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Home My WebLink AboutCOM 0200.048 2006-2008 Page 1 of 1 Murashige, Laura From: David Arakawa [darakawa@lurt.orgj Sent: Monday, July 09, 2007 11:32 PM To: 'Gladys Quinto'; counciltestimony@co.hawaii.hi.us Cc: Ashida, Lincoln Subject: HAWAII -Additional Testimony on Bill 156, Draft 6 Attachments: 070710 Bill No. 156 (Xtra Add'I Testimony) Affordable Housing for Industrial Development.doc Aloha, Please find attached our additional testimony in opposition to Bill 156, Draft 6, to be heard at the 8:30 County Council hearing on July 10, 2007. Mahalo, Dave Arakawa David Z. Arakawa Executive Director Land Use Research Foundation of Hawaii 700 Bishop Street, #1928 Honolulu, HI 96813 Direct: (808) 521-4717 x11 Mobile: (808) 783-9407 Fax: (808) 536-0132 E-mail: darakawa@lurf.org www.lurf.org .J C-~ _.3 i~ Comm. I~O • Ref. To: ~ ~NIIN Ref. Date _JUL 10 2007 7/10/2007 / a„rr qr. LAND USE RESEARCH FOUNDATION OF HAWAII ' 70o Bishop Street, Ste. rgz8 ~ - Honolulu, Hawaii g68t3 Phone 52t-4yt7 Fax536-ot3z July>o, zoos The Honorable Pete Hoffmann, Chair and Presiding Member County Council, County of Hawaii 333 Kilauea Avenue (Ben Franklin Building) 2na Floor, Council Room Hilo, HI 96~2o BY E-MAIL AND FACSIMILE: (808) 961-8912 Dear Council Chair Hoffmann and members; Subject: Additional Testimony regarding Bill No. 156, Draft 6, Ordinance to Amend Chapter a (Housing), Article I, Section u- 4(d), Hawaii County Code, to Include Affordable Housing Requirements for Industrial Park Developments My name is Dave Arakawa, Executive Director of the Land Use Research Foundation of Hawaii ("LURE"). LURE is submitting the following additional testimony in opposition to the Hawaii County Council's ("Council") Bill t56 (Draft 6). In this additional testimony, LURE respectfully requests that prior to approving Bill i56 (Draft 6), the Council should implement the following, • Complete the required detailed studies. LURE repeats its recommendation that the County and Council conduct the required detailed studies prior to passing a law which would require industrial park developments to provide affordable housing or affordable housing credits; • Satisfy the "Essential Nexus" and "Rough Proportionality" Tests as required by the U.S. Supreme Court. As explained in LURF's prior testimony, and in the case summaries provided below, the Council should confirm with Hawaii County Corporation Counsel (Corporation Counsel") that Bill i56 (Draft 6) complies with all constitutional requirements; and • Include incentives to provide affordable housine. Consistent with recent federal cases and the practices in many other jurisdictions, affordable housing exaction laws should also include incentives for land owners and developers. Summaries of cases confirming that Bill i56 (Draft 6) is unconstitutional. There are several "landmark" cases regarding municipalities imposing zoning conditions or exactions which affect landowners' property rights. These landmark cases establish limits on the ability of cities, counties and other government agencies to use zoning and land use regulations to compel landowners to CounTy of Hawaii, County Council Page z Affordable Housing Requirements for Industrial Developments make unrelated public improvements. In an effort to provide the Council with an explanation and guide for crafting an affordable housing policy that meets constitutional requirements, we are providing the following summaries of U.S. Supreme Court and other case law, which involve exactions, impact fees or affordable housing requirements which were either overturned as unconstitutional, or cases here such requirements were upheld as constitutional. • Nollan v. California Coastal Commission, 483 U.S. 825 (1987). Established the "Essential Nexus" Test and overturned a permit condition imposed by the California Coastal Commission to require land owner Nollan to dedicate a public beach easement as a condition to building a larger home. In Nollan, the U.S. Supreme Court held, among other things, as follows: o Required that before imposing such requirements on the landowner, the government must satisfy an "Essential Nexus Test" -proving that the "same" interest be served by the government's permit condition/exaction; o "...unless the permit condition serves the same governmental purpose..., the building restriction is not a valid regulation of land use but `an out- and-out plan of extortion."' o Where there is no evidence of an "essential nexus" between the development (building an extension to a home) and the problem that the exaction seeks to address (beach access), the exaction cannot be upheld" • Dolan v. City of Tigard, 512 U.S. 374 (1994)• Later, the Supreme Court further applied a "Rough Proportionality" Test and overturned the City of Tigard's requirement that as a condition for approval of a variance to expand her plumbing store and parking lot, landowner Dolan was required to dedicate land (t) for a public greenway along an adjacent creek to minimize flooding and (2) for a pedestrian/bicycle pathway. In this case, the Supreme Court applied atwo-prong test, as follows: o First, the city has the burden of satisfying the Essential Nexus Test - whether there is an "essential nexus" between the permit conditions and a legitimate state interest; o Second, under the Fifth Amendment, the city is required to satisfy the Rough Proportionality Test -the city must make some sort of individualized determination that the degree (or proportion) of the dedication exaction required by the permit is "reasonably related both in nature and extent to the impact of the proposed development"; and o The Court held that: • The city failed to meet its burden of establishing an essential nexus for the public greenway -that the public greenway path requirement was necessary to offset the increased traffic which would be caused by Dolan's expansion; • The city also failed to make an individualized determination that the required dedications were related, both in nature and extent/proportion, to the proposed impact; • The city's requirement for a public greenway path was excessive, and the city cannot justify the conditions imposed on the Dolan's permit, and thus fails to satisfy the Rough Proportionality Test. CounTy of Hawaii, County Council Page 3 Affordable Housing Requirements for Industrial Developments • Commercial Builders of Northern California u. City of Sacramento, 941 F.2d 8~z (9~ Cir.1991). A federal court unheld an ordinance which imposed an affordable housing "linkage fee" in connection with the issuance of permits for nonresidential development of the type that will generate jobs. The City of Sacramento's affordable housing requirements were unheld, based on the following: o The ordinance was implemented only after the City of Sacramento commissioned a detailed study, which revealed a "substantial connection between development and the problem to be addressed." o Sacramento's detailed study included facts, statistics and evaluation, which supported: • The need for low income housing ; • The effect ofnon-residential development on housing demand; • The conclusion that nonresidential development is a "major factor in attracting new employees to the region" and that the influx of new employees "creates a need for additional housing in the City." • An evaluation of the appropriateness of exacting fees in conjunction with such developments to pay for housing; • An estimate of the percentage of new workers in the developments that would qualify as low income workers and would require housing; • A calculation of the fees for development; • A drastic reduction of the above calculations, such that the final calculations were reduced by go%; and • The City establishment of a Housing Trust Fund Ordinance. • Home BuildersAss'n of Northern California u. City of Napa, ><08 Cal. Rptr. 2d 60 (Ct. App. zooi). The city's to % affordable housing requirement was upheld as constitutional, based on the following: o Detailed studies. • Over boo pages of documentation; • A detailed study of various affordable housing solutions, much like the City of Sacramento; and • Significant findings based on the studies; o Significant incentives and benefits for developers and land owners. Developers and land owners were provided significant benefits, including expedited processing, fee deferrals, loans or grants and density bonuses; and o Reasonable and proportionate requirements. The final required affordable housing set-aside was limited to ><o % of all newly constructed units. The above summaries are based on our review of the pertinent case law, however, we respectfully recommend that the County Council should seek a legal opinion from the Hawaii County Corporation Counsel regarding the above- summarized case law and the legality of Bill ig6 (Draft 6). County of Hawaii, County Council Page 4 Affordable Housing Requirements for Industrial Developments Hawaii County should provide "Incentives" to encourage the development of affordable housing. Land owners and developers respond to incentives. Thus, to encourage industrial land owners and developers to build affordable housing, LURF respectfully recommends that the Council and the Hawau County Planning Department work with the landowners, developers and other stakeholders to determine the proper amounts or levels of incentives, as follows: • Density bonuses • Fast-track permit processing • Monetary subsidies • Fee waivers, fee reductions and fee deferrals • In-lieu payment alternatives • Off-site alternatives Conclusion In order to comply with the U.S. Constitution, LURF respectfully requests that prior to approving Bill > g6 (Draft 6), the Council should implement the following, • Complete the required detailed studies. LURF repeats its recommendation that the County and Council conduct the required detailed studies prior to passing a law which would require industrial park developments to provide affordable housing or affordable housing credits: • Satisfy the "Essential Nexus" and "Rough Proportionality" Tests as required by the U.S. Supreme Court_ As explained in LURF's prior testimony, and in the case summaries provided below, the Council should confirm with Hawaii County Corporation Counsel (Corporation Counsel") that Bill 156 (Draft 6) complies with all constitutional requirements; and • Include incentives to provide affordable housing. Consistent with recent federal cases and the practices in many other jurisdictions, affordable housing exaction laws should also include incentives for land owners and developers. We appreciate the opportunity to express our opposition on this matter. cc: Corporation Counsel, County of Hawaii