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HomeMy WebLinkAboutCOM 0072.024 2004-2006 ,-10-OF: 5:39PM: ~809E2B34fi3 ,8085_'83a 63 # i. j! 1 ~~3 Jrii,' 2. k~k X ~ ~ 1. iii'I ~ ©P1 . ~'7 LAND USE RESEARCH , 3 FOUNDATION OF HAWAII 70o Bishop Street, Ste. i9z8 Honolulu, Hawaii 9653 Phone 521-4717 Fax 536-ar3z ~ i January 21,2005 The Honorable Gary Safazik, Chair and Presiding OfScer, and Members Hawai' i County Council County of Hawai' i 25 Aupuni Street Hilo, Hawaii 96720 BY FACSIMILE: (8081 961-8912 Dear Chair Safarik and Council Members: i RE: BILL N0.25 AMENDING CHAPTER 11 OF THE HAWAII COUNTY CODE 1983 (1995 EDITION), TO REVISE THE AFFORDABLE HOUSING POLICY FOR THE COUNTY OF HAWAII My name is Dean Uchida, Executive Director of the Land Use Research Foundation of Hawaii (LURE), a private, non-profit research and trade association whose members include major Hawaii landowners, developers and a utility company. One of LURF's missions is to advocate for reasonable and rational land f use planning, legislation and regulations affecting common problems in Hawaii. As proposed, Bi1125 amends the existing County of Hawaii Affordable Housing Policy to require residential developers to include affordable housing in their projects or contribute to affordable housing offsite as a condition of rezoning for any residential, timeshare, resort/hotel and/or industrial uses. Bill No. 25 incorporates both linkage and inclusionary zoning in an attempt require al] developers to provide units to households earning 140% and below of median income in the County of Hawaii. The bill sets forth formulas for the number of affordable units which are to be assessed against proposed residential, industrial, or resort projects at the time of rezoning. In the alternative, payment of in-lieu fees, provision of units on property other than the rezoned parcel, provision of developable land or infrastruchue/services, and other means are also authorized. Affordable housing "credits" could be earned for development and sale or rental of units affordable to specified income groups. Developers who fulfill ~ the affordable housing requirements would be entitled to a density bonus within [he urban district. Finally, l the bill provides that the County establish resale restrictions by rule to ensure that units created under this policy remain affordable. Such niles may include, but not be limited to, buy-back, shared appreciation, i and other restrictions. The idea to impose exactions on developers to build affordable housing is not a new concept. Iu 1988, LURE published "Paviar for Crowlh in Hawaii: An Analysis ofLanact Fees and Kousine Exactions Proprmns." (See the LURE Website Research Section at www.lurfore). The report presented a comprehensive analysis of impact fees and exactions, including affordable housing linkage programs. "Linkage programs are related to, but different from, the concept of `inclusionary zoning'. Inclusionary ~ 7 2.. 2~ Cornmi No: Ref. Toh~ Ref. Dote ~nn5 t-?O-OSe 5:39PMe tBOB5293463 ;1809 ~?fl34 F3 # J J_ Honorable Gary Safarik, Chair, and Memhers Hawaii County Council ! January 21, 2005 Page 2 zoning refezs to the practice of requiring housing developers to contribute a percentage of their projects for low- ormoderate-income housing or other needs of the cotmunity. Linkage, in contrast, refers to the requirement that developers (of primarily commercial-business developments) contribute either in-kind or by payment, to the construction of off-site low or moderate iucome housing or other community needs." (Paying for Growth in Hawaii, page 111). Professor of Economics, Dc Louis Rose prepared an entire chapter in [he report entitled, "Lnnaet Fees and Hoasin2 E.rocNons Proerams: An Economic Analvsis." Dr. Rose concluded that "...only a fraction of households within the target income group will come to live in the dwellings built as a result of exactions. This is because housing exactions result in less housing being developed in both the open and closed markets. The rest of the target group will compete in the open market for housing. Based on this scenario, the likely net effect of an exaction program is to decrease low-income households' housing consumption on the average. For the same reason, homeownership opportunities for many in the target group may actually be restricted, rather than enhanced, by the housing exactions. The key problem is the negative effect that exactions have, in the absence of sufficient inducements, on costs and prices in the open market:. On the Mainland, this phenomenon was labeled by one commentator as "the irony of ittclusionary zoning." A few households are helped in a very visible fashion, by such programs, but the net effect, which is harder to see, is negative, both for the general consumer of housing and for the targeted- income group." (Paying for Growth in Hawaii, page 176). It appears that Bill No. 25 is attempting to address [he problem of how to build houses that our residents and workers can afford. History has shown that attempts to address this problem using only linkage and inclusionary zoning have met with little success. Other unintended consequences of these initiatives such as [he buy-back provisions and share appreciation have been put on hold in other counties, as these i conditions do not work when [he real estate market slows down. We strongly recotnmend that the Council review the report and consider its findings and recommendations in developing the affordable housing policy of the County of Hawaii. ht recent months LURF has participated in the State's Affordable Housing Task Force, to come up with recommendations and implementation strategies for addressing the affordable housing "crisis" in the state. The focus of that Task Force was to find feasible ways to address barriers to the development of affordable housing. (1) the lengthy land use entitlement process; (2) the lack of major off-site infrastmcmre to support development; aad (3) the lack of financing resources to develop affordable housing. In addition, LliRF sponsored the first panel discussion of the Planning Directors from each of the Counties in Hawaii to discuss several issues including affordable housing. It was a[ this session last summer that the i current Hawaii County Planning Director suggested that we look at other ways to address the needs of our resident workers on housing. One of his suggestions, which has subsequently been researched by the Affordable Housing Task Force, is to come up with different design standards for affordable or worker housing. This is a throw-back to the 1950's and 1960's in which most baby boomers grew up in subdivisions with overhead lines instead of underground, swales for drainage instead of curbs and gutters, car ports instead of garages, uniform fixtures instead of custom fixtures, and smaller houses and rooms that could accommodate expansion as the family needs grew. I fI{ +-FO-OS: 5=~9PA~:BOBSZ33353 ~8055Y P3i E3 h _i ~ 1 9I~ Honorable Gary Safarik, Chair, and Members Hawaii County Council January 31, 3005 Page 3 This is not a compromise on public health and safety but an attempt [o reduce costs and provide a product ~ that allows different segments of the community to purchase a home and start to build equity, both ' economically and socially, as a part of [he larger community. The design of these houses would also not lend them to speculation from off-shore investors. i Finally, the solution maybe in how we characterize the problem. The shortage of affordable housing is a "symptom" of a larger problem, that being the lack of housing in general for all segments of the market. One of the major factors contributing to the affordable housing crisis in Hawaii today is our land use entitlement system. Providing more supply of housing in all segments of the housing market is one way to address the affordable ltonsing crisis. As more product (homes) are made available, existing homeowners ~ may move to larger, more expensive homes and free up existing inventories; however, without adequate supply of product at all segments of the housing market, competition and demand for a limited supply will drive up prices. I Rather than focusing on exactions through linkages and inclusionary zoning, we suggest that the County of Hawaii consider developing less costly design standards for affordable or worker housing, and ways to ~ shorten the entitlement process to open up more ]ands for all segments of the housing mazket. i We appreciate the opportunity to express our views on this [natter, and look forward to further discussions i with the Council regarding the Affordable Housing Policy for the County of Hawaii. I