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Home My WebLink AboutCOM 0463.005 2004-2006 12.02.05 FRI 13:39 FA% 808 988 8522 WH 5HIPMA?Y QI'hl L_,_ W.H. SHIPII~.AN, LI11~1[ITED KEAAU HAWAII ISLAND izjz/2oo5 Councilmember Stacy Higa, Chair and Presiding Member _ County of Hawaii, County Council County of Hawaii Building 25 Aupuni Street Hilo, Hawaii 9b~zo Subject: Bill No. 1.56 Ordinance to Amend Chapter 11 r.:.' th.~: Cocrt;' Co;ie to Include Affordable Housing Requirements far Industria Park Developments Dear Council Chair Higa; My name is Bill Walter. I am President of W. H. Shipman, ~iinited Ilr..~zti'1 Corporation located in Kea`au, Puna District, Island of Hawai i. As proposed, Bill No. 156 finds that the Housing Element of+11e Hawaii County G'-a irrai Plan (enacted as Ordinance No. o5-a5) clearly states that a policy of the ;:oi.nn of Hawaii shall be that "large industries or developments that create a demand fo: ho,a:ng shall provide employee housing based upon a ratio to be determined by an analysis of ;~e locality's needs." The County Comlcil finds that indtstria': de.-elalnle~ts ~hhi;; are comprised of multiple individual enterprises are, in fact, large industries which gcm=rate substantial employment and demands for employee housing. Therefore, such indu. trial developments should be subject to the affordable housing requirements antic=~IaU°d in Chapter ll (Housing) of the Hawaii County Code. As such, Chapter 11 will be amended to require that industrial uses fi;:fih toe a:'frx~fa!~le housing requirements. Specifiezlly, the bill proposes that industrial enterprises generating jobs for more than one hundxed employees on a full-time equivalen: t asi,, whether new or an addition or recenstzuctlon'lo existing facilities, and inc:l~zdii;~ ~~uc ar more businesses at the same or adjacent sites, must earn one affordable housing ~ i;dit for every fourfull-tithe equivalent jobs created. Cottcertts. Nearly all residents of Hawai i are concerned about the %ncreasiug cost of hcuszng is [hc State. Employers' concerns include their ability fo attract new employees ,m'- to compensate ettrrent employees sufficiently to cover an ever increasing cost of living, lti'c lmow that we will not be able to attract high quality employees and we will not be abta to keep current employees if these employees cannot pay rile '~ncre,~s*ng cost of ha~sing. These employer concerns go beyond the private sector, d,e p,jolic s:=cti.: has eean :1 9~nv P.O. Box 950 "A Katnaaina Combany Contributing W the Planned Grourth of Hdwaii" Pdone. '808, 966-J f2' K,easu. Hawaii 96749 &stablished 1923 ?..x: tS~.Yl) a'~685! Comm. No. Ref. To:Pr«~~' Ref. Date 1?;02:05 FRI 19: d9 F9S 808 906 8S?2 {VP. 5HIPMAN _ _ ~i,~,12 -2- Jecemba 2,2G0~ W.H. SIIIPMAN, LTD. of public servants (i. e. police and fire perswmel) to mainland locales ti*~here they can find higher quality housing at lower prices while earning higher salaries. Rousing affordability is affected by many factors including: • Available Income • Interest hates • Supply of Housing • Demand for Housing Individual communities such as ours are not well able to conU~ol hen of these Eactor.~: Interest Rates that are set by national market forces and Demand in a market that u fluid locally, nationally and internationally. That leaves us to focus our attention primarily on Supply and Income over which we have somewhat more but stiL' limited control. I am concerned L•hat by Crying to increase housing supply by requiring businesses to either build an affordable house for every fourth employee or to pay an afordabh housing credit of about $So,ooo the result will be to discourage businesses from expanding, building or renovating. This will likely depress income available frai housing -not increase the supply of housing. An example may illustrate the Pont: Example: A business finds its quarters to be cramped and izlef3cient. c rimer-. determine that the business must either shrink (to a more faciiitq efricien~. si>e) or expand. Expansion requires moving to an industrial park and buildtn>; ne•, ' facility. The expansion wtiIl allow it to employ flee same number o[ ~:mrlc;e~_s bw: produce more products. The cost to expand includes: • Land cost • Moving Cost • Construction Cost • Permitting Costs The company currently employs 32 employees. If the :permitting costs iuclud; paying an affordable housing credit of $400,000 (32/4 " $50,000) the cost of expansion may very well be too high. If so, the decision maker will decide to shric ~ the business resulting in job ions rather then bold a nee+~ facility. In this ese th goal of adding to the housing stock by charging an affordable housing credit : esults in no housing credits paid and some jobs lost. Whoever lost a job is n..w Ics able to purchase or even rent a home. Income available fur housing has shn;nk housing supply has not increased. 12: 0205 FRI 14.50 F,1X 808 986 8522 NH SAIP~IAV _ Q pag del -3- Dece~:.b,;:.-:: X00; W.H. SHIPMAN, LTD. This example may seem far fetched - but is not. Moreover, if we look a industrial parks and the businesses that inhabit thzm I think we will 5nd the follov,ing: • Such businesses generally have a higher wage scale then service industries and often higher then community average wages. • Such businesses provide a training ground where workers enter as unsl:ilied laborers and progress to workers with considerable sidlls and tie wages -hat go with those higher skill levels. • Often we find start up businesses either opesating out of ine-.ratrial condominiums or purchasing small lots to begin a business iI~ industrial p..rks- Such businesses when they survive become an important and stabilizin f;~rce in our economy. • Many of these businesses pro~~de products that compete ~.veli against In~po;tee products -thus increasing the State's ability to be self;;ufficient The sad truth is that if we handicap such businesses by n:quir.~.ng substantial fee; to move into business parks we are very probably causing signiflcar.t injury t9 the income factor without which no house is affordable. Moreover, we ma;- ven~ weL inhibit the community's ability to work its way through periodic recessiwas. FYnally we contribute to another problem -lack of quality jobs available for entrants into our economy from our High Schools, Community Colleges end Universities. When. we provide fewer qu<ility jobs for job entrants -these job entrants must either leave the State or settle for less satisfying and lower paying jobs. We would all agree that this is not a desirable solu~ion -even if it clid decrease the demand for housing. FSnally, if what we have is at its heart a community problem, ;hen what we need t~ fmd are community solutions to the problem. To find these solutions, there is more wz need to know: • Do we primarily have a housing supply problem? if so, what are the causes of *he lack of supply? o Generally the market will resolve a supplyproblom flat kith higher prices but later with much greater supply. If this s not 1',appeain~ over .*.:.me - why is it not happening? o How many households are there in Hawaii and what is the stod:, of housing of various types? o What is the growth in demand year to .ear and are there productive resources and land sufficient to meet Dais demand? Can we get ahead of the curve by some means? o Are we suffering from a temporary price bubble? • Do we primarily have an income problem? If there is insufficient income to secure housing -what is being done to encourage higher paying jobs? r2%02/05 FRI 13:50 FAX 808 986 8522 IVII SHIPAL4N w.x. sxipt~tnty, I,~. Finding answers to these questions -and more -and then moving to *esolve the housir_g problem in both near and long term is a goal worth pursuing. Snlcerely, L~L~jl~iGi/~ Bill Walter President