonprofit entity, developable land within the same judicial district or within fifteen miles of the project site if located outside the judicial district;provided that: (1) Use of this method to satisfy any portion of an affordable housing requirement is subject to the approval of the housing administrator; and (2) The land to be conveyed has adequate road access,water,electricity, and • broadband connectivity,with no unusual site conditions that would prevent development of the number of dwelling units otherwise required; (6) Convey to the County, or at the County's direction to a nonprofit entity, infrastructure within the same judicial district or within fifteen miles of the project site if located outside the judicial district,provided that the infrastructure is directly related to future development of affordable housing; (7) Obtain excess credits from another developer pursuant to section 11-15; and (8) Pay an in-lieu fee,which shall be deposited into the affordable housing production fund;provided that the developer has an affordable housing requirement of no more than ten credits. (b) Notwithstanding section 11-6(a)(2), a developer of a small-scale rental development may satisfy the affordable housing requirement based on rent-restricted units constructed on-site,provided the following criteria are met: (1) Applicability. (A) The development contains no more than twenty-five dwelling units; 5 (B) The development does not exceed three acres in size,measured as gross parcel area; (C) All dwelling units within the development are offered as rental housing; (D) A qualified resident owns more than fifty percent of the interest in the development,whether directly or through a legal entity; and (E) The development does not utilize Low-Income Housing Tax Credits, United States Department of Housing and Urban Development funding, or other federal programs requiring income-based tenant qualification. (2) Rent-Based Affordability Standard. The rental units are rented at the monthly affordable rent price established by the affordable housing guidelines set forth under section 11-7 for a household earning no more than 80%of the AMI.A developer earns one credit per rental until under this subsection. Tenant income verification is not required for a development subject to this subsection. (c) Rent-to-own dwelling units shall be classified as rental units for the purposes of this chapter unless one hundred percent of the tenant's monthly rent payments are contractually credited toward the purchase price of the dwelling unit for the full duration of the tenant's occupancy. (d) The affordable housing units must be consistent with the overall project. When affordable units are constructed on-site within the same facility or subdivision as the market units,the affordable and market units shall have a consistent mix of bedroom sizes. Construction plans are subject to review and approval by the housing administrator to comply with this subsection. (e) Until an affordable housing requirement is fully satisfied, construction of market- rate units or lots may not proceed beyond each twenty percent increment unless the corresponding cumulative twenty percent increment of the affordable housing requirement has been satisfied;provided that,the affordable housing requirement must be fully satisfied prior to construction of the final twenty percent of the total market-rate units or lots. Section 11-6. Affordable housing credits; amount earned by affordable housing. (a) A developer shall earn affordable housing credits in the following amounts as set forth hereinbelow: (1) For each sale of a completed dwelling unit to a qualified household with an income: (A) Not less than 120%and not more than 140%of the AMI, 0.5 credit; (B) Not less than 100%and less than 120%of the AMI, 1 credit; (C) Not less than 80%and less than 100%of the AMI, 1.5 credits; and (D) Less than 80%of the AMI;2 credits; (2) For each rental of a rental unit to a qualified household with an income: (A) Not less than 100%and not more than 140%of the AMI, 0.5 credit; (B) Not less than 80%and less than 100%of the AMI, 1 credit; (C) Not less than 60%and less than 80%of the AMI, 1.5 credits; and (D) Less than 60%of the AMI; 2 credits; and (3) For each sale of a finished lot to a qualified household with an income: (A) Not less than 100%and not more than 140%of the AMI, 0.5 credit; 6 (B) Less than 100%of the AMI; 1 credit. (b) When a developer elects to satisfy an affordable housing requirement under paragraph(a)(1),paragraph(a)(2), or any combination thereof,at least ten percent of the required credits must be earned at the two credit per unit level. (c) This section does not apply to any affordable housing credits earned pursuant to the Hawai`i Revised Statutes, section 46-15.1(b) or(c),which are issued on a one- credit for one-unit basis. Section 11-7. Affordable housing credits; amount earned by other means. (a) The number of credits earned under section 11-5(a)(5) shall equal one-half of the number of affordable dwelling units that the housing administrator determines can reasonably be constructed on the conveyed land; except that, subject to the approval of the housing administrator, a developer may convey land exclusively for construction of for-sale housing units affordable to qualified households earning no more than 80%of the AMI, or for construction of rental housing units affordable to qualified households earning no more than 60%of the AMI, in which case the numbers of credits earned shall equal the number of affordable dwelling units as determined by the housing administrator. (b) The number of credits earned under section 11-5(a)(6) shall equal the ratio,rounded to the nearest half credit, of the appraised value of the infrastructure to be conveyed to the affordable sales price of an affordable dwelling unit for a household of four persons with an income 100%of the AMI. Section 11-8. Affordable housing guidelines. At least once every twelve months,the housing administrator shall issue affordable housing guidelines,which shall determine: (1) The price of a completed unit of various sizes that is affordable to households with incomes at various percentages of the AMI,using the average interest rate over the previous twelve months for a thirty-year conventional fixed mortgage, as published by the United States Federal Home Loan Mortgage Corporation; except that,when the housing administrator finds that the average over the previous twelve months substantially deviates from the . current mortgage rate,the housing administrator may, in lieu thereof,use the average interest rate over the previous six months; (2) The price of a finished lot that is affordable to households with incomes at various percentages of the AMI, calculated as the price of a dwelling unit with three bedrooms, as determined hereinabove, less the cost to build asingle- family home with a size of 1,100 square feet,based on figures collected and provided by the director of public works for the purposes of reviewing and issuing building permits;and (3) The monthly rental rate of dwelling units of various sizes that is affordable to households with incomes at various percentages of the AMI,based on a rental rate equal to 30%of monthly income. 7 Section 11-9. Sale of affordable housing units and affordable lots. (a) The sale of all affordable housing units or affordable lots shall be made available to eligible buyers who meet the income qualifications and other eligibility requirements pursuant to the affordable housing agreement and this chapter. (b) For sale affordable housing units shall be sold on a per unit basis using mortgages where the term is fixed for a minimum of at least fifteen years. (c) The developer shall ensure that the deed of the affordable housing unit shall include the requirement that the buyer will utilize the dwelling as their permanent and primary residence. The developer shall ensure that the deed of the affordable lot shall include the requirement that the buyer will utilize the dwelling constructed thereon as their permanent and primary residence. The deed for an affordable housing unit or affordable lot shall further include all resale restrictions per section 11-14. (d) Marketing Plans.At least two hundred and ten days prior to the commencement of the sale of the affordable housing units or affordable lots within the project,the developer shall submit a marketing plan for the project for written approval by the housing administrator. The marketing plan must set forth the strategies, actions, and resources that the developer intends to utilize to advertise and sell affordable units or lots. (e) The housing administrator shall review prospective buyer applications to determine income eligibility. (1) After all applications for income eligible buyers have been exhausted,then at the discretion and approval of the housing administrator,the developer may market the units to households at a higher income level, in accordance with section 11-13(a)(2), at the initial affordable sales price. (2) Notwithstanding the foregoing, at any time after all applications for income eligible buyers have been exhausted,the housing administrator may authorize the County to purchase any unsold unit or lot at the affordable sales price. (f) A developer shall ensure that all sales of affordable housing units or lots for which credit was earned or awarded include a recorded deed restriction describing all restrictions and obligations of the owner. Section 11-10. Buyer of affordable lots. The purchaser of an affordable lot that is used to fulfill an affordable housing requirement, and that is sold during the initial marketing period, shall enter into a binding contract for the construction of a residence on the lot within three years of the date of sale, and complete construction within five years of the date of sale, or, if the purchaser is an owner-builder, shall commence construction within three years and complete construction within five years of the date of sale. During this five-year period,the purchaser may sell only to eligible buyers, or to the County, as determined by the housing administrator, and the sales price shall not exceed the original purchase price,plus an inflation factor based on the increase in the Consumer Price Index for Honolulu, and reasonable compensation for improvements, if any,made by the purchaser. If the purchaser does not meet these time limits,the purchaser shall offer to sell the lot to the County, or, at the election of the housing administrator,to eligible buyers, at a price that does not exceed the original purchase price,plus an inflation factor based on the 8 Consumer Price Index for Honolulu,plus reasonable compensation for improvements, if any,made by the purchaser. Section 11-11. Rental of affordable units. (a) The housing administrator shall issue affordable housing guidelines.These guidelines calculate the affordable rental price for various household sizes annually. The affordable rental price shall not exceed the published rental rate for the AMI specified within the affordable housing agreement. (b) The developer shall enter into an affordable housing agreement and any other necessary agreements to impose rental price controls on the affordable units for no less than twenty-five years after initial occupancy. (c) All agreements shall be recorded against the property by the developer. Section 11-12. Affordable housing agreement. (a) A developer subject to an affordable housing requirement shall execute an affordable housing agreement with the County,prior to: (1) Final subdivision approval or plan approval for any for-sale residential project; or (2) Issuance of a certificate of occupancy for any multi-family rental,resort, hotel, commercial,mixed-use, or industrial project. (b) No later than thirty days after execution of an affordable housing agreement,the developer shall record the agreement with the bureau of conveyances against the property.The agreement shall run with the land and bind the developer, its successors and assigns, until all obligations have been satisfied,whereupon the County shall issue a release. (c) An affordable housing agreement shall include provisions that: (1) Identify the developer,the County, and the subject property, including all tax map key numbers and applicable approvals; (2) Specify the number of affordable housing credits required and the method of compliance under section 11-5; (3) Reference and incorporate all applicable requirements of this chapter, including,but not limited to: (A) Affordable sales price determinations under section 11-7; (B) Sale of units and lots under section 11-9; (C) Buyer obligations under section 11-10; (D) Rental price controls under section 11-11; (E) Eligibility and preference requirements under section 11-13; and (F) Resale restrictions under section 11-14; (4) Establish deadlines and annual reporting for performance consistent with this chapter; (5) Provide for enforcement and remedies in the event of non-performance, including specific performance and other remedies available at law or equity; (6) Provide procedures for amendment,recordkeeping, and release; and (7) Such other provisions as the housing administrator may require to ensure compliance with this chapter. 9 (d) Upon satisfaction of the affordable housing requirement,the County shall issue a release or partial release of the agreement,which shall be recorded by the developer. Section 11-13. Eligibility; preference. (a) Eligibility requirements. (1) The applicant, and the applicant's spouse or reciprocal beneficiary if applicable,may not independently or jointly,unless separated and living apart under a decree from a court of competent jurisdiction, own a majority interest of more than fifty percent in fee simple and/or leasehold of any real estate property that is suitable for dwelling purposes or lands under any trust agreement or other fiduciary arrangement in which another person holds legal title to such land. (2) The housing administrator may allow households with incomes up to twenty percent greater than the income on which the maximum sales price was based to be qualified to purchase a unit;provided that the household income does not exceed 140%of the AMI. (3) The housing administrator may establish additional eligibility criteria in administrative rules. (b) Unless otherwise prohibited by a grantor to the County for an affordable housing project, for any affordable housing project for which the office of housing and community development is responsible for receiving and evaluating applications, the housing administrator shall: (1) Define the distance from the affordable housing project to be used to identify qualified workers, if applicable; (2) Determine order of preferences and rank applicants based on the following preference categories: (A) Income eligible qualified resident; (B) Income eligible qualified worker; and (C) Income eligible qualified returning student; or (D) Other preference categories, and subcategories within each preference category, as determined by the housing administrator. (3) After determining preference categories,select applicants through a lottery system; and (4) Validate the preference status of an applicant prior to occupancy of an affordable unit. Section 11-14. Resale restrictions. (a) The following provisions shall apply for a period of fifteen years from the first date of sale for each affordable housing unit or affordable lot sold pursuant to this chapter: (1) The resale of an affordable unit or affordable lot shall be sold only to eligible buyers as approved by the housing administrator; (2) The affordable unit or affordable lot may only be sold to another eligible buyer in the same or lower AMI level as used to determine the original affordable sales price; and 10 r _ (3) Except as otherwise provided in section 11-10,the resale price of an affordable dwelling unit or lot shall be determined by the same AMI level used to determine the original affordable sales price, as adjusted annually, plus reasonable compensation for improvements.If a dwelling unit has been constructed on an affordable lot,the unit shall be resold as an affordable dwelling unit to an eligible buyer in the same or lower AMI level for that unit size. (b) The buyer of any resold affordable unit or affordable lot shall utilize the dwelling, or any dwelling constructed thereon, as their permanent and primary residence. (c) The housing administrator may establish additional resale restrictions by rule to ensure that units created under this policy remain affordable. Such rules may include, but not be limited to,buy-back, shared appreciation, and other restrictions. (d) The housing administrator shall have the authority to impose the resale restrictions applicable to the resale of affordable units or lots at a County-funded or County- developed affordable housing project. (e) The resale of any affordable unit or lot shall include a recorded deed with the same restrictions and obligations of the previous owner. Section 11-15. Excess credits; bonus credits; credits under HRS,section 46-15.1. (a) Developers who construct new affordable housing units in excess of any requirements imposed under this chapter or any other code, statute,or executive order shall not earn"excess credits". (b) Existing excess credits may be transferred to fulfill part or all of the affordable housing requirements of a project located within the same judicial district as the project site where the excess credits were earned, or within fifteen miles of that project site if located outside the judicial district. The developer shall obtain written approval for the transfer of excess credits from the housing administrator before initiating any such transfer. The housing administrator shall validate the transfer upon completion of the transaction.Excess credits transferred in violation of this section are voidable at the discretion of the County. (c) Affordable housing credits,bonus credits, and excess credits existing as of the effective date of this ordinance shall be valid until ten years after the effective date - of this ordinance.Any such credits not used to satisfy an affordable housing requirement within that period shall be deemed null and void. (d) Bonus credits may only be used by the developer that earned the credits to satisfy part or all of an affordable housing requirement. Satisfaction of all or part of an affordable housing requirement with bonus credits is subject to re-calculation by the housing administrator based on the method and calculation of credits earned set forth in section 11-6 or 11-7. (e) Affordable housing credits earned pursuant to the Hawai`i Revised Statutes, section 46-15.1(b) or(c)may be used to satisfy an affordable housing requirement. Credits existing as of the effective date of this ordinance shall be governed by subsection (c). Credits earned after the effective date of this ordinance shall be valid for ten years from the date earned. 11 Section 11-17. Effect on existing requirements. This article supersedes all previous affordable housing requirements and Resolution No. 65, adopted by the Hawai`i County Housing Agency and dated May 2, 1990, and Ordinance Nos. 98-01, 05-23, 05-111, 07-109, 07-110, 11-38, 11-84, 12-81, 14-08, 14- 37,22-77, 23-20, 23-77, and 24-18. Any affordable housing condition or portion thereof in any prior rezoning ordinance that has not been fully satisfied as of the effective date of this ordinance shall be reassessed pursuant to this policy unless the County has previously agreed as to the specific means of satisfying the requirements, in which case, this amended policy shall apply only to the extent it is not inconsistent with the agreement. In no event shall the County reimburse or be obligated to reimburse any person or entity for the partial or full satisfaction of an affordable housing condition in any ordinance that took effect prior to the effective date of this ordinance. Section 11-18. Adoption of rules. The housing administrator may adopt such rules pursuant to Chapter 91,Hawai`i Revised Statutes,necessary for the purposes of this chapter. Section 11-19. Reports by housing administrator. (a) Affordable housing agreements. Within thirty calendar days following the date of execution of any affordable housing agreement executed in satisfaction of this chapter,the housing administrator shall submit a copy of the affordable housing agreement to the council. (b) Quarterly reporting. The housing administrator shall provide reports to the council relating to the activities of each quarter. Reports shall cover the following periods: January through March;April through June; July through September; and October through December and be submitted to the council within sixty calendar days following the end of each period.Each report shall include the following: (1) A list of developers in possession of excess affordable housing credits and the number of affordable housing credits each developer has earned,transferred, redeemed, and remains in possession of as of the end of the quarterly reporting period; (2) A summary of the current affordable housing inventory; and (3) An accounting of significant actions taken under authority of this chapter including,but not limited to: (A) For sale affordable housing units developed and sold; (B) Finished affordable housing lots constructed and sold; (C) Affordable housing rental units constructed and being rented; (D) Developable land conveyed; (E) Infrastructure conveyed; (F) Density bonuses granted; and (G) In-lieu fees collected in satisfaction of requirements of this chapter. 12 Article 2. Housing Production Funding. Section 11-21. Affordable housing production fund. (a) At least$15,000,000 per year shall be appropriated into a fund known as the affordable housing production fund,which the housing administrator shall administer and manage. (b) The purpose of the fund is to facilitate programs that support affordable housing production.Any remaining balance at the end of the fiscal year shall not lapse and shall remain designated for this purpose. Section 11-22 Use of the affordable housing production fund. (a) Use of the affordable housing production fund is restricted to the following: (1) Planning, design, and development of affordable housing units either by the County or by eligible housing development partners, as may be further described by rule; (2) Exercising the buy-back option running in favor of the County contained in any conveyance document and to pay the costs of maintaining,repairing, renting, or reselling units purchased by the County pursuant thereto; (3) Acquisition of vacant land for use as affordable housing,that may be developed by the County or by non-profit partners; (4) Acquisition of existing structures for use as affordable housing; (5) Rehabilitation of existing structures currently in use as affordable housing or acquired by the County to use for affordable housing; (6) Infrastructure to support affordable housing development; (7) Subsidies,grants, and loans to support very low-income, lower-income, and moderate-income households with upfront costs for rental units or mortgage financing; (8) Subsidies, grants, and loans to support eligible buyers of finished lots with construction loans, or up-front mortgage financing fees; (9) Subsidies, grants,and loans to support very low-income, lower-income, and moderate-income households with rental assistance or mortgage payments to prevent houselessness or foreclosure; (10) Purchasing of deed restrictions on private properties limiting resale to qualified buyers at resale values for lower-income and moderate-income households in perpetuity, as the housing administrator may establish by rule; and (11) Other eligible activities that support the addition or preservation of affordable housing units,provided that the proposed use complies with the parameters and requirements established by this section and as may be further established by rule. (b) Any interest earned by the fund and any advanced costs that are recovered from housing project funds shall be returned to the affordable housing production fund. (c) As used in this section, unless the context otherwise requires; "Lower-income household"means households with incomes not less than 50%and less than 80%of the AMI. "Moderate-income household"means households with incomes not less than 13 80% and not more than 140% of the AMI. "Very low-income household"means households with an income less than 50% of the AMI. Article 3. Exemptions and Incentives. Section 11-23. In-lieu housing fee. (a) Applicability. A project with a requirement of no more than ten affordable housing credits may satisfy the requirement through payment of an in-lieu fee. (b) Fee Amount. For each affordable housing credit required,the in-lieu fee shall equal the affordable sales price for a three-bedroom home at 50% of the AMI, as established by affordable housing guidelines under section 11-7. Any half credit requirement shall be equal to half of the in-lieu fee requirement. (c) Timing of Payment. (1) Fees shall be paid prior to issuance of building permits for market-rate units. (2) If permits are issued for only part of a project, fees shall be based on the units to be permitted for that part of the project. (3) Delayed payments shall be recalculated using the fee amount in effect at the time of payment. (d) Use of Funds. Monies collected under this section shall be used for the development, improvement, or maintenance of affordable housing within the same judicial district as the project for which the fee was paid. Section 11-24. By-right exemptions for affordable housing developments. (a) Notwithstanding any provision to the contrary, the housing administrator may: (1) With the concurrence of the planning director: (A) Increase the height limits applicable to a qualifying development by no more than ten percent, when the increased height limit will provide additional parking space or habitable space; (13) Reduce the setbacks or yard requirements of a qualifying development by no more than fifteen percent, except within a special management area or shoreline setback under the Hawaii Revised Statutes, chapter 205A; (C) Reduce or eliminate any fair share contribution or other exaction that would have otherwise been required of the qualifying development; and (2) With the concurrence of the director of public works, reduce, relax, waive, eliminate, or modify any requirement, standard, or obligation applicable to a qualifying development, as may be otherwise provided under this Code, relating to: (A) The design and construction of streets, including, but not limited to, curbs, gutters, and sidewalks; (13) The insulation of hot water pipes; and 14 (C) Perimeter landscaping,buffers, or screening,where not adjacent to a residential zoning district,including, but not limited to: (i) The selection, quantity, sizing, and installation of plants or vegetation; (ii) The irrigation system; and (iii) The maintenance plan. (b) The provisions of subsection(a) shall have no effect on and shall not apply to a qualifying development unless and until the developer: (1) Enters into an agreement with the County in a form prescribed by the housing administrator that, at a minimum: (A) Requires the developer to offer affordable units for sale or rent concurrently with market-rate units at a ratio of at least one affordable unit for each market-rate unit; (B) Requires the affordable housing units remain subject to affordability restrictions for no less than fifteen years or longer as may be otherwise required by law; and (C) Allows the County to revoke any waiver, exemption,modification, or other provision granted under this section, impose other penalties, and pursue other legal remedies in the event the developer fails to comply with the agreement or the provisions of this section; and (2) Records the agreement with the State bureau of conveyances against all parcels of the qualifying development. (c) As used in this section: "Qualifying development"means a residential development where more than half of the dwelling units are affordable housing. (d) Notwithstanding anything to the contrary: (1) The developer of a qualifying development need not pay any fee relating to the submission or review of a building or a land use permit that would otherwise be required by the director of public works or the planning director; (2) The director of public works or the planning director, as the case may be, shall act on any completed application for a building or land use permit application for a qualifying development within sixty days of receipt of any such application; and (3) In the event the director of public works or planning director fails to act on any building or land use permit application for a qualifying development,the application shall be deemed approved and the permit shall be issued. (e) Any qualifying development that fulfills its housing requirement by constructing finished lots for sale or affordable housing units for sale or rent shall be entitled to a density bonus increasing the total number of dwelling units that may be constructed on the site by ten percent, and decreasing the minimum lot size by ten percent, compared to the number of units otherwise allowable and the minimum lot size as established by the zoning code,provided that: (1) The density increase does not contravene the Code, or health and safety, and meets the limitations of the available utility services; 15 (2) The density bonus shall round to the nearest whole number of units, except that,when the development will yield fewer than ten affordable housing units, the density bonus shall yield one additional unit; (3) If a project fulfills its affordable housing requirement off-site,the density bonus shall be used on the affordable housing site; and (4) The density bonus may not be used in the State Land Use Agricultural District or Rural Districts to create lots less than the minimum lot sizes required in those districts." SECTION 4. The County housing program revolving fund is hereby abolished. All unexpended and unencumbered monies remaining in the County housing program revolving fund as of the effective date of this ordinance shall be deposited into the affordable housing production fund. SECTION 5. Severability. If any provision of this ordinance, or the application hereof to any person or circumstance, is held invalid,the invalidity does not affect other provisions or applications of this ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are severable. SECTION 6. This ordinance shall take effect upon its approval. INTRODUCED BY: ASHL RKIEWIC?' Council Member • HOLEKA GORO INABA,Ed.D. Council Member ,Hawaii Date of Introduction: Date of 1st Reading: Date of 2nd Reading: Effective Date: REFERENCE Comm. 1130 I N 0 IllU OE IIJO 16 LRB 26-082 D4+8