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HomeMy WebLinkAboutCOM 0358.000 2006-2008 ~~+v a 4' ~u- Harry Kim Christopher J. Yuen Mayor Director +r~•;;~~;'r Brad Kumkawa, ASLA LEED®AP ~l].1t1tt~1 Ql ~~~FIIY Deputy Director PLANNING DEPARTMENT 101 Pauahi Stree[, Sui[e 3 Hilo, Hawaii 967203043 (808) 961-8288 PAX (808) 961-8742 April 20, 2007 Honorable Pete Hoffmann=;~ Chair and Presiding Officer , and Members of the County Council _ = - COUNTY COUNCIL 333 Kilauea Avenue, Second Floor Hilo, HI 96720 Dear Chair Hoffinann and Members of the County Council: SUBJECT: PROPOSED AMENDMENT TO CHAPTER 11 -HAWAII COUNTY AFFORDABLE HOUSING POLICY We would like to propose an amendment to Chapter 11, the Hawaii County affordable housing policy that will greatly strengthen it by applying its coverage to all new residential developments, except those that have previously satisfied their affordable housing requirements. A proposed ordinance is attached to this letter. Until now, affordable housing requirements have only been applied to developments which had an affordable housing condition placed on them at the time of rezoning or state land use reclassification. These conditions did not become common until the 1980's. Much development on the island occurs on sites that were zoned earlier without affordable housing conditions. For example, most of the Waikoloa Village area was zoned RS-10 around 1970, including about 1600 acres of land that has not yet been developed. The basic idea behind Hawaii County's affordable housing policy is simple: that new housing projects should make room for at least some people of average income. This is a common policy on the Mainland, usually called "inclusionary zoning", and it is even more essential on an island. We must accommodate housing for the working population on the island. We cannot have it commute in from another jurisdiction. Because we have Comm. No. 3~ Ref. To:,~ 3~ Ref. Dafe Hawaii County is an Equal Opponuniry Provider and Employer. Honorable Pete Hoffmann Chair and Presiding Officer and Members of the County Council COUNTY COUNCIL Page 2 Apri12Q 2007 a strong market for upscale housing, private development will cater to the high-end market if we don't have a requirement to serve a broad range of the population. Market forces have pushed home prices on the island out of reach of ordinary working people. The average family of four on the island earns about $55,000/year, and at current interest rates, can afford a home costing about $227,000 according to HUD guidelines. But the median price of homes in North Kona last year was $645,000, in South Kohala, $550,000, and in South Hilo, $362,000. Although home prices have stabilized and may be dropping somewhat, they are still far out of reach for most families. The current affordable housing requirement is very reasonable. It requires that 20% of homes being sold are offered at a price that people earning 120% of the median income can afford. If homes are sold at lower prices, the percentage requirement is less. For example, at the 100% of median price level, the requirement is 13.33%. By definition, half the population earns less than 100% of the median, so we are only requiring that 13.33% of homes be sold at a price that the average family can afford. If only lots are developed, a percentage of lots must be sold at affordable prices. Hawaii County recently had an analysis done (by David Rosen & Associates), as part of the Kona Community Development Plan, that showed that the current affordable housing requirements are financially feasible for private developers. We have consulted with corporation counsel in preparing this bill and we believe Hawaii County has the legal power to apply these affordable housing requirements to properties without specific affordable housing conditions attached to their zoning. This is commonly done in Mainland communities with inclusionary zoning laws, for example, San Diego Municipal Code sec. 142.1301-1312, and Napa County Code Chap. 15.60. This proposed ordinance does not change a landowner's zoning. They can still build according to their zoning, and, in fact, Chap. I 1 gives them incentives to develop more housing. The proposed amendments would be applied at final subdivision approval. For projects that typically do not go through subdivision, such as multifamily developments, the checkpoint will be plan approval, an administrative stage where the site plan is reviewed at the Planning Department, typically just before the building permit. The affordable requirement would also apply to sites that go through a condominium process. Honorable Pete Hoffmann Chair and Presiding Officer and Members of the County Council COUNTY COUNCIL Page 3 Apri12Q 2007 The major exception to the affordable housing requirement will be those projects, which have an agreement with the County that fully satisfies their affordable housing requirements. Typically, these are projects which were zoned in the 1980's and 1990's which entered into an agreement with the County and have fulfilled that agreement. For example, the Waikoloa resort development gave 300 acres to the County for affordable housing in Waikoloa, and has some ongoing responsibility to provide infrastructure for the project. Other developments, such as the urban portion of Kohala Ranch, fulfilled affordable housing requirements by paying an in-lieu fee when it was inexpensive to do so. We are not exempting these developments out of favoritism, but because of legal concerns over trying to impose a new requirement when the County previously agreed that the affordable housing requirement was fulfilled. The proposed ordinance will also not apply to existing individual lots, such as in subdivisions already approved, and small subdivisions and other developments with fewer than five units. These are exempted by the current policy. We do not see a practical way of putting an affordable housing requirement on individual lots that have already been subdivided, such as in the Puna subdivisions like Hawaiian Paradise Park. As a practical matter, most affordable housing being produced on the island is actually being built in such subdivisions. The bill deals with projects that are currently in the development process by exempting subdivisions that have received tentative approval on the effective date of the ordinance, and projects which had a plan approval application received and acknowledged as complete on the effective date of the ordinance. Tentative subdivision approval gives the developer the right to draw up construction plans for the subdivision infrastructure and to build that infrastructure once the plans have been approved. Plan approval similarly approves the basic site plan for amulti-family project. The attached bill is in Ramseyer format from the current Chap. 11, Hawaii County Code, and does not include any changes that may result from Bill 156, which is currently under consideration by the council. If Bill 156 passes and is signed by the mayor, we will revise the current proposal to include the necessary changes. Honorable Pete Hoffmann Chair and Presiding Officer and Members of the County Council COUNTY COUNCIL Page 4 Apri120, 2007 We believe this is a very important and far-reaching bill, that will result in the production of significantly more affordable housing on the island, and hope that the council will agree and take favorable action on it. Sincerely vL CHRISTOPHER J. EN Planning Director EDWIN TAIRA Housing Administrator CJY:pak Wpwin60/Chris 07/Hoffmann -Proposed Amendment to Chapter 1 I -Hawaii County Affordable Housing Attachment cc: Mayor Harry Kim Corporation Counsel COUNTY OF HAWAII STATE OF HAWAII ORDINANCE NO. AN ORDINANCE AMENDING CHAPTER 11, ARTICLE 1 OF THE HAWAII COUNTY CODE 1983 (2005 EDITION, AS AMENDED), RELATING TO AFFORDABLE HOUSING BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. Purpose. The purpose of this bill is to extend the requirements for affordable housing to properties which are being subdivided or developed under plan approval, in cases where the property was zoned without specific affordable housing requirements. The council finds that the lack of affordable housing for persons of low and moderate income is causing severe financial hazdship to residents of the island, causes a shortage of workers for many businesses, causes long-distance commuting from azeas with more affordable housing to employment centers, thereby increasing traffic congestion, and increasing the risk of death and injury from traffic accidents, and other problems, all adversely affecting the health, safety, and welfare of the residents of the county. Although a large number of new homes have been built on the island in the last few years, there is a shortage of homes for people of low and moderate income, because of strong demand for homes from more affluent second-home buyers and retirees. Much development has occurred on sites that were zoned prior to affordable housing requirements, and hence, under [he current housing ordinance, does not have to include affordable housing. The council finds that in order to achieve the goals for affordable housing in the General Plan it is necessary to require affordable housing under Chap. 11 for new subdivisions, condominiums, and for new multi-family buildings, and multiple single-family residences built on a lot, which aze required to obtain plan approval. The council also finds that it is typical on the U.S. Mainland that inclusionary zoning laws, such as Chap. 11, apply to new subdivisions and multi-family developments even when not specifically required by the zoning ordinance which applies to the property. To avoid a double assessment of affordable housing requirements, it is necessary, however, to exempt subdivisions, condominiums, and plan approvals that are contained within projects that previously had affordable housing conditions that were fully satisfied at an eazlier time. SECTION 2. Section 11-4, Hawaii County Code, subsection (a) is hereby amended to read as follows: "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 to 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 which 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[.]; (5) All final subdivision approvals creating additional lots where residential uses are allowed including farm dwellings, where the additional lots are less than five acres in sib (6) All final map approvals for a condominium property regime where residential uses are allowed including farm dwellings, and the units are less than five acres in size; and (7) All plan approvals for buildings which allow residential uses. " SECTION 3. Section 11-9, subsection (a), Hawaii County Code, is hereby amended to read as follows: "Section 11-9 Sale of lots and units. (a) Before obtaining final subdivision approval, final map approval for a condominium property regime, or plan approval for any for-sale residential project subject to the affordable housing requirements, the applicant shall enter into an agreement with the County that the required number of number of homes or lots will be sold at the required affordable sales price, or that the required number of rental units will be offered for rent at the affordable rental price, or that the in-lieu fee will be paid upon the sale of each for-sale dwelling unit or lot, or that the applicant will obtain excess credits sufficient to satisfy its requirements." SECTION 4. Section 11-17, Hawaii County Code, is hereby amended by adding a new subsection to read as follows: "Section 11-17. Effect on existing requirements. This policy supersedes all previous affordable housing requirements and Hawaii County Housing Agency Resolution 65 dated May 2, 1990 and Ordinance 98-1. Any affordable housing condition or portion thereof in any prior rezoning ordinance which has not been fully satisfied as of the effective date of this policy 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 of Hawai' i reimburse or be obligated to reimburse any person or entity for the partial or full satisfaction of an affordable housing condition in any ordinance which became effective prior to the effective date of this policy. (b) The requirements in sec. 11-4(a)(5)-(7) shall not apply to anv subdivision or preliminary map for a condominium property regime which had received tentative approval as of the effective date of this ordinance or to anv plan approval for which the application had been received and acknowledged as complete prior to the effective date of this ordinance or to anv subdivision condominium property regime, or plan approval within an area which had affordable housing requirements that had been previously been fully satisfied. SECTION 6. Material to be repealed is bracketed and stricken. New material is underscored. In printing this ordinance, the brackets, bracketed material, and underscoring need not be included. SECTION 7. Severability. If any provision of this ordinance or the application thereof to any person or circumstance, is held invalid, such invalidity does not affect other provisions or applications of the ordinance which can be given effect without the invalid provision or application, and to this end, the provisions of this ordinance are declared to be severable. SECTION 8. This ordinance shall take effect upon its approval. INTRODUCED BY: COUNCIL MEMBER, COUNTY OF HAWAII Hawaii Date of Introduction: Date of 1st Reading: Date of 2nd Reading: Effective Date: