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HomeMy WebLinkAboutREP PC 070 05/01/2006 2004-2006 REPORT OF THE COMMITTEE ON PLANNING DATE: May 1, 2006 Re: Comm. No. 723/Bill No. 237 PLACE: Council Chambers TIME: 10:00 a.m. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 Your Committee on Planning, to which was referred Bill No. 237, reports as follows: Bill No. 237, transmitted via Communication No. 723 from Mayor Harry Kim, dated February 17, 2006, presents a Change of Zone request by Christopher Raymond, at Waikoekoe, Hamakua, Hawaii, TMK: 4-7-7:48. Bill No. 237 seeks to amend Section 25-8-15 (Hamakua District Zone Map), Article 8, Chapter 25 (Zoning Code) of the Hawaii County Code, by changing the District Classification of approximately 34.559 acres of land from Agricultural - 20 acres (A-20a) to Family Agricultural 3-acre (FA-3a). Communication No. 723 reports the Hawaii County Planning Commission, as required by the Hawaii County Charter, Chapter 4, Section 6-4.3(C), considered this rezoning request and accompanying Bill No. 237 on February 3, 2006. The Commission concurred with the Planning Director's favorable recommendation on this matter. Communication No. 723 transmits the following findings and recommendations: The applicant, Christopher Raymond, is the landowner. The subject property has been in Mr. Raymond's family since the Mahele in the 1860s. The applicant is requesting a Change of Zone for this 34.5-acre parcel from the Agricultural - 20 acres (A-20a) district to the Family Agricultural 3-acre (FA-3a) district in order to subdivide the property into eleven smaller lots, averaging three acres in size. According to the applicant, eight of the lots will be retained for Raymond family members, and three lots will be sold to cover costs to rezone and subdivide the property. The property is located on the south side of the Old Mamalahoa Highway, approximately 2,750 feet east of the Old Mamalahoa Highway-Hawaii Belt Road intersection. The parcel is located just east of the Kamuela Lakeland Subdivision, in Hamakua. Access to the north side of the property is from the Old Mamalahoa Highway, a County road with a 20-foot pavement width within a 60-foot right of way. Access to the lots on the southwest side of the property is proposed from Vierra Road, a County roadway which is partially paved along its frontage with the subject property. Condition G of Bill No. 237 requires the applicant to provide a 5-foot wide future road widening setback along the property's Vierra Road frontage. PC REPORT NO. 70 Communication 723 Bill 237 Page 2 Condition H of Bill No. 237 requires the applicant to widen the pavement width of Vierra Road to a minimum of 20 feet along the property's Vierra Road frontage. According to Communication No. 723, the approval of this Change of Zone request from the Agricultural - 20 acres (A-20a) to the Family Agricultural 3-acres (FA-3a) zoned district would result in an appropriate land use pattern that will further benefit the public based on the following: The proposed change of zone is located in an area designated in the General Plan as Extensive Agriculture Lands, a classification which is generally applied to lands which are not Important Agricultural Lands and not capable of producing "sustained, high agricultural yields without the intensive application of modern farming methods and technologies due to certain physical constraints such as soil composition, slope, machine tillability, and climate." Currently, approximately 3 acres of the subject property are cultivated with fruit trees, avocado trees, coffee, grape vines, and organic vegetables. The applicant states that he wishes to divide the property among his family members so that they may each build one home on their threaacre parcel, and cultivate fruit and vegetables on their land. The applicant contends that this rezoning will maintain the rural character of the land by allowing the members of his family and other individuals wishing to engage in small-scale farming to build farm dwellings on their land. The applicant will be required to comply with Chapter 11, Article 1, of the Hawaii County Code relating to the County's Affordable Housing Policy. The applicant will be required to meet affordable housing requirements by: a) building the required number of affordable houses on the site; or b) selling four lots to qualified purchasers at prices affordable to families earning no more than 100% of the median income; or c) paying the appropriate in-lieu fee; or d) developing affordable housing within a 15-mile radius of the site. The applicant will not be permitted to meet the affordable housing requirements through the transfer or sale of property to a family member. All essential services and utilities are available to the project site. The Federal Emergency Management Agency Flood Insurance Map (FIRM) identifies the site as "X" or outside the flood plain. Requisite of the Planning Director's Favorable recommendation for the Change of Zone request are twenty conditions contained in Bill No. 237 that outline specific requirements for the proposed project. Condition D requires the applicant to obtain Final Subdivision Approval within five (5) years from the effective date of the ordinance, and Condition E prohibits the construction of a second dwelling unit as well as condominium property regimes on each lot. At the May 1, 2006 meeting of the Planning Committee, the applicant provided background information regarding his application for change of zone. Mr. Raymond explained he represented his family and it was their joint desire to keep this property that his family owned for over a 100 years for their children. Mr. Raymond stated he has lived on big island since 1983 PC REPORT NO. 70 Communication 723 Bill 237 Page 3 and that in a perfect world we may be able to leave Hawaii in a much more beautiful state than it is now, however, growth was inevitable and the direction he's taking with this application request falls within guidelines of the Hawaii County General Plan. Mr. Raymond concluded that the desire of most residents in the azea and direction most residents would like it to go is to maintain a rural atmosphere and natural beauty but still allow for quality development. In answer to Council Member Jacobson's question as to how long his family would hold on to these 81ots, Mr. Raymond stated that all of his brothers and sisters do plan on moving back to Hawaii eventually and intend to build vacation homes for their family and children. Mr. Jacobson stated he is hesitant to support this (death by a thousand cuts argument), and felt approval of this application is going to lead to a number of rezonings in the area and thus could not support the measure at this time. Director Yuen advised an issue presented to this council with this application is how to handle affordable housing requirements in a situation where the applicant makes anon-market transfer of property and how to apply "in-lieu". Director Yuen knew this would be a potential wrinkle when the Chapter 11 Affordable Housing Bill was created that provides for in lieu fees based on "affordable" and "market" price, and 25% of the difference is paid "in lieu." Mr. Yuen said that works fine for a market sale, but the question is how would it be treated if transfer is to a family member and not at fair market value. Mr. Yuen stated that in Mr. Raymond's situation not assessing at fair market value is favored because it's a bonafide transfer to family members. However, keep in mind that developers have family members too and the possibility exists that a developer developing a subdivision on profit basis can then transfer a number of the subdivided lots to family members, avoid affordable housing requirements and then have family members sell the lots. This is a policy question raised by this particular application and is something that the depaztment has not faced before. Council Member Holschuh stated the concept of subdividing a piece of property with intent to transfer to children requiring a condition, restriction or rule that the property has to stay in that ownership for 20 years. Director Yuen explained a family subdivision law would make it easier to subdivide among family members and defer improvements. However, other laws state that you cannot limit the sale after the property has been divided but that a law could contain a restriction that it be divided among family members and held by the family for a particulaz number of yeazs. However, Mr. Yuen stated what's being discussed here would not have enabled Mr. Raymond to subdivide because he wouldn't have the zoning. Council Vice Chair Virginia Isbell stated since the scenario discussed by Director Yuen is not in effect, could this matter be deferred until a family subdivision law or an ordinance is created. Ms. Isbell stated if the council doesn't do it right at the outset, it will wish it had down the line because there would be others like Mr. Raymond wanting to do the same thing. Mr. Raymond stated the suggestion sounds fair and he did not mind deferring the matter if that's what the council preferred to do in this situation. PC REPORT NO. 70 Communication 723 Bill 237 Page 4 Director Yuen stated that a family subdivision law would not override the zoning and that he would not support a family subdivision law that did override the zoning. What Director Yuen has in mind would not help with Mr. Raymond's application. Instead, the idea behind the Maui family subdivision law is that if you have the zoning to subdivide but can't afford to put in improvements necessary for the subdivision a person could still subdivide and allow family members to have title to their own pazcel, but defer the requirement for improvements. In Maui improvements are deferred until any building permit is issued or until any sale of the property occurs. This has been useful for estate planning situations but does not affect or apply to Mr. Raymond's situation. If Mr. Raymond changed the zoning and this county had a family subdivision type ordinance, Mr. Raymond could use the ordinance to allow him to transfer title without making full subdivision improvements. The change of zone ordinance has to come first. In this case Mr. Raymond plans to do a subdivision and part of their family business plan is to sell some of the subdivided lots to pay for subdivision costs. In order for Mr. Raymond to do that he'll have to proceed with a regular subdivision application and would not want to hold out for a family subdivision ordinance because an ordinance such as that would have its own complications. Committee Vice Chair Pete Hoffmann stated it seems clear some caveat is needed that permits families to do what Mr. Raymond is trying to accomplish so we don't' eliminate family ownership. Mr. Hoffmann said he didn't see any reason for an affordable housing requirement under this case since we do know that it's going to be retained in family ownership. Director Yuen stated the alternative Ms. Isbell spoke of regarding deferring payment of in lieu fees, mechanically you'd have to enter a covenant against the property that would defer further market sales by the owner. Otherwise, you are opening up a situation where a developer truly in it for the business can make an immediate transfer of a lot to a family member and then have that lot sold free and clear of affordable housing fees the next day. That's the dilemma. Director Yuen suggested that if the will of the council is to let the first transfer go but to hold and defer payment until a mazket transfer takes place outside of a family member, he could draft a policy like that. Committee Vice Chair Hoffinann confirmed that the idea was to pass this application as it stands without amendment and Director Yuen concurred as he believed this would be a policy that should actually be adopted by the housing agency. What is uncleaz is what happens if you satisfy the affordable housing requirement "in lieu" on a transfer that's made for much less than market value with no cost differential. This council could pass this measure and deal with the "in lieu" question at the housing agency level as long as a policy is in place by the time Mr. Raymond's subdivision comes before the county for these 8 lots. Council Member Bob Jacobson spoke of the possibility of imposing limitations on retaining the lots within the family and wondered if there was a way fees could be applied if the lots were sold within a certain amount of years. Director Yuen stated what could be adopted is a policy at the Housing Agency to handle the affordable housing requirements when it involves a family transfer situation and that there were three choices of how this could be done. The first would be not to PC REPORT NO. 70 Communication 723 Bill 237 Page 5 do anything and allow the lot to be sold free and clear of the affordable housing requirement. The second choice would be a stricter method that would treat a family member transfer as though it was transferred at market value and make them pay the difference "in-lieu", and the third choice which Director Yuen felt was the best, was to defer the affordable housing requirement until a mazket sale of the property occurred. Director Yuen raises these issues because this is the first time a situation like this has come up, and feels it could come up again in the future and the Department needs t look into the matter. Committee Chair Pilago confirmed with Mr. Raymond that Mr. Raymond was cleaz in his understanding of the discussions taking place before this Committee and that his application is a rezoning for a subdivision and therefore must comply with affordable housing requirements. Your committee concurs with the Planning Commission and the Planning Director's favorable recommendation for approval of the Change of Zone request. Your Committee on Planning is in accord with the intent and purpose of Bill No. 237 and recommends it pass first reading. and Hues NOES a&E Ex Respectfully submitted, ARAKAKI x HIGH x COMMITTEE ON PLANNING HOFFMANN g i' HOLSCHUH g [KEDA X ISBELL x K. Angel Pilago, hair JACOBSON g PILAGO g SAFARIK g PC REPORT NO. 70 ADOPTED: MAY a21 O6