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HomeMy WebLinkAboutCOM 0072.003 2004-2006 OJa<V OF M,wi 4~ Harry Kim ~ Christopher J. Yuen Mayor r, ,:~Qirccyn , STF OF~NI' Roy R. Takemoto DeDary Dbeclor ~~auxtf~r of ~tI£uttii PLANNING DEPARTMENT I01 Pauahi Street, Suite 3 Hilo, Hawaii 96720-3043 January 2Q 2005 (808)961-8288 Fax(808)961-8742 Honorable Gary Safarik, Chair and Members of the County Council HAWAII COUNTY COUNCIL 25 Aupuni Street Hilo, HI 96720 Dear Chair Safarik and Members of the County Council: SUBJECT: HOUSING POLICY The major issue with Chap. 11 that the Council discussed at the previous meeting was whether the basic affordable requirement should be 20% or 30%. We should put this in perspective: it is great that we are discussing how much to change the present system from the current 10% with a low in-lieu fee. That is clearly inadequate. There is no percentage that is exactly correct. The administration continues to recommend 20% because we believe it is a good balance between what we are trying to achieve in affordable housing for the community-which would favor a higher number-and what is reasonable to expect the private developer to absorb. It is better to adopt a standard that we feel confident in and will hold on to through swings in the real estate mazket. Unfortunately, what we have seen in the past is that affordable housing percentages were set at a very high level at a high point in the real estate mazket. The percentage proved infeasible when there was a market downturn. This was followed in Hawaii County by the 1998 changes that set the level too low to result in any affordable housing when the market turned back up. We don't want to repeat this cycle. A higher requirement will likely lead to developers seeking exemptions by pleading financial hazdship or inability to comply. This may also occur at the 20% figure, but it is more than reasonable for the County to require that a residential rezoning provide at least 20% of its units at a price range that middle-income residents can afford. Around the country, inclusionazy zoning requirements in the 10-20% range are common. Hawaii County is nn equal opportunity provider and employer. Comm. No. ~ 2. 3 Ref. To: Preieatsd o'u~+Gi Ref. Uaie ~~QN Honorable Gary Safank, Chair and Members of the County Council HAWAII COUNTY COUNCIL Page 2 January 20, 2005 We should also consider that for lot-only development, the requirement is actually 40% because the developer only earns 0.5 credits for an "affordable" lot. The affordable lot price will be $95,000 under current conditions. We set the credit lower because you don't actually get an affordable unit with just the lot; someone still has to build the house. If the basic requirement is 30%, then 60% of the lots will have to be affordable. Also, the developer earns only 0.5 credit for a house that is affordable to the family earning 140% of median. This is a family income of $70,700 for a family of four, and the affordable price under the current formula would be about $285,000. The administration proposal ends up requiring 40% of the units be affordable if the developer chooses this price range. We are trying to improve the current situation where absolutely none of the units being built and sold in West Hawaii are affordable to middle income families. The Council can be proud of itself if enacts these changes requiring 20%. Sincerely, ~7 ~~-1-~-~- CHRISTOPHER J. N Planning Director CJY:pak Wpwin60/Chris/Safank -Housing policy