HomeMy WebLinkAboutCOM 0438.003 2006-2008
CASEY JARMAN ,.f+~ use KENNETH G. GOODENOW
COUnIy Clerk q:•~,;~' •'•'r+~ Deputy County Clerk
I~
COLLEEN SCHRANDT
Legislative Auditor
.e.~.
Malting Address: • oi•M?ai~ Business Address:
(Former County Building) 333 Kilauea Avenu~;:$econd Floc
15 Aupuni Stree[ Ben Franklin Buildfq¢,
Hilo, Hawaii 96710 Hilo, HawQl"i 9677~F1_
County ofHawai `i -
Office of the County Clerk _
Telephone: (808) 96/-8155 Facsimile: (808) 961-8912
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DATE: June 8, 2007
TO: Pete Hoffmann, Chairperson, and
Members of the Hawaii County Council
FROM: Casey Jarman, County Clerk t
SUBJECT: Submitting Proposed Amendment to Bill 106, Draft 2, Relating to Affordable
Rental Housing Classification
Submitted for your consideration are the following proposed amendments to Bill 106, Drafr 2:
1. In SECTION 2 of the bill, in the definition of "certification of rental rate" and in
SECTION 4 ofthe bill, that adds new subsections 19-53(h)(1), 19-53(i)(2), and
19-53(j)(1) to the Hawaii County Code, change the word "fiscal" to "calendar." This
proposed floor amendment, which was briefly discussed during the Finance
Committee meeting on May 31, 2007, was not formally adopted, and consequently is
now submitted on behalf of the Finance Department.
2. In SECTION 2 of the bill, in the definition of "certification of rental rate," delete the
word "that" following the words "penalty of law." The word being deleted is
extraneous.
3. In SECTION 4 of the bill, in proposed new subsection 19-53(j)(2), correct a
typographical error by changing the word "statues" to "statutes."
These proposed amendments would amend the definition of "Certification of rental rate" in
SECTION 2 of the bill as follows: (Changes to the bill have been bolded and ramseyered for
illustrative purposes only.)
"Certification of rental rate" means the sworn statement of the parcel owner attesting
under penalty of law ftlml} the rental rate that the land owner will charge and maintain
for all renters on that parcel for that 1Cisenll calendar year. 2
Comm. No. g• z
Ref. To•
Ref. Date
1
These proposed amendments would amend SECTION 4 of the bill as follows: (Changes to the
bill have been bolded and ramseyered for illustrative purposes only.)
"SECTION 4. Chapter 19, article 7, section 19-53, Hawaii County Code 1983
(2005 edition), is amended by adding subsections (h), (i), and (j), relating to
Affordable Rental Housing classification, to read as follows:
`(h) Eligibility for affordable rental housing class.
(1) Real property occupied as affordable rental housing must
be rented at a rate not to exceed the affordable rental rate
for the entire [€iseal} calendar year claimed and must be
legally permitCed by all codes.
(2) All rental units on affordable rental housing properties must
be rented at the affordable rental rates.
(3) Affordable rental housing properties shall not be excluded
by the owner's principal residence also being on the
property.
(4) For properties in the affordable rental housing class as of
January 1, 2008, the assessed value of the property shall not
increase more than three percent per tax year until the
parcel is sold or any portion thereof sold by way of
conveyance which is subject to conveyance tax under terms
of chapter 247, Hawaii Revised Statutes, at which time the
property will be assessed at market value. In addition to
the three percent limit of this subsection, any improvements
undertaken on the property within the tax year shall be
assessed at market value. All parcels entering this class
after January 1, 2008, shall have the assessed value as of
January 1 of the following year and be subject to the above
provisions.
(i) Application for the affordable rental housing class.
(1) No affordable rental housing classification shall be granted
unless the claimant shall annually have filed with the
department of finance, on or before December 31 preceding
the tax year for which such classification is claimed, a
claim for such classification in such form as shall be
prescribed by the department and shall include but not be
limited to rental agreements signed by the renter or excise
tax returns.
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(2) The landowner shall submit a certification of rental rates
affirming that the rental rates charged to all renters on that
parcel shall be at the affordable rental rate and that rate will
be maintained for the [€~seal] calendar year.
(j) Breach of affordable rental housing class.
(1) Rental of any unit during the [~iseal] calendar year at a
rate higher than the affordable rental rate shall breach the
classification.
(2) Any conveyance of the parcel or portion of the parcel
subject to conveyance tax under terms of chapter 247,
Hawaii Revised [St~ues] Statutes, shall breach the
classification.
(3) Upon breach of the classification, the tax assessment shall
be cancelled retroactive to the date of the classification, but
for not more than a period of two years plus the current
year, and all difference in the amount of taxes that were
paid and those that would have been due from the
assessment in the higher classification shall be payable with
a ten percent penalty."'
Anew draft of the bill that incorporates the proposed amendments is attached.
Thank you.
Encl.
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COUNTY OF HAWAII STATE OF HAWAII
~~O~~M~
BILL NO.
ORDINANCE NO.
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 (2005 EDITION), AS AMENDED, RELATING TO
AFFORDABLE RENTAL HOUSING CLASSIFICATION.
BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII:
SECTION 1. The Housing Element of the Hawaii County General Plan (enacted as
Ordinance No. OS-25) clearly states that a policy of the County of Hawaii shall be to "increase
rental opportunities and choices in terms of quality, cost, amenity, style and size of housing,
especially for low and moderate income households." Hawaii County has made it a priority to
expand the inventory of affordable housing, including affordable rental units in the County. An
expansion of the class of properties to include affordable rental housing in accordance with the
County of Hawaii Affordable Housing guidelines will provide a financial incentive to rental
owners to rent at affordable rates. This will help to increase the inventory of affordable rental
units available in the County.
SECTION 2. Chapter 19, article 1, section 19-2, Hawaii County Code 1983 (2005
edition), relating to the homeowner class, is amended to read as follows:
"Section 19-2. Definitions.
(a) Wherever used in this chapter:
"Affordable rental rate" is a monthly rent not to exceed 75% of the Payment
Standards as established by the Office of Housing and Community Development
as of the first of January each year.
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"Affordable rental housing" means a residential unit where the rental cost
does not exceed the affordable rental rate.
"Agriculture use value" means the productivity value for assessment
purposes determined for lands being put to any agricultural use.
"Certification of rental rate" means the sworn statement of the parcel owner
attesting under penalty of law the rental rate that the land owner will chaz~e and
maintain for all renters on that pazcel for that calendar} ear.
[(~j] "Commercial agricultural activities" shall mean the use of property to
generate income, monetary gain or economic benefit in the form of money or
money's worth of a minimum $2,000 annual gross income per farm operation,
which may include multiple parcels that need not be contiguous, and/or the use of
property that adheres to generally accepted standards or recognized practices
within that agricultural industry.
[(3j] "Commercial agricultural use dedication" means the use of land on a
continuous and regular basis that demonstrates the owner is engaged in
commercial agricultural activities from:
{(A}} ~ Intensive agriculture;
{{H}} ~ Orchards;
~ Feed crops and fast rotation forestry; or
{(B}} ~ Pasture and slow rotation forestry.
[(4j] "Continuous and regular basis" shall be evidenced by the recurring
planting, cultivation and hazvesting of crops or ongoing animal husbandry or
aquaculture activities that adhere to generally accepted standards or recognized
practices within that agricultural industry.
[(Sj] "County" means the County of Hawaii.
"Date of classification" means July 1 of the tax year for which such
classification is claimed.
"Dedicated lands" are lands which are restricted in their use for
specified periods of time by covenants executed between the landowners and the
director of finance as provided by this chapter.
[(~j] "Director" means the director of finance of the County of Hawaii or
the director's authorized representative.
[(&j] "Farm dwelling" means asingle-family dwelling located on and used in
direct connection with a farm, or where the agricultural activity provides income
to the occupant(s) of the dwelling. A farm dwelling includes employee housing
for that farm.
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"Feed crops and fast rotation forestry" includes, but is not limited to,
such crops as forage, seed, cane, rice, and biomass grasses.
[(-I9j] "Intensive agriculture" includes, but is not limited to, such crops as
vegetables, ginger, taro, herbs, nurseries, foliage, cut and potted flowers,
piggeries, dairy, poultry, feedlots, aquaculture, honey and honey bees.
[(-I~-j] "Mazket value" is the most probable sale price of a property in terms
of money in a competitive and open market assuming that the buyer and seller aze
acting prudently and knowledgeably, allowing sufficient time for the sale, and
assuming that the transaction is not affected by undue stress.
[(-1-~)] "Nondedicated agricultural use assessment" means the present use of
agricultural or residential and agricultural zoned land on a continuous and regular
basis that demonstrates the owner is engaged in agricultural activities from:
~ Intensive agriculture;
~ Orchards;
{{E}} ~ Feed crops and fast rotation forestry; and/or
{FBA} ~ Pasture and slow rotation forestry.
"Orchazds" includes, but is not limited to, such crops as macadamia
nuts, guava, banana, papaya, avocado, grapes, passion fruit, coffee, citrus, cacao,
pineapple, noni and tropical specialty fruits.
[F~] "Pasture and slow rotation forestry" includes, but is not limited to,
pasture and longer rotation forestry.
"Property" or "real property" means and includes all land and
appurtenances thereof and the buildings, structures, fences, and improvements
erected on or affixed to the same, and any fixture which is erected on or affixed to
such land, buildings, structures, fences, and improvements, including all
machinery and other mechanical or other allied equipment and the foundations
thereof, whose use thereof is necessary to the utility of such land, buildings,
structures, fences, and improvements, or whose removal therefrom cannot be
accomplished without substantial damage to such land, buildings, structures,
fences, and improvements, excluding, however, any growing crops."
SECTION 3. Chapter 19, article 7, section 19-53(e), Hawaii County Code 1983 (2005
edition), relating to classification of land is amended to read as follows:
"(e) Classification of land:
(1) Except as otherwise provided in subsection (e)(2) of this section, land
shall be classified, upon consideration of its highest and best use, into the
following general classes:
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(A) [T-~~~°°°a - Residential;
(B) [r r~~~•~~°-~°`' Affordable rental housing;
(C) Apartment;
(D) Hotel and resort;
(E) Commercial;
(F) Industrial;
(G) Agricultural or native forests;
(H) Conservation; and
(I) Homeowner.
(2) In assigning land to one of the general classes the director of finance shall
give major consideration to the districting established by the land use
commission pursuant to chapter 205, Hawaii Revised Statutes, the
districting established by the County in its general plan and zoning
ordinance, use classifications established in the general plan of the State,
and such other factors which influence highest and best use, except that
parcels which are used exclusively as the owner's principal residence shall
be classified as "homeowner" without regazd to the highest and best use,
provided that the director has granted to the owner a home exemption in
accordance with sections 19-71 to 19-72.
(A) The homeowner class is exclusively reserved for properties which
aze used as the owner's principal residence. Uses which shall not
qualify as "homeowner" include:
(i) Real property which is valued according to its nondedicated
agricultural use pursuant to subsection 19-57.
(ii) Real property which is dedicated to an agricultural use or
native forest use.
(iii) Real property which is used for commercial or income-
producing purposes, except as exempted under section 19-
71(a) or (b).
(iv) Real property which is used for residential rental purposes,
whether for short-term or long-term lease, except as
exempted under section 19-71(a)[-] and affordable rental
housin .
(v) Real property which is used for any purpose other than the
owner's principal residence.
The affordable rental housing class is exclusively reserved for
properties which meet the eligible requirements for this class and
have the annual required application timely filed. Uses which shall
not qualify as "affordable rental housing" include:
Real property which is valued according to its nondedicated
agricultural use pursuant to section 19-57.
ii Real property which is dedicated to an agricultural use or
native forest use.
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iii Real property which is used for commercial or income-
producing pumoses except uses which is legally permitted
as a home occupation in accordance with the zoning code.
(3) Whenever there is an overlap or contradiction in districting or use
classification between the County and the State, zoned districts by the
County shall take precedence.
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SECTION 4. Chapter 19, article 7, section 19-53, Hawaii County Code 1983 (2005
edition), is amended by adding subsections (h), (i), and (j), relating to Affordable Rental Housing
classification, to read as follows:
Eligibility for affordable rental housing class.
Ll.) Real propertv occupied as affordable rental housing must be rented at a
rate not to exceed the affordable rental rate for the entire calendaz year
claimed and must be legally permitted by all codes.
All rental units on affordable rental housing_properties must be rented at
the affordable rental rates.
Affordable rental housing properties shall not be excluded by the owner's
principal residence also being on the property.
8
For properties in the affordable rental housing class as of January 1, 2008,
the assessed value of the propertv shall not increase more than three
percent per tax year until the parcel is sold or andportion thereof sold by
way of convevance which is subject to convevance tax under terms of
chapter 247 Hawaii Revised Statutes at which time the propertv will be
assessed at market value. In addition to the three percent limit of this
subsection anv improvements undertaken on the propertv within the tax
year shall be assessed at market value. All parcels enterine this class after
January 1 2008 shall have the assessed value as of January 1 of the
followine year and be subject to the above provisions.
Application for the affordable rental housin¢ class.
No affordable rental housin¢ classification shall be ¢ranted unless the
claimant shall annually have filed with the department of finance, on or
before December 31 preceding the tax year for which such classification is
claimed a claim for such classification in such form as shall be prescribed
by the department and shall include but not be limited to rental agreements
signed by the renter or excise tax returns.
The landowner shall submit a certification of rental rates affirming that the
rental rates chazged to all renters on that parcel shall be at the affordable
rental rate and that rate will be maintained for the calendar year.
Breach of affordable rental housing class.
Rental of anv unit during the calendar year at a rate higher than the
affordable rental rate shall breach the classification.
Any convevance of the parcel or portion of the parcel subiect to
convevance tax under terms of chapter 247, Hawaii Revised Statutes,
shall breach the classification.
Upon breach of the classification, the tax assessment shall be cancelled
retroactive to the date of the classification, but for not more than a period
of two years plus the current year and all difference in the amount of
taxes that were paid and those that would have been due from the
assessment in the higher classification shall be payable with a ten percent
ep nalty „
SECTION 5. 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.
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SECTION 6. If any provision of this ordinance, or the application thereof to any person
or circumstance is held invalid, such invalidity shall 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 7. This ordinance shall take effect upon its approval.
INTRODUCED BY:
COUNCIL MEMBER, COUNTY OF HAWAII
Hilo, Hawaii
Date of Introduction:
Date of 1st Reading:
Date of 2nd Reading:
Effective Date:
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