HomeMy WebLinkAboutCOM 0438.000 2006-2008 Mtv os y,~
Harry Kim ' ~ William Takaba
Mayor Finance Director
Nancy Crawford
• Deputy Finance Director
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County of Hawaii
25 Aupuni SVee[, Room 215 Hilo, Hawaii 96720
(808)961-8234 Cox (808)961-R248
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May 9, 2007
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Pete Hoffmann, Chairman and
Members of the Hawaii County Council
Hawaii County Council
25 Aupuni Street
Hilo, HI 96720 ~ cn
Dear Chairman Hoffmann and Council Members:
1?nclosed is a bill for an ordinance amending Chapter 19, Article 1 (Administration), Section 19-
2, and Article 7 (Tax Maps; Valuations), Section 19-53, of the Hawaii County Code 1983, as
amended, relating to affordable rental housing.
Purpose. The purpose of this bill is to increase the availability of affordable rentals on the Big
Island by offering tax incentives to owners of properties rented at "affordable" rates. The
following are highlights of this proposal:
1. Affordable Rental Rate. The "affordable rental rate" is defined as a monthly rent not to
exceed 75% of the Payment Standards as established by the Office of Housing and
Community Development (see enclosed Payment Standards chart). This currently equates
to approximately 82.5% of HUD's Fair Market Rent for the Island of Hawaii. For example,
the Fair Market Rent fora 3-bedroom home is $1,232 per month, the Payment Standards is
$1,355 per month. Based on this, the affordable rental rate fora 3-bedroom home would be
$1,016 per month ($1,355 x 75%).
2. Property Classification. Anew class of property called "affordable rental housing" will
be established. To qualify to be in this class, all rental units on the property must be rented
at the affordable rental rates. The application deadline for the affordable rental class shall
be December 31 for the tax year beginning July 1 of the following year. Applications must
be filed annually.
3. Benefits. We recommend that properties in the affordable rental housing class receive a tax
rate similar to the homeowners class. For properties in the affordable rental housing class as
of January 1, 2008, the assessed value of the property shall not increase more than 3% per
tax year until the parcel is sold or conveyed. Affordable rental housing shall not disqualify
an otherwise qualified property from entering or remaining in the homeowners class. , _
Gomm. No.-- ~
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Honorable Pete Hoffmann
Page Two
May 9, 2007
Conclusion
This is our second effort to increase the availability of affordable rental units on the Big Island.
Last year we proposed, and the Council adopted, Bill 341 (Ordinance 06-147), allowing
homeowners to rent a portion of their home as residential rental and retain the home exemption.
We believe that the proposal being submitted today takes a giant step in getting property owners
to lower their rents to more affordable levels on the Big Island. We ask that favorable action be
taken on this bill. Should you have any questions or concerns, please contact me at your
convenience.
Sincerely yours,
of 7
William Takaba
Finance Director
APPROVED:
Harry Kim
Mayor
cc: Wesley Takai, RPT Administrator
Enclosures
RPT070127PayStan.zls PAYMENT STANDARDS
sfefzoo7 10:15 AM (as of 5/9/07)
0 Bedroom 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 5 Bedroom
*FAIR MARKET RENTS
$649 $779 $874 $1,232 $1,350 $1,552
**PAYMENT STANDARDS
Of FMR 110.00% 110.00% 110.00% 110.00% 110.00% 110.00%
713 858 961 1355 1485 1707
90% $642 $770 $865 $1,220 $1,337 $1,536
80% $570 $685 $769 $1,084 $1,188 $1,366
75% $535 $642 $721 $1,016 $1,114 $1,280
70% $499 $599 $673 $949 $1,040 $1,195
65% $463 $556 $625 $881 $965 $1,110
60% $428 $514 $577 $813 $891 $1,024
Rental exceptions for ZIP codes 96719, 96725, 96738, 96739, 96740, 96743, 96745, and 96755.
Of FMR 116.00% 116.00% 116.00% 116.00% 116.00% 116.00%
752 903 1014 1429 1587 1801
90% $677 $813 $913 $1,286 $1,410 $1,621
80% $602 $722 $811 $1,143 $1,254 $1,441
75% $564 $677 $761 $1,072 $1,175 $1,351
70% $526 $632 $710 $1,000 $1,097 $1,261
65% $489 $587 $659 $929 $1,019 $1,171
60% $451 $542 $608 $857 $940 $1,081
*Determined annually by the federal Office of Housing and Urban Development (HUD)
**Determined annually by the county Office of Housing and Community Development (OHCD),
based on Fair Market Rents. Maximum rental allowed for Section 8 Program.