HomeMy WebLinkAboutToolbox & Strategies for Mulit-Hazard Mitigation thru Land Use Reallocation - Clarion (2020)
Hawai’i County Land Reallocation Toolbox and Strategies
Clarion Associates June 30, 2020 2
Table of Contents
Purpose ................................................................................................................................................... 4
Part 1. Toolbox of Land Reallocation Tools ................................................................................................ 6
Option 1: Transfer of Development Rights ...................................................................................... 6
Option 2: Purchase of Development Rights .................................................................................... 9
Option 3: Lot Buyouts ................................................................................................................... 11
Option 4: Publicly-Owned Lot Retirement Program / Land Banking ............................................. 13
Option 5: Zoning and Development Restrictions .......................................................................... 14
Option 6: Facilitated Lot Consolidation or Exchange Program ...................................................... 19
Option 7: Building Permit Moratorium ......................................................................................... 21
Option 8: Building Permit Denials ................................................................................................. 22
Conclusion ............................................................................................................................................ 24
Part 2. Land Reallocation Tradeoffs and Strategies.................................................................................. 25
2.1 Establishing a Strong “Low Exposure/Limited Investment” Policy .................................................. 25
2.2 Calibrating the Strategies ................................................................................................................ 26
2.2.1 Underserved Subdivisions ................................................................................................. 26
2.2.2 Level of Exposure to Hazards ............................................................................................ 27
2.2.3 Vacant or Built Status ........................................................................................................ 27
2.2.4 Number of Lots.................................................................................................................. 28
2.2.5 Strategy Overview Matrix.................................................................................................. 28
2.3 Strategies for Underserved Subdivisions......................................................................................... 30
2.3.1 Lot Buyouts ....................................................................................................................... 30
2.3.2 Vacant Lots ........................................................................................................................ 30
2.3.3 Built Lots ........................................................................................................................... 34
2.3.4 Options for Property Owners ............................................................................................ 36
2.4 Strategies for Other Areas ......................................................................................................... 37
2.4.1 Lot Buyouts ....................................................................................................................... 37
2.4.2 Vacant Lots ........................................................................................................................ 37
2.4.3 Built Lots ........................................................................................................................... 38
2.4.3 Options for Property Owners ............................................................................................ 38
2.5 Beneficial Use Determinations and Adjustments ...................................................................... 39
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2.6 Possible Reductions in Development Potential ......................................................................... 40
2.7 Implementation Requirements ................................................................................................. 42
Appendix A: Past Studies and Strategies Considered by Hawaii County .......................................... 44
Appendix B: Map of High Hazard and Moderate Hazard Areas ........................................................ 46
Appendix C: “Strategy Zone” Maps ................................................................................................... 51
Appendix D: Strategy Implementation Decision Trees ...................................................................... 56
References ................................................................................................................................................ 61
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Purpose
Following the May 2018 eruption of Kilauea, the County of
Hawaiʻi has asked Focused Planning Solutions to revisit and
update various scenarios for preventing or minimizing
development in areas of the County deemed less desirable
for residential settlements – either because of proximity to
volcanic or other hazards or areas that met certain criteria
relating to lack of services (see box). For purposes of this
report, those areas are called “underserved subdivisions”.
While growth in these areas has been significant, many
subdivisions are far from reaching zoned capacity. This
presents challenges to support the growth in a consolidated
way with either private or public services, as well as
challenges from the impacts of the extensive, distributed
development patterns. From a hazards perspective, many of
these unrealized developments are located in areas with high
exposure to one or many hazards, and a large majority of
them are located in underserved subdivisions. The County
has requested that Focused Planning Solutions prepare a
“Low Tolerance for Risk Scenario”, which would significantly reduce potential development and
redevelopment in hazardous areas – and particularly on hazardous lots within underserved subdivisions
-- for evaluation as part of the Hawai’i County General Plan effort. Reducing development in mapped
hazard areas would require the County to adopt new regulatory tools and incentives to reallocate
potential development to less hazardous areas of the County. Focused Planning Solutions has retained
Clarion Associates, LLC, as a subcontractor to perform the following two elements of this work to
support the creation of a Low Tolerance for Risk Scenario.
1. Land Reallocation Toolbox
Part 1 of this document is a Toolbox that describes the range of land reallocation tools available
for the County’s consideration, as well as examples of where each tool has been used and a
general discussion of any constraints on where the tool might be effective to reduce risks
associated with development in mapped hazard areas. Because of the increased urgency
created by recent volcanic eruptions and related losses and risks to public health, safety, and
property, the County may want to consider using a combination of the tools outlined in the
Toolbox. This Toolbox is intended to provide Hawai’i County with a range of potential policy
responses to choose from to change development patterns throughout the island – not just in
the volcanic risk areas associated with the Kilauea eruption.
Underserved Subdivisions:
• Have lot sizes that do not
conform to State or County
standards or other zoning
criteria; or
• Have at least 10 lots; and
• Have limited access to public
infrastructure and services; and
• Have high lot vacancy rates or a
pattern of “leapfrog”
development; and
• Have lots sizes too small for
agricultural development (1/2 to
3 acres); and
• Are outside County designated
preferred development areas.
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2. Land Reallocation Strategies
The second part of this document contains two land reallocation strategies based on the
Toolbox. Both strategies include a combination of tools designed to significantly reduce the
amount of development occurring in:
• Underserved Subdivisions -- A significant amount of future development capacity, almost
48,000 vacant lots, exists in locations where platted subdivisions have not developed to full
capacity over an extended period of time. Infrastructure can be inadequate, with most
developed lots using onsite disposal systems and private roads suffer from lack of
maintenance. From a State and County planning perspective, these locations are often
designated as agriculture even though lot sizes are not adequate for viable agricultural use.
Many of these lots are also exposed to hazards. These locations present health and safety
concerns due to hazard exposure as well as environmental challenges (water quality,
invasive species, habitat conservation), accessibility (road standards, maintenance and
grade), and cost to serve (distance to police, fire, hospital and ems); and
• Other Mapped Hazard Areas – Areas outside of underserved subdivisions where high and
moderate hazard exposure has been identified on properties that are built or have capacity
for future development. Specifically this identifies properties within lava hazard zones 1 and
2 with a 1,000 foot buffer, within the path of historic lava flows, or exposed to coastal
hazards – tsunami inundation, hurricane storm surge, sea level rise and/or coastal flooding.
Both strategies prioritize land reallocation away from mapped hazard areas within those two
contexts. The two strategies are accompanied by an estimate of likely reductions of
development potential in those areas if the strategies were implemented carefully and
consistently over time. These estimates are, in turn, intended to be used by Focused Planning
Solutions in developing its “Low Tolerance for Risk Scenario” for the General Plan process.
Because several types of hazards and have been well documented in Hawai’i for many years, this is not
the first time the County has explored options for reducing exposure to hazards and land reallocation
options. Past efforts related to these goals are listed in Appendix A to this document.
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Part 1. Toolbox of Land Reallocation Tools
This portion of the document describes eight different tools that Hawai’i County could use, singularly or
in combination, to alter land development and redevelopment patterns throughout the county.
As part of the recovery planning process from the 2018 Kilauea eruption, Hawai’i County has decided to
pursue a voluntary housing buy-out program. At the time of this report development the feasibility,
specific design and criteria for the program have not been finalized. The options listed below include a
Lot Buyout option because the County may want to consider that option for other areas that were in the
designated impact area of the 2018 eruption. The other options provide a range of tools available to the
County for a variety of purposes, including the fact that some residents affected by the 2018 eruption
may not want to participate in the Lot Buyout program, and because the County may want to consider
other tools for affected or mapped hazard areas where Lot Buyout funds are not available.
Option 1: Transfer of Development Rights
Transfer of Development Rights (TDR) programs have
been successfully implemented in a number of
communities, including Hilo after the 1960 tsunami. A TDR
program operates by allowing property owners to sever
some of the rights associated with their land (usually
including the right to build a home). With the
establishment of a TDR program, a property owner in a
designated “Sending Area” where development is
discouraged is allowed or induced to sell those rights to a
buyer in a designated “Receiving Area” that can accommodate additional growth. The buyer in the
Receiving Area is then permitted to build a bigger, taller, or more intense development than would
otherwise be possible. The selection of Sending and Receiving Areas can be difficult, because it is often
easier to identify where new development is not wanted than where additional development density is
desired and politically acceptable. Once the owner has sold development rights, a restrictive covenant is
recorded in the land title records preventing the sold development rights from being used on the
sending property, but the owner still retains title to the land. Importantly, the price of TDRs is almost
always set by the private market, rather than by the local government.
Normally, TDR programs are designed to move development potential from areas of historic or
agricultural value, or from areas with hazards or polluted soils, towards established communities with
fewer hazards and with available roads and infrastructure. However, a TDR program could be designed
to transfer development potential from outlying and harder-to-serve portions of an underserved
subdivision in Hawai’i County to a not-yet-developed activity center or an easier-to-serve node of
planned intensity within that subdivision. In the 1990s, Deschutes County, Oregon, designed a TDR
program to transfer development potential from approximately 14,000 obsolete lots with groundwater
pollution challenges in the Day Road area towards a new planned urban center in nearby LaPine,
Transfer of Development Rights (TDR):
A program allowing development
rights associated with land in a
designated Sending Area to be severed
from that land and sold to buyers for
use in a designated Receiving Area
where development is preferred.
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Oregon. However, that plan was later suspended due to advances in wastewater technology that
enabled more of the Day Road lots to address their environmental challenges on-site.
Four key decisions in the design of any TDR system are (1) whether the program will be voluntary or
mandatory, (2) whether to establish a TDR “bank”, (3) whether the County will participate in the
purchase and sale of TDRs, and (4) how to “calibrate” TDRs so that they have enough value that sellers
will want to sell and buyers will want to buy the TDRs.
• Voluntary or Mandatory?
A TDR program may be voluntary (i.e. the owner may choose to build on the property or sell the
rights) or mandatory (i.e. the owner may not build on the property) for landowners in Sending
Areas. Mandatory programs tend to be significantly more effective in transferring development
potential out of Sending Areas.
• Create A TDR Bank?
A TDR bank is an entity authorized to purchase TDRs and hold them for resale to buyers in the
Receiving Area. Creation of a TDR bank is not necessary, and a majority of TDR systems in the
U.S. do not include a bank, but a bank can add significant liquidity to the system. A bank answers
the question “what if someone wants to sell TDRs and no one is ready to buy them right then?”
If a bank is created, a source of TDR purchase funds needs to be identified, because the bank
will need to purchase TDRs before it recoups some or all of the purchase price by reselling the
TDRs. The bank is sometimes run by the local government and sometimes by a non-profit or
other institution under an agreement with the local government. If a bank is not created, a real
estate agent or other private entity may decide to perform the same function by using its own
funds to buy TDRs in hopes that the TDRs can later be resold at a profit. One possible
disadvantage of establishing a TDR bank is that, once the local government owns the
development rights, it may face public pressure to simply “retire” rather than sell the rights; if it
does so, then the TDR system becomes a Purchase of Development Rights (PDR) as described
below.
• Participation in the Market?
Regardless of whether a bank is created, the local government needs to decide if it will use its
own funds to purchase TDRs or if it will stay out of the market. When a local government
decides to participate in the TDR market it is usually because (1) it wants to “get the market
started” by encouraging those most willing to sell TDRs at a low price to do so quickly in order to
create some early success for the program; or (2) it is willing to spend some funds today in order
to avoid having to provide infrastructure or services to hard-to-serve or risk-prone lots in the
future. When local governments decide to participate in the market, the program is usually
designed so that the government cannot make a profit from the purchase and sale of TDRs, in
order to avoid the perception of competing with what are normally private market transactions.
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• Calibrating the System?
Finally, a TDR system needs to establish what the purchase of one TDR allows the TDR purchaser
to develop in the Receiving Area. If zoning in the Sending Area allows the seller one single family
dwelling on a lot, does the transfer of that right allow the TDR buyer to build one house, or to
add density in a multi-dwelling project, or to increase floor area in a commercial project? For
example, a local government that wants to create a strong incentive for sales of TDRs might
allow the buyer of one TDR to build two more dwelling units in the Receiving Area than are
otherwise permitted. If these types of bonuses are offered, the Receiving Area needs to be able
to accommodate more growth, and the zoning in the Receiving Area needs to be “tight” enough
that property owners in that area cannot meet market demands without purchasing TDRs.
The two most common mistakes in TDR system design are (1) failure to identify a Receiving Area
adequate to accommodate the volume of TDR use that is likely to occur (which results in an oversupply
of TDRs for sale, driving the price down to a point where many potential TDR sellers are unwilling to
sell), and (2) designating Receiving Areas where zoning rules allow potential buyers to meet market
demands for new development without buying TDRs. In spite of these design and calibration issues,
Transfer of Development Rights programs have proven effective throughout the U.S. when designed
carefully.
Hawaiʻi Revised Statute section 46-163 provides enabling state legislation for TDR programs. Although
the listed purposes do not explicitly mention hazard mitigation, the listed purposes of TDRs are very
broad. They include protecting natural and agricultural qualities of open lands and encouraging careful
management of land as a basic and valuable natural resource. To exercise powers to create a TDR
system, the County would need to adopt local enabling legislation pursuant to that authority.
Examples of TDR implementation
Hilo, HI: After the Hilo tsunami of 1960, the County of Hawai’i worked with state and federal partners to
create an Urban Renewal Program that combined development restrictions and buyouts in a program that
today would be classified as a Transfer of Development Rights. Acting as a broker, the Redevelopment
Agency purchased 388 parcels (349 acres) within the designated redevelopment area, and resold the land
to developers who would build in compliance with the new, restrictive zoning that would only allow open
space and limited commercial in the project area. Residential redevelopment was strictly prohibited, and
the program ultimately relocated 228 families and 42 individuals into designated Receiving Areas.
Montgomery County, MD: Montgomery County is a suburb of Washington, DC, where severe
development pressure resulted in the adoption in 1980 of a County TDR program to protect farmland. The
County first reduced the permitted density in the Sending Area from one unit per five acres to one unit
per 25 acres, but allowed landowners to transfer rights to build dwelling units that they could no longer
use on-site. Through 2008, the County used this tool to add 52,500 acres (16% of County land area) to an
agricultural reserve totaling 90,000 acres. Development pressures contributed to the success of the
program, with Receiving Areas periodically expanded. Where the County found no buyers for rights on the
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sending sites, it also implemented a building lot termination program to buy available sending rights from
willing sellers.
Pine Barrens, Long Island, NY: Implemented in 1995, the Pine Barren Credit Program began transferring
development rights away from privately owned land that was essential to provision of drinking water on
the eastern end of the island. The preservation area included 52,500 acres of land, and three neighboring
towns created the Pine Barren Clearing House, from which developers could buy credits to increase the
size or intensity of their developments in Receiving Areas. As of 2019, the program had enrolled 975
parcels covering 2,000 acres into the program and generated $47.5 million in private sales.
Lancaster County, PA: In 1993, Lancaster County implemented a TDR program to preserve farmland from
development in this historically important agricultural area. The County, in collaboration with Lancaster
Farmland Trust and the County agricultural board, acted as the broker in transferring rights for increased
lot coverage to an industrial area in the township. Lots in the Agricultural Zone, or Sending Area, had one
development right per two acres of land, which could be used in the Receiving Area, a 150-acre Campus
Industrial zone. In this zone, the purchase of one right allowed the developer a 4,000 square foot increase
on the permitted amount of impervious surface, up to 70% of lot area. The Lancaster County TDR program
has resulted in the preservation of 900 acres of land.
Option 2: Purchase of Development Rights
In a Purchase of Development Rights (PDR) program, the
County would purchase a landowner’s development rights in
targeted areas and would then “retire” those rights. Under a
PDR program, the County does not become the owner of the
property. The land itself remains under private ownership,
but the owner no longer has a right to build on or improve
the property, or may only do so within strict limits (usually
allowing only uses not requiring significant public services or creating significant risks to public health or
safety). These limits are then documented in restrictive covenants applied to the property. Since a PDR
program does not involve the County owning the land, it eliminates the Lot Disposal Challenge
(discussed below).
Many PDR programs are used to preserve farmland or open space, and are funded by state allocations
from taxes or ballot initiatives. For areas affected by the 2018 Kilauea eruption, Hawai’i County might be
able to avoid requiring local taxpayer funding by using federal disaster recovery funds to set up a PDR
program. If the development rights from volcanic risk lands are purchased at their current values (rather
than a pre-eruption value) the relatively low market value will increase the impact of limited funds.
However, to implement a PDR program more broadly designed to apply to parcels not affected by the
recent eruptions, or to lots at risk of other hazards elsewhere on the island, additional sources of funds
would need to be identified.
Purchase of Development Rights (PDR):
A program in which the local
government or entity purchases
development rights from a property and
“retires” those rights, leaving the land
itself in private ownership.
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The value of development rights is a central issue in any PDR program. Normally, that value is
determined by comparing the fair market value of the land with and without the development
restrictions. The more development is restricted, the less the property owner will be able to do with the
property after the sale, and the higher the price of giving up those development rights. When PDR
programs are implemented to protect agricultural lands from development, the price of purchasing
development rights is often reasonable because the property owner retains the ability to make
significant revenue from farming or ranching on the land. However, when land has little or no
agricultural value, and the PDR program is designed to prevent all significant future development of the
property, the purchase price of the development rights is likely to be close to the fair market value of
the land itself.
In addition, property owners faced with the choice of selling development rights and retaining title to
(and paying taxes on) land that has very few uses will often prefer to sell the land itself. For that reason,
a PDR program is unlikely to be effective in reducing development potential in areas of the County
where lava coverage or lack of access make lot development unlikely in the short or medium run. A PDR
program may, however, be effective in portions of Hawai’i County where lots with hazard exposure have
agricultural value and property owners may be more willing to sell development rights allowing them to
continue that productive use of the land. This type of program might also be effective for lands adjacent
to Volcanoes National Park or another assemblage of natural or open lands where the manager of those
lands is willing to invest in a “buffer” to their current landholdings.
Designing and structuring a PDR program is generally simpler than designing a TDR system, because
there is no need to identify a Receiving Area, or to calibrate what a severed TDR enables its new owner
to build in the Receiving Area, or to consider establishing a TDR bank. Financially, however, PDR
programs require a greater investment because, while a TDR system can be set up to operate without
significant outside funding, a PDR system requires a source of funding to purchase development rights.
The County could consider implementing the two tools simultaneously, with certain hazardous areas
designated for purchase only and others eligible for transfer, to maximize returns on the necessary
investment of resources. Or a PDR program could be structured as an alternative to a Lot Buyout
program (described below) by offering lot owners the option to sell development rights rather than the
lot itself.
Hawaii Revised Statutes do not appear to contain any enabling legislation for the creation of a Purchase
(as opposed to Transfer) of Development Rights system. However, the ability to purchase and sell lands
for public purposes is generally treated as one of the inherent powers of a local government, and Hawaii
has supported several de facto Purchase of Development Rights programs for conservation and
agriculture easements to achieve public purposes. Finally, Hawaii Revised Statutes 53 provides extensive
powers to purchase and dispose of lands (usually with conditions attached to achieve public purposes)
through the use of a Redevelopment Agency.
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Examples of PDR Implementation
Stafford County, VA: To forestall development pressure on farmland, the County initiated a voluntary
program where the owners of parcels of 20 or more acres could sell their development rights, after
which a conservation easement would be placed on the land. Owners of contiguous properties of less
than 20 acres could agree to have their lands treated as a single assemblage to meet the minimum
acreage. The County initially funded the program from the General Fund, and subsequently through a
dedicated tax. From 2009-2016, the County spent $2.9 million to buy 115 rights, preserving 447 acres
of land.
Peninsula Township, MI: In 1994, the Township’s planning commission initiated a PDR program to
protect threatened agricultural lands that supported the area’s cherry growing industry. The program,
which continued the right of agricultural use on PDR lands but eliminated all other development
possibility, had purchased 2,200 acres of rights by 2002, when a ballot initiative approved by voters
increased the program funding to $2 million per year. The program’s goal was to acquire 9,200 acres
by 2008.
Option 3: Lot Buyouts
As an alternative to a TDR or PDR system, the County could
decide to implement a Lot Buyout program to purchase
some or all of the lots that it does not want to see developed
or redeveloped. To do so, it could use any federal recovery
funds secured as a result of the Kilauea eruption to purchase
land rendered undevelopable or isolated due to lava
coverage. In such a program, the government first establishes areas in which it will buy lots, prioritizes
the purchases based on disaster impact or multi-hazard risk exposure, and then buys lots from owners
who are willing to sell their land because the effects of the disaster, or the risk of a future disaster, have
rendered it of little value to them. Once in possession of the land, the government prohibits future
development by rezoning the land or severing the development rights, either of which reduces future
hazard risk on the purchased lots.
A Lot Buyout program need not be restricted to those properties already affected by a disaster: it can
also be implemented more generally in high hazard areas or multi-hazard areas. However, use of some
federal funds may be tied specifically to disaster-affected properties, rather than extending also to those
that are at future risk but have not yet been affected. Expansion of the program to areas not affected by
recent volcanic events could leave the County responsible for finding another source of funding for the
purchases. In addition, although a demonstrable risk exists in these hazard-mapped areas, if no actual
damage has compromised the value of a property, purchase prices could be higher, leading to a more
costly Buyout program.
Lot Buyout Program: A program in
which the local government or
entity purchases land on which
development is not desired, and
then owns that land.
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There is no enabling legislation required to implement a buyout program, as every County has the right
to buy and sell real estate, whether in support of protecting public health and safety or for more general
purposes. However, the extent of any buyout program is dependent on the availability of funds for
property acquisition, as well as the challenge of managing lands once they are acquired.
Examples of Hazardous Lands Buyout Programs
Hilo, HI: One element of the Hilo Redevelopment included buyouts of properties that were destroyed
or damaged by the Hilo tsunami. The County of Hawai’i raised funds from a bond issue and then used
those funds to match federal funds (25% cost contribution by the County and 75% from federal
funds). These funds were used to accomplish buyouts of 388 disaster-affected parcels. The buyouts
were done in combination with a larger redevelopment program that rezoned and resold the
acquired parcels, thus avoiding the County becoming the landowner responsible for long-term
maintenance and administration of the properties acquired under the program.
Chesapeake and Norfolk, VA: These communities experienced repeated property damage due to
flooding in the tidewater area. The Commonwealth of Virginia worked with FEMA to secure mitigation
funds for the buyout of properties that had been subject to four or more flood events. Once in public
ownership, these lands are managed by an organization such as the Middle Peninsula Public
Development Corporation, established in 2003. The MPPDC has instituted various programs to turn
the land under its management to generating revenue or providing public benefit, including the
initiation of an oyster bed pilot program, and renting the lands as camps to organizations like Boy or
Girl Scout troops.
The Land Disposal Challenge
Under any program that results in the County owning new lands, the County needs to decide what to do
with a potentially large supply of lots that now generate no tax revenues and in some cases have few
practical uses. If the lots have agricultural value, they can be “unplatted” and transferred as larger parcels
of land to private users who put them back into agricultural use. Similarly, if the lands have environmental
or habitat value, the County might transfer ownership to a non-profit to protect those values. If neither of
these cases applies, the County may be unable to sell the lots and could incur significant costs to maintain
the lots to reduce fire risks, prevent invasive species, and address potential erosion and subsidence
following storm. If the County-acquired lots are not vacant, the challenges are compounded, as the County
may need to remove the structures to avoid risks to public health and safety, and because additional funds
will be needed to do that. As a practical matter, the potential financial cost of any program resulting in
County ownership needs to include the potential costs of maintaining those lots that cannot be resold.
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Option 4: Publicly-Owned Lot Retirement Program / Land Banking
Another way in which local governments can reduce future
development potential on lots in hazardous areas and/or in
underserved subdivisions is to “retire” any lots that come
into County ownership through property tax
defaults. Because many underserved subdivisions are difficult
to access and develop and/or lack basic services, some
property owners may decide not to continue paying property
taxes, accepting that the local government will someday
foreclose on the lot for unpaid taxes and obtain legal title to the lot. Unfortunately, the process of
foreclosing on tax defaults is often cumbersome and lengthy, so years may pass between the date on
which the County stops receiving tax revenues and the date on which legal title vests in the
County. Nevertheless, once the owner has decided not to make tax payments, it is unlikely that the
owner will proceed with additional development or redevelopment.
In addition, the County periodically receives offers to donate lots to the County. While the County needs
to have a public purpose for accepting gifts, it has been accepting gifts of lots affected by the 2018
Kilauea eruption as promoting the public purpose of hazard reduction, and the same public purpose
would apply to any gift of lots in any of the mapped volcanic or multi-hazard areas.
Once ownership is vested in the County, the local government is faced with the same challenges that
arise in Lot Buyout programs – i.e. what to do with this unplanned-for asset – and the options available
to the County are the same as in the Lot Buyout scenario. See the discussion of The Land Disposal
Challenge above.
Publicly Owned Lot Retirement / Land Banking
Cleveland, OH: The 2008 foreclosure crisis was particularly acute in Cleveland, with surrounding
Cuyahoga County coming into possession of thousands of vacant and abandoned properties through
tax forecloses. The County created the Cuyahoga County Land Reutilization Corporation to act as
administrator of a land bank for these properties. Funded with $7 million collected annually from
penalties and interest on delinquent tax accounts, the land bank set about demolishing vacant and
blighted properties, completing 8,000 demolitions in ten years. With the recovery of the real estate
market in more recent years, the land bank has switched its focus from demolition to rehabilitation,
seeing some of its parcels returned to tax rolls through active use.
Lot Retirement Program: A
program in which the local
government severs development
rights or amends subdivision plats
to “unplat” any lots that it owns or
controls in areas where it does not
want additional development.
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Option 5: Zoning and Development Restrictions
There are numerous examples of municipalities
implementing Zoning and Development Restrictions to
reduce the development potential in hazardous, polluted,
or hard-to-serve locations. One common restriction
codified in zoning ordinances is enhanced building
standards in FEMA-designated floodplains, often
requiring two feet of elevation above base flood levels.
Other examples include limitations on development in
coastal areas, on steep slopes, in earthquake risk areas,
and along the wildland-urban interface. In some cases
restrictions are based on a publicly sponsored map or study, while in other cases private property
owners are required to produce studies or maps documenting the lack of risk or pollution.
In Hawai’i County’s circumstances, many different types of development restrictions could be explored.
This toolkit explores four that may be directly related to reducing the size and permanence of future
development in hazard areas: (1) Rezoning to limit the permitted uses of property, (2) Limiting
maximum dollar amount of investment into residential construction, or restricting maximum house size
to limit the likelihood of long-term occupancy, (3) Using existing state statutes to limit the expansion of
residential development on lots that are classified for agricultural uses, and (4) Limiting discretionary
building and wastewater approvals, and.
Importantly, exposure to some types of hazards (such as floods) can be mitigated on or near a defined
site, while exposure to other types of hazards (such as lava flows) cannot. Where projected exposure
cannot be mitigated, development restrictions can establish an acknowledged level of potential loss. For
example, restrictions on the size or permanence, permitted habitability, or level of investment in a
house can limit the levels of financial loss and reduce the likelihood of human injury anticipated when a
hazard event occurs. Just as importantly, restrictions on development can discourage some property
owners from developing property that they otherwise would have developed. Hawai’i County has
already explored possible development restrictions to limit uses on agricultural lands in Policies 40 and
41 of the Ka’u Community Development Plan.
• Rezoning or Re-designation to Limit Permitted Uses of Land
The most straightforward type of development restriction is the rezoning of land to limit the
types of uses and structures permitted to be put on the lot (within the limits of state zoning and
land use authority). For example, land that is currently zoned for residential use could be
rezoned for agricultural use, or regulations for land already zoned for agricultural use could be
revised by the County to limit the construction or installation of habitable structures. Similarly,
the land could be re-designated from another Hawaii state land use category to “agricultural” or
from “agricultural” to “conservation” if the land meets state standards for that new designation.
The limit on use of rezoning or re-designation is that each property owner must generally be left
Zoning and Development Restrictions:
Zoning, subdivision, and other
development restrictions that would
reduce the size, intensity, structure
location or permanence, or
developability of land in the future, or
that would change required or
permitted water or wastewater
treatment standards or approaches.
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with a “reasonable economic use” of the property, and if land is not economically viable for
agricultural use the next-least-intensive use of property is often some form of habitable
structure that could be occupied (at least periodically).
• Limiting Maximum House Sizes or the Dollar Value of Housing Investments
Establishing a maximum size limit for new house can significantly reduce the risks to public
health and safety created by construction in hazardous areas by discouraging construction of a
house for continuous (rather than occasional) habitability, and making it likely that fewer people
will be occupying the house at any given time. While most residential zone districts do not
include a maximum house size, communities such as Pitkin County, Colorado, have established a
1,000 square foot maximum house size in rural and remote areas that are difficult to serve with
public and emergency services.
To ensure that future dwellings in underserved subdivisions and other mapped hazard areas are
small and able to be relocated, the County could limit new housing to Efficiency Dwellings (as
defined in the Hawai’i County Code) and require that they be located and installed so that they
can be removed in case of a hazard event. Most communities that allow these types of small
dwellings require that they be installed on permanent foundations and be required to connect
to water, sewer, and electric utilities. In this case, however, the County might consider
prohibiting installation on permanent foundations in order to make removal of the Efficiency
Dwellings easier and to minimize loss in case of a hazard event. Typical requirements that the
Efficiency Dwellings be anchored or tied down to limit risks from high winds should still apply.
To further ensure that the unit can be evacuated from the lot when there is advance warning of
an imminent hazard event, such as a hurricane, the County could require establish a maximum
driveway grade from the public right-of-way to the installed location.
This same outcome can effectively be accomplished by limiting the maximum dollar amount of
investment into the construction of a home. The County can discourage investment in
underserved and hazardous areas by refusing to issue building permits for investments that
exceed a stated portion of the existing property value. Dollar limits on new investment are an
indirect way to encourage smaller structures and reduce the potential dollar value of property
losses from future hazards. They also discourage bargain-hunters from seeking out the least
expensive lots (which are often also the hardest-to-serve and the furthest from good roads and
emergency access/evacuation routes) in order to spend more of their housing budget to build a
larger or more permanent house in a known hazard area. We understand that Hawai’i County
has already implemented a dollar limit system in some circumstances.
Future construction on lots where these limits apply will more like a cabin than a primary
residence in size. As a general rule smaller, less permanent, and less habitable structures are
generally less likely to be occupied year-round and are less likely to be occupied by fewer
people, both of which reduce the risk of public injury or death and the difficulty of evacuating
occupants of the development when an emergency occurs. The lower dollar cost of building or
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installing smaller homes, or an upper limit on investment in construction that limits house value,
also reduces the potential dollar value of property lost due to possible future hazard events that
cannot be mitigated on-site (such as lava flows). While many smaller, cabin-like homes are
already occupied year-round in Hawai’i County, these types of development restrictions are
likely to discourage a significant number of vacant lot owners from deciding to develop their lots
with homes in the future.
• Limiting Discretionary Building and Wastewater Approvals
Often, applicants for development of a lot or parcel require a discretionary approval from the
local government in order to move forward with their project. For example, they may need a
variance from a setback, maximum lot coverage limit, parking location requirement, access
driveway grade or slope limit. The County decides whether to grant driveway access to lots
when that access is at a grade steeper than eight percent. They may also need a discretionary
approval from the state government. Where applicants propose development in areas with no
sewer system, they must seek state-level discretionary approval from the Wastewater Branch of
the Department of Health to install an individual wastewater system on any lot less than 10,000
square feet in area. When the County or the State approves these types of requests on lots in
mapped hazard areas, they effectively facilitate the very development they would like to
discourage.
To avoid that result, some communities such as Youngstown, Ohio, have adopted limits on the
types of variances to building and service standards that they are willing to grant. After
determining that it would not be able to provide effective police and fire services to an outlying
and sparsely developed area of the City, Youngstown adopted a Limited Service Overlay zone
district that prohibited the approval of conditional uses, uses that would result in additional
population in the area, uses that would require more police or fire protection, investments that
use federal or state funds, or investments that could increase public maintenance expenses. The
City also considered prohibiting the granting of development variances, but concluded that it
could not extend the Overlay to prohibit those types of decisions due to the requirements of
Ohio state law. The goal of the Overlay was to prevent bargain-seekers from purchasing low
value lots and developing them in ways that would put more people in harm’s way and increase
the City’s financial burdens.
• Additional Permitting Requirements
Another form of development restriction is to require that applicants for residential building
permits first provide additional documentation that lots created before some of the current
subdivision regulations are in fact safe for development with economic uses, or that residential
development is the only reasonable economic use of the land.
In 1976, the Hawai’i Revised Statutes Section 205-2 assigned state-wide classifications for land
use, creating four districts: urban, rural, agricultural and conservation. These classifications
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limited permitted uses in the respective districts. Much of the land in the underserved
subdivisions and “other areas” of Hawai’i County discussed in this report has been classified as
agricultural, which generally permits construction of a farm dwelling to support the primary
agricultural use. Additionally, lots created prior to June 4, 1976 (the effective date of the
statute) are allowed single family dwellings without any farm-related activity.
Currently, the County requires the filing of a viable agriculture plan before issuing permits for
the construction of a second farm dwelling in the State Land Use Agriculture District. However,
this requirement would only apply to lots created after June 4, 1976. One option would be for
the County to require a viable agriculture plan for any dwelling (including the first farm dwelling)
on lots created after June 4, 1976, in the SLU Agriculture District.
The County could use this same general approach to limit construction of homes on lots now
designated as agricultural but created before June 4, 1976, where construction of a dwelling is
currently permitted by right. In many cases these lots have site conditions or access constraints
under which additional development would create wildfire risks, water quality impacts, or
increased risks to public safety, and the County could require that the applicant obtain an
additional permit documenting that those adverse impacts will not occur.
Development restrictions such as these are sometimes subject to litigation, but are often upheld by the
courts. The basic legal inquiry focuses on whether the local government’s action is rationally related to a
legitimate public purpose and whether the regulation leaves each property owner with a reasonable
economic use of his or her property. If a rational relationship is not found, or if no reasonable economic
use remains to the landowner, the court may find the regulation to be a taking of private property
without just compensation. On the other hand, even a substantial diminution value does not necessarily
mean that a regulatory taking has occurred, as recently confirmed by the U.S. Ninth Circuit Court of
Appeals in the case of Bridge Aina Le’a, LLC v. State of Hawaii Land Use Commission.
In this case, each of the proposed development restrictions (and others) have a rational relationship to a
legitimate governmental purpose – i.e. reducing the potential risks to public health, safety, and property
value that occur when land in known volcanic or multi-hazard areas is developed, as well as increasing
the likelihood of a successful evacuation when emergencies occur. In addition, each of the listed
potential development restrictions leaves the landowner a reasonable economic use of the property – in
many cases including the right to build or install a small house, which is the most reasonable economic
use of a residentially zoned lot, even if that house is smaller or less permanent than it was before the
restriction was imposed. Importantly, if these types of development restrictions are challenged, the
court’s evaluation of what is a reasonable economic use of the property will consider the value of the lot
in light of the mapped hazard risks, which is often low. The lower the existing property value, the lower
the level of permitted investment or reinvestment that needs to occur in order to show a reasonable
economic use of the property.
Zoning and development regulations can generally be adopted using the County’s general zoning and
subdivision powers, as well as any additional specific powers granted to address hazardous conditions.
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In addition, unintentional denials of all economically reasonable uses of the lot (due to site-specific
factors that were not known when the regulation was adopted) can be addressed through a Beneficial
Use Determination process as described in Section 2.5.
Examples of Development Restriction Implementation
Pitkin County, CO: In 2006, in support of efforts to protect rural character and reduce greenhouse gas
emissions, the County amended its land use code to reduce the maximum allowable house size in
various zoning districts. Those in areas zoned Rural and Remote (RR) were limited to 1,000 square feet
measured from the outer walls of the dwelling.
Youngstown, OH: This severely financially challenged community adopted a Limited Services Overlay
(LSO) district into its zoning code, applied to areas with large amounts of vacant land. The LSO aimed
to discourage investment or reinvestment in such areas, because the costs of providing additional
municipal services and infrastructure would exceed the benefits of new investment or reinvestment.
Only agricultural or animal-related uses were permitted in these areas, and no discretionary approvals
would be granted. Further subdivision of existing lots was prohibited, to avoid increasing the number
of lots that would allow development. The City also refused to apply for or allow the use of grants to
construct housing in these areas, and required anyone wishing to build to demonstrate that their
project generated the tax revenue necessary to support provision of services, or if it did not, to
provide the funds required to pay for the provision of those services.
Ozone Park, Queens, NY: One of many “downzoning” actions taken in New York City, this 2013 action
applied to a 530 block area with the intent of “reinforc[ing] neighborhood character.” The ordinance
limited taller, more dense multi-family developments to established commercial strips, while
preventing them from encroaching on residential side streets by eliminating a commercial overlay
that existed on those streets. The side streets reverted back to the underlying residential zoning
districts, which primarily permit single and duplex dwellings. The objective of the ordinance was to
maintain the single dwelling character of the side streets, while continuing to allow mixed use, multi-
dwelling and strictly commercial enterprises in areas that had been deemed more appropriate for
those uses.
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Option 6: Facilitated Lot Consolidation or Exchange Program
In some cases, local governments with large underserved
subdivisions have decided to reduce the potential for
future development of those lots by creating a Facilitated
Lot Consolidation or Exchange Program. Under this type
of program, the County acts as the “middleman” between
potential lot sellers and buyers in order to reduce the
number or improve the location of lots that are likely to
be developed. Hawai’i County has discussed a version of
this approach in Policy 51 of the Ka’u Community
Development Plan.
In the lot consolidation version of this approach, the
County (1) compiles an inventory of vacant parcels that are adjacent to developed lots, (2) contacts
property owners of vacant lots to determine their interest in selling, and if there is interest, (3) contacts
the owners of the developed lots to determine their interest in purchasing the adjacent vacant lot
(often at a low price because of the vacant lot owner’s lack of interest in developing the
property). Similar programs – sometimes called “side lot” programs -- have been implemented by cities
such as Detroit and Cleveland to reduce potential risks and service costs in largely vacated
neighborhoods.
In the lot exchange version of this tool, the County (1) identifies those vacant lots in underserved
subdivisions that are potentially most expensive to serve or at highest risk (often those on the furthest
peripheries of the subdivision), (2) identifies lots of similar assessed value, size, or character in locations
that the County owns that are less expensive to serve, at lower risk of hazards, or easier
to evacuate (often nearer the heart of the subdivision or in a planned-but-never-built activity center on
a planned arterial or collector street), and (3) contacts the owners of the more hazardous, peripheral
lots and offers them the chance to exchange their lot for a more central and easier-to-serve lot. The
Federal Aviation Administration uses an analogous approach authorized in FAA Part 150 (Airport Noise
Compatibility Planning Program) to facilitate relocation of households impacted by expansions of airport
noise contours to comparable properties further from those contours. As a result of each lot exchange
transaction, the County disposes of title to one of its centrally located lots, but gains title to a more
remote lot, from which it will then need to sever the development potential. See the discussion of The
Land Disposal Challenge above.
While private real estate agents could and often do perform all of these services, the low value of the
lots involved and the time and effort required to make these connections often result in low levels of
real estate engagement in this market. In contrast, the County’s interest in reducing risks to public
health and safety and potential future service costs gives it an additional incentive to facilitate these
transactions.
Facilitated Lot Consolidation or
Exchange Program: Zoning,
subdivision, and other development
restrictions that would reduce the size,
intensity, structure location or
permanence, or developability of land
in the future, or that would change
required or permitted water or
wastewater treatment standards or
approaches.
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Either version of a Facilitated Lot Consolidation or Exchange program would require an investment of
the County’s staff resources to initiate and operate such a program. The County would need to
establish an initial inventory of the types of vacant lots it wants to target, keep that inventory
current, contact property owners, and respond to inquiries from potential buyers who may wish to
augment their own lots by buying adjacent property or to move opportunity to build or install a house to
a safer location. Since such a program is always voluntary, any reduction in potential development on
hazardous lots will probably occur gradually over time. In Routt County, Colorado, a voluntary lot
consolidation program produced few lot transfers compared to the time and effort required to
administer the program, and it was later discontinued. In Hawai’i County, however, the large number of
County owned or controlled lots reduces the time and effort needed to identify potentially exchange-
able lots, which could make lot exchanges a good supplement to other land reallocation tools.
There is no State enabling legislation needed to initiate a Facilitated Lot Consolidation/Lot
Exchange program, because it simply involves the purchase and sale of real property to achieve a very
clear public purpose.
Examples of Lot Consolidation or Exchange Programs
Routt County, CO: In the 1970s, Routt County approved the platting of the very large
Stagecoach subdivision, which included about 2,000 mostly one-acre lots requiring a central sewer
system. When demand for the lots weakened, the special sewer district that had begun to build that
system went bankrupt and was prohibited from investing to connect more lots to the system.
While updating its community plans in 2017, the County found that only 378 of 1,938 platted lots in
the south Stagecoach had been developed, and those lots were scattered randomly among the
remaining undeveloped lots. Though there was little demand for the smaller lots that had
been platted in the original subdivision, the County had seen growth in demand for large-lot
development, leading it to believe that a lot consolidation program in the area could be effective.
After creating an inventory of vacant lots whose owners would be willing to sell, the County began
communicating that information to partners such as realtors and homeowners’ associations who
could match available lots with demand for lots. Consolidation was accomplished by means of “sales
pools” made accessible to buyers as well as annual lot auctions. Unfortunately, the program resulted
in few lot consolidations and was later discontinued.
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Option 7: Building Permit Moratorium
Hawai’i County’s ultimate goal is to manage development
and redevelopment to minimize hazard exposure and
provide adequate, cost effective services to its citizens.
There may be cases where part of that strategy is to use a
Building Permit Moratorium to delay the issuance of new
development approvals while a better location for
development is designed and serviced or other approaches
to reducing hazard exposure are adopted. For example, the
County may want to avoid new construction in an
underserved subdivision or contiguous hazard area because it plans to approve development of an
activity center that would be easier to serve and evacuate, and to which surrounding development could
be induced to relocate or sell development rights. There are numerous successful examples of Building
Permit Moratoria that have been implemented to allow local governments to address complex planning
and development challenges throughout the U.S. This tool is particularly important to consider in cases
where failing to impose a moratorium will create or increase risks to public health and safety.
A Building Permit Moratorium is simply a local ordinance suspending the issuance of building permits in
a defined area, for a defined length of time, for a stated public purpose. Although state laws differ,
moratoria are generally available in most states provided that (1) the action is taken for a legitimate
public purpose, (2) the suspension is for a known and limited period of time, (3) the moratorium is to
allow the government to take actions that address the stated public purpose or challenge, and it uses
the additional time to do that.
In this case, the legitimate public purpose is the protection of public health and safety from known and
mapped hazards, which is among the strongest purposes that can be cited, and one that is very likely to
be upheld if the ordinance is challenged. As a temporary solution, a moratorium should remain
in effect only during the time needed for creation and implementation of more permanent actions to
reduce threats to public health and safety – for example, to design and implement an effective Lot
Buyout program. In almost all cases, moratoria lasting six or 12 months have been upheld when
challenged, because those are considered reasonable periods of time for a local government to
complete a plan or issue contracts for needed development of public improvements that would address
the stated challenge. Moratoria or extensions of moratoria lasting 18 months or more have also been
upheld, but the longer the moratorium lasts the greater the burden on the local government to show
that it was actively working towards a meaningful solution or investment if the moratorium is ever
challenged in court.
Finally, local government must be actively trying to develop a solution to the stated challenge – not just
using the moratorium as a stalling technique in hopes that affected property owners will lose interest in
developing their lots. In this case, the justification for the moratorium could be the development of a
County plan to prioritize Lot Buyouts, or to design a Transfer of Development Rights System, or to draft
or adopt Development Restrictions to limit the size or amount of allowed investment on lots in mapped
Building Permit Moratorium: A
regulation adopted by a local
government suspending the issuance of
building permits in a defined area to
give the government time to design a
thoughtful response to development
challenges in that area, and usually
lasting not longer than 18 months.
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hazard areas. The justification could also be to allow the County to issue contracts for the design and
construction of new activity centers in locations consistent with the County comprehensive plan that
could then serve as Receiving Areas for Transferred Development Rights or Lot Exchanges.
Although Hawaii Revised Statutes appear to contain no specific enabling authority for development or
Building Permit Moratoria, the Hawaii state legislature has considered proposals to adopt moratoria in
some circumstances.
Examples of Development Moratoria
Livermore, CA: The City of Livermore enacted an ordinance prohibiting issuance of new residential
building permits until local educational, sewage-disposal, and water-supply facilities complied with
specified standards. The stated purpose of the ordinance was to further the health, safety, and
welfare of the citizens of Livermore and to contribute to the solution of air pollution. Although
Associated Homebuilders brought suit against the City challenging the ordinance, the Court upheld
the temporary moratorium on building permits.
Option 8: Building Permit Denials
A final option to reduce risks to public health and safety
caused by development on lots in known hazard areas is
Building Permit Denials – i.e. simply to deny issuance of
building permits in some or all of those areas, not just
temporarily but permanently.
Because this option raises several difficult questions, the
tool is usually generally reserved for the most hazardous
lands that have the highest likelihood of resulting in
human injury or death in case of an accident. In some
cases, Building Permit Denials are not absolute but instead operate as “quotas”; they allow the issuance
of additional building permits up to a known limit based on the documented capacity of an area to
absorb new growth. In Hawai’i County, for example, the number of new building permits issued could
be based on the adequacy of evacuation routes in the highest risk areas. This tool can also be
implemented as a delay in approval of building permits until such time as an applicant can show that the
public health and safety risks have been removed, even if it is unlikely that those risks can or will be
removed.
Before discussing this option, it is important to note that local governments almost always have the
authority to condition (rather than deny) building permits subject to the provision of adequate routine
and emergency access, drainage, and water and sewer service. Building Permit Denials should only be
Building Permit Denials: A regulation
adopted by a local government
prohibiting the issuance of building
permits in a defined area due to public
health and safety risks, particularly
where issuance of the permits would
create a public nuisance, without
payment of compensation.
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considered when that access and public services are already in place, or the applicant is able to supply
them, but the County still wants to prevent development or redevelopment of the lot.
As noted earlier, the U.S. Constitution generally requires that private property not be taken for public
purposes without due process and the payment of just compensation. In the 1992 case of Lucas v.
South Carolina Coastal Commission, the U.S. Supreme Court considered a state action that prohibited
construction of a barrier island house on a residentially zoned lot because it was in a mapped area of
high hurricane risk. The Court held that denial of the right to build a house was in effect denial of all
reasonable economic use of the property, and that South Carolina owed the property owner just
compensation for the lot. However, the Court left open two possible ways to avoid the payment of just
compensation. The first would have been to allow some reasonable economic use of the lot other than
building a house. Importantly, in that case oceanfront property was a very limited resource that had
relatively high value in spite of the hurricane risk, so the alternative use of the property would have had
to allow more use or structure than if a low value lot were located in an underserved subdivision with
a surplus of lots available for purchase.
As a second alternative, the Supreme Court indicated that if the only reasonable economic use of the
property was a “nuisance” at common law, denial of that use might not require the payment of just
compensation. While that situation will not occur often, it did occur in the 1994 case of The Mill, Inc., v.
State of Colorado, and Colorado cited the Lucas case in defense of its actions. The Mill litigation arose
when the state prohibited a mine from using the only economically viable form of mining on the
property because of resulting pollution to nearby streams. The property owner claimed that this
resulted in a taking of all use of the property in violation of the Lucas holding that should require
payment of just compensation. The Colorado Supreme Court held, however, that the since the resulting
pollution would have been a nuisance at common law, the state’s actions to prevent that nuisance fell
within the Lucas exception. As a result, the mine was prohibited from engaging in its one and only
reasonable economic use and the state was not required to pay compensation.
In Hawai’i County, action to deny building permits in areas of very high risk would probably have to be
accompanied by some form of direct or indirect compensation unless its actions prevented a public
nuisance. That might be the case, for instance, if the County could show that issuance of a building
permit for a new house on a vacant lot close to existing houses was likely to increase risks to the
surrounding developed lots. One example where this could occur is a catastrophic event that likely to
carry debris across property boundaries, and where the construction of a new home significantly
increases the likelihood that debris will damage existing homes. Another possibility is a case in
which construction of the new house would significantly increase the likelihood that water flows would
be diverted, either because of the home foundation or other grading and property clearing, and instead
flow across an important evacuation route. That could be argued to create a public nuisance further
endangering public health and safety. A third possibility would occur in an area with inadequate access
where each additional house compounds existing challenges of providing residents with evacuation
routes or providing emergency personnel to ways to gain access to the threatened properties.
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Because it could be difficult to show that construction of a new home will likely create a public nuisance,
a County denial of building permits should probably be accompanied with some form of direct or
indirect compensation or relief. While the most common form of relief is a money payment, it may also
take the form of a Transferrable Development Right that allows the property owner to obtain money by
selling that right, provided the TDR system is designed and calibrated so that it is likely the property
owner could actually sell the right for some reasonable value. To avoid potential litigation, the County
might also want to amend its zoning variance and relief provisions and be willing to allow the
construction of an Efficiency Dwelling, if the property owner who has been denied a building permit can
show that the property would not create a public nuisance if the structure is later damaged or
destroyed due to any of the mapped hazards.
Conclusion
The eight approaches outlined above provide Hawai’i County with a wide range of options to reduce
public exposure to public health and safety hazards. Because of the wide variety of risks that exist in
different areas of the County, differing access conditions and evacuation routes, and differing mixes of
developed and undeveloped lots in each of the risk areas, it is unlikely that any one of these tools will or
should apply to all lots on mapped hazard areas. Instead, it is likely that the County will need to consider
a mix of these tools and a tailored approach to different risk, access/evacuation, and development
scenarios. The second part of Clarion Associates’ this document describes combinations of the tools
outlined above that may be most effective in addressing these different risk scenarios.
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Part 2. Land Reallocation Tradeoffs and Strategies
The second section of this document provides our recommendations as to which of the tools described
in Part 1 might best promote a “Low Tolerance for Risk” planning scenario for the County of Hawai’i, in
what combinations, and under what circumstances, as well as a description of the tradeoffs between
those strategies and the challenges to implementing them.
There are three tools discussed in Part 1 that we do not investigate further, however: Purchase of
Development Rights (PDR), Publicly-Owned Lot Retirement, and Building Permit Moratoria.
We do not elaborate on the possibility of a PDR program for two reasons. The first immediate challenge
is that, in areas where 2018 Recovery funds are not available, the County would need to identify a
significant source of funding to purchase development rights. Second, even if funding could be
identified, we think few landowners would have an incentive to sell development rights rather than
selling the land itself, because the seller of development rights retains ownership of the land and the
related duty to pay taxes on that land. In many cases, the lots in mapped hazard areas from which
development rights could be purchased have little agricultural or habitat value, and the number of
property owners who would be willing to continue paying taxes on land with very limited uses is
probably not large. In contrast, participation in a Lot Buyout program would relieve the property owner
of the duty to pay taxes, because the County would then own the lot itself. As a result, in the pages
below we mention Purchase of Development Rights as option to a Lot Buyout program. In those cases
where the County identifies funding for a Lot Buyout program, it could offer to instead purchase
development rights if the seller prefers to keep ownership of land without development rights, but we
recommend against developing a freestanding PDR program.
In addition, this Part 2 does not further evaluate the possibility of retiring tax default lots or other lots
that come into public ownership or control. Instead, we address the potential to use of some of the
publicly controlled lots in less hazardous areas as part of a Facilitated Lot Exchange program. Lots that
cannot or should not be offered in exchange for more hazardous lots should be unplatted or have their
development rights severed and retired by the County.
Finally, we do not discuss Building Permit Moritoria, because that is not a permanent solution for
reducing development in underserved subdivisions or other hazard area. Rather, it is a temporary
measure that the County could impose if time is needed to create and implement more permanent
strategies for preventing development, such as those discussed below.
2.1 Establishing a Strong “Low Exposure/Limited Investment” Policy
Before addressing possible combinations of land reallocation strategies, it is important to discuss the
policy background behind those strategies. Inherent in the implementation of a “Low Tolerance for Risk”
Scenario to reduce potential development in mapped hazard areas is a County commitment to not
approving plan amendments that would increase the potential development in those areas. In other
words, inherent in our evaluation of the potential effectiveness of different land reallocation strategies
is an assumption that the County will (1) not approve rezoning requests, re-designation request for a
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more developable land use category, land subdivision applications, or requests for variances from lot
access/driveway standards, (2) work with the Hawaii Department of Health to limit or prohibit
approvals for new on-site wastewater systems that would increase development density in mapped
hazard areas, and (3) not spend discretionary funds to improve extensions of existing water and sewer
lines or to improve road access in those areas (unless necessary to improve evacuation routes in areas
where those routes are already inadequate to serve the existing population). Not only would County
approvals of those types of requests undercut the effectiveness of the strategies outlined below, but it
will be difficult to explain to property owners in mapped hazard areas why the County is restricting
development in some areas while approving new development in other, equally hazardous areas.
One good example of a strong policy basis to discourage future development in financially or
environmentally unstable areas is Youngstown, Ohio’s, Limited Service Overlay district. In that
community, the City Council established a policy to deny all requests for discretionary approvals (except
variances required by state law), all requests to vary from citywide street access and infrastructure
standards, and all proposals to spend discretionary grant funds in a defined area of the City where
future growth would require the provision of services or installation and maintenance of roads and
infrastructure that the City could not afford to provide. That policy put the public, existing property
owners, and potential property buyers in that area of Youngstown on notice that, although the City
would not prohibit all development in the area, it would not take any actions that would encourage or
facilitate that development. Youngstown’s actions were motivated by the City’s very serious financial
challenges, but in Hawai’i County a similar policy would be motivated and justified by the stronger public
purposes of reducing exposure to mapped hazards to public health and safety.
2.2 Calibrating the Strategies
The five tools described in the Toolbox that remain to be evaluated are: Transfer of Development Rights
(TDR), Lot Buyouts, Development Restrictions, Facilitated Lot Exchange, and Building Permit Denials. Not
surprisingly, we feel that these tools would be more effective in reducing the risk of development in
mapped hazard areas or underserved subdivisions if used in combination, rather than as individual
freestanding programs.
2.2.1 Underserved Subdivisions
We began the analysis with Hawai’i County’s longstanding recognition that planning and zoning should
distinguish between:
• Underserved Subdivisions -- which were often created long ago and where provision of
infrastructure, services, adequate roads is both difficult and expensive; and
• Other Areas -- which include centers which are generally less difficult and expensive to serve as
well as more rural locations where platted subdivisions have not been established.
In alignment with past County planning efforts, we placed a higher priority on relocating potential
development from lots that are located in underserved subdivisions, as compared to redirecting
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development from other areas of the County. All of the remaining discussion about possible land
reallocation strategies are described as subsets of this basic planning policy distinction.
2.2.2 Level of Exposure to Hazards
Our second level of analysis focuses on a key difference between the County’s current planning effort
and past General Plan scenarios – namely, a heightened emphasis on land reallocation away from key
mapped hazard areas. We recommend that the County of Hawai’i consider two different combinations
of land reallocation tools:
• A High Hazard Exposure Strategy – to be applied in mapped hazard areas of the County where
the likelihood of loss of life or significant damage to property from a future hazard event is high;
and
• A Moderate Hazard Exposure Strategy – to be applied in mapped hazard areas where the
potential for impacts to public health and safety or property damage is lower or mitigatable.
In underserved subdivisions only, we have addressed a third category of lots that are exposed to Low- or
No-Hazard.
To design these two strategies, Focused Planning Solutions provided information about the number of
lots in underserved and conforming subdivisions, and augmented this with information about various
mapped areas of hazard exposure related to volcanic events, coastal hazards, geology/soils, wildfire and
several other types of hazards for which mapped data is available. We then focused the analysis on
those types of hazards that are geographically defined, as opposed to those – like geology/soil/
earthquake risks -- that affect most or all of the island. We then distinguished between those hazards
that are difficult or impossible to mitigate through on-site construction techniques, such as volcanic
risks, and those that can be mitigated to some extent to some extent, like coastal hazards. Where the
mapped hazard is difficult or impossible to mitigate on-site, the strategies should focus more heavily on
avoidance of future development.
For purposes of this document, we categorized these hazards as follows. High Hazard Areas include lots
in Volcano Risk Areas 1 and 2, as well as areas of historic lava flow, including the most recent 2018
Kilauea eruption; Moderate Hazard Areas include lots in coastal hazard areas. A map of the High Hazard
Areas and Moderate Hazard Areas under these two assumptions is shown in Appendix B. Obviously,
there are many alternative ways to categorize mapped hazards in the County. For example, the County
could decide that coastal lots at high risk of wildfire events should be included in the High Hazard Areas
strategy; or it could decide that mapped areas of historic lava flow should be included in the Moderate
Hazard Areas category. If these changes are made, the number of lots covered by each strategy should
be recalculated, and the strategies may have to be refined to respond to those changes.
2.2.3 Vacant or Built Status
Within the subcategories of High Hazard Areas, Moderate Hazard Areas and Low or No Hazard Areas, we
then evaluate separately which land reallocation tools should apply to:
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• Vacant Lots; and
• Built Lots (including partially built lots).
In the case of both vacant and built lots these strategies are intended to apply prospectively as
applications to build new houses, to install Efficiency Dwellings, or to repair or replace existing houses
are received by the County. They are not intended to apply to, or force the relocation of, County
residents who live in mapped hazard areas who have not experienced damage from a hazard event and
who intend to continue to occupy their current homes, unless the design of a Lot Buyout program
makes them eligible for a buyout and the owner decides to sell the property. Stated another way, the
strategies outlined below would apply when a property owner applies to the County for a permit to
change the existing use or structure in some way (or begins to make changes to the property that
require a permit without applying for that permit). Very few risk reduction strategies require or
encourage the relocation of existing residents who have not applied to change or improve their
properties simply because (1) it is easier for local government to prevent unwanted development in the
future than to remove existing development, and (2) very few programs have funding available to move
households that have not been damaged and do not want to move. One exception is the FAA Part 150
Airport Noise Compatibility Planning Program mentioned above, which authorizes local governments to
approach property owners in areas to be affected by expanded airport noise contours and find them
equivalent housing outside those noise contours. However, the FAA program is specifically authorized
and funded by federal law and operates for a very limited purpose that is unlikely to be replicated or
funded in the County of Hawai’i.
2.2.4 Number of Lots
Finally, in evaluating possible land reallocation strategies from these different perspectives, we also
considered the total number of lots included in different hazard exposure classifications. In this case
Hawai’i County has over 75,000 lots in underserved subdivisions and mapped hazard areas. That large
number, all by itself, suggests that any effective strategy will need to involve a combination of tools, will
need to be tailored to specific conditions in different parts of the county, and will need to be
implemented over a long period of time to be effective. It also suggests that any Transfer of
Development Rights created by the County needs to be carefully targeted and designed so that the
number of development rights available for sale or transfer from Sending Areas does not exceed the
capacity of Receiving Areas to absorb a realistic percentage of those transferred development rights
over time.
2.2.5 Strategy Overview Matrix
Clarion Associates then created the matrix below to reflect the factors listed above and illustrate which
tool or tools we recommend for further investigation in different mapped risk areas in the County of
Hawai’i. Blocks that are shaded dark green indicate a strong recommendation to apply the tool in that
situation. Lighter green indicates a secondary priority for applying the tool, or suggests that it be
considered in combination with tools shown by darker green blocks. White blocks indicate that
implementation of the tool is not recommended at this time. As shown in the table, we recommend
Hawai’i County Land Reallocation Toolbox and Strategies
Clarion Associates June 30, 2020 29
that the County’s Low Exposure/Limited Investment policy apply to all properties located in underserved
subdivisions – even those that are not in mapped High or Moderate Hazard Exposure areas.
PROPOSED STRATEGIES ___ High Priority ___ Secondary Priority
Subdivision/Lot Status Underserved Subdivisions Other Areas
Level of Hazard Exposure High Moderate Low/No High Hazard Moderate
Built Status Vacant Built Vacant Built Vacant Built Vacant Built Vacant Built
Number of Lots 22,659 5,290 45 78 25,045 11,869 3,375 3,207 659 3,179
Lot Buyouts
(with PDR Option)
Development Restrictions
Transfer of Development
Rights
Facilitated Lot Exchange for
Public Lots
Building Permit Denial for
Inadequate Evacuation or
Public Safety Concerns
After summarizing each of the recommended strategies, this document summarizes what each of these
strategies would mean for property owners who:
1. Prefer to stay and live on the property at least part of the time; or
2. Are prepared use the property for only non-residential purposes, or to leave the area if
compensation or a good alternative is offered.
After we have suggested which combination of tools may best apply to different types of lots in each of
the situations shown in the table, we then estimate the likely reductions of development in those areas
if the strategies are implemented carefully and consistently over time. These estimates are, in turn,
intended to be used by Focused Planning Solutions in developing its “Low Tolerance for Risk Scenario”
for the General Plan process. Finally, we identify the implementation efforts and challenges required to
pursue each of these two strategies.
Before describing each of these strategies, it is useful to remember three key points about County
powers to regulate development.
1. While zoning and development regulations must generally leave each property owner with a
reasonable economic use of his or her property, and in the case of residential lots that
sometimes means a habitable structure, it does not mean that the County must leave each
property owner with the right to build a house of whatever size and configuration the owner
wants.
2. The County’s duty to protect public health and safety is given great weight by the courts.
When challenged, regulations adopted to protect human life from injury or death are
generally upheld if they are adopted after due process and they are rationally designed to
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achieve their intended purpose. Restrictions on individual property to protect the public or
other property owners are given particular weight.
3. While some zoning and development regulations can be held to be “regulatory takings” of
property for which the County must pay compensation, those cases are rare. When
compensation is due, it does not always have to be cash compensation; sometimes indirect
compensation is approved, and the County can establish a Beneficial Use Determination
system to evaluate claims as to whether compensation is due on a case-by-case basis based
on specific facts, rather than making the decision in advance.
2.3 Strategies for Underserved Subdivisions
2.3.1 Lot Buyouts
We understand that the County has decided to pursue a voluntary housing buy-out program as part of
the recovery from the 2018 Kilauea eruption. At the time of this report, the feasibility, specific design,
and criteria for the program had not been finalized. If funding is available for that program or a similar
Lot Buyout program in the future, we recommend that it be implemented according to priorities
approved by the County Council.
Regardless of whether a Lot Buyout program is implemented in areas affected by the 2018 Kilauea
eruption, this tool should be considered a very effective tool for reducing development potential in
mapped hazard areas in anticipation of possible future hazards – provided that funding is available. A
Lot Buyout program serves the dual purposes of assisting some of those most directly affected by a
disaster and would reduce the number of lots in mapped hazard areas. We recommend that this tool be
applied to built lots in both High and Moderate Hazard Exposure areas of underserved subdivisions and
to built lots with High Hazard Exposure in other areas. As lots are purchased, we recommend the
County “unplat” or otherwise sever the possible development potential from these lots.
However, we assume that possible recovery funding for a Lot Buyout program will not be sufficient to
buy all of the lots affected by any given hazard event, and that some lot owners affected by that event
will not want to sell their lots. The strategies below are therefore structured to apply to:
• Owners of lots that qualified for a Lot Buyout program but for which funding was inadequate to
purchase the lot;
• Owners of lots in that did not qualify for a Lot Buyout program; and
• Owners of lots affected by a hazard event where no Lot Buyout program is implemented.
2.3.2 Vacant Lots
Development Restrictions
There are over 47,000 vacant lots in underserved subdivisions, of which over 22,700 are in High and
Moderate Risk Exposure areas. These are lots on which no home currently exists, and for which a legal
“right to rebuild” does not apply. In addition, these are lots on which lives and property are not
currently at risk from hazard events, so limiting development on these lots in ways that reduce the
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potential for future loss of life and damage to property should be among the County’s highest priorities.
To do that, the County should use its zoning powers to adopt significant development restrictions on
new construction. Such restrictions could take various forms – including changes to current zoning,
limiting new house size or value, building permit moratoria or building permit denial.
Rezoning or Re-designation
Changing the existing zoning or state land use category is one effective way to limit development
capacity, especially since many areas are not zoned for residential development, but are rather zoned
for agriculture in a way that also allows a residential use. Three types of actions should be considered.
1. In areas of underserved subdivisions where platted lot sizes are large enough to support
agricultural enterprises, the County could consider rezoning or re-designation to limit the lot to
purely agricultural use and eliminating possible residential structures to the extent possible.
Where underserved subdivision lands have State of Hawaii agricultural designations, this would
require working with the State government to limit the availability and extent of farm dwellings
available.
2. Where there are vacant lots adjacent to the National Park or other areas designated open space
or forest reserves, and the operators of those parks or preserves are interested in expanding or
buffering those areas, the operator could offer compensation and the lots could be rezoned or
re-designated to an open space or conservation category.
3. Finally, if lots are big enough and well situated to provide habitat benefits, compensation could
be offered by the managers of habitat programs and the properties rezoned or re-designated for
habitat purposes.
However, in many cases the existing lots in underserved subdivisions are small, may not have realistic
value for agricultural, open space, or habitat use. These are among the lots where the County may
consider allowing residential development only once a landowner has demonstrated that there is no
other viable economic use for their property aside from construction of a residence.
Limitations on Types of Dwellings
One effective tool (discussed in the Toolbox above) is to adopt zoning regulations limiting the maximum
size or permanence of new habitable structures built on the vacant lot – such as a requirement that only
Efficiency Dwellings may be installed on the lot. This can also be accomplished by limiting the total
dollar value of building permits that the County will approve, with potentially lower limits in
underserved subdivisions (although tracking the incremental value of building permits issued for
improvements to a specific lot can be difficult over time). Both restrictions result in smaller or less
permanent houses that tend to be occupied less frequently, and by fewer people, than larger and more
permanent houses. This alone can significantly reduce the number of residents or guests who need to
be evacuated and the risks associated with evacuation (including accidents and road closures). If a
hazard event occurs, smaller, less expensive, and less permanent homes result in much less property
damage and less financial loss if they are damaged by the disaster. To implement this approach, the
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County could adopt a maximum house size of 600 or 800 square feet, or it could restrict permitted
residential units to Efficiency Dwellings.
Requirements for Non-Permanent Installation
Installation of permitted Efficiency Dwellings could also be subject to a requirement that they not be
installed on a permanent foundation and that they be able to be accessed by a road or driveway with a
maximum grade of no more than eight percent so that the dwelling can be removed when there is
advance warning of a hazard event. Requirements that the dwelling be tied down or otherwise
anchored to withstand high winds in a manner that could be released by the owner should still be
required.
Viable Agricultural Plan Requirements
Another form of development restriction is to require that applicants for residential building permits on
land designated as agricultural submit to the County a viable plan to put the property to use for
agricultural purposes as a precondition for obtaining a building permit. In 1976, the Hawai’i Revised
Statutes Section 205-2 assigned state-wide classifications for land use, creating four districts: urban,
rural, agricultural and conservation. Much of the land in the underserved subdivisions and “other areas”
of Hawai’i County discussed in this report has been classified as agricultural, which generally permits
construction of a farm dwelling to support the primary agricultural use. To ensure compliance with the
primary agricultural use requirement, the County could require the filing of a plan identifying the
potential crops or vegetables to be grown or other agricultural products to be created, the volume those
products anticipated to be created, any required sources of supplemental water supply necessary for
that production, areas to be devoted to agricultural production, areas for storage of supplies,
equipment, and produce, and potential revenues from sales of those agricultural products. The County
would then review the plan to determine if the lot is a viable parcel for agriculture production (as
opposed to being primarily a residential lot with an accessory agricultural use) before issuing permits for
the construction of a primary or accessory farm dwelling.
Additional Permitting Plan Requirements
Because Hawai’i Revised Statutes Section 205, applies to lots created after June 4, 1976 (the effective
date of the statute), however it does not address potential service, safety, or evacuation issues on lots
created before that date and then later designated by the state as agricultural lands. To address safety
issues on these lots, the Hawai’i County could enact a requirement that the applicant provide a report
showing that the lot is safe for residential development as a pre-condition for issuance of a dwelling
construction or installation permit.
For example, the plan could require that the applicant show the proposed location of the Efficiency
Dwelling, confirm that the location is outside any defensible space requirements if the parcel is located
in a fire hazard zone, demonstrate that construction of the dwelling as proposed will not have an
adverse effect on groundwater quality, identify driveways and accessways between that location and
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the public rights-of-way with grades that do not exceed eight percent, confirm that the Efficiency
Dwelling will be installed and anchored so that it could be relocated in the event of a hazard event with
prior warning, confirm that the public rights-of-way serving the lot have adequate capacity to
accommodate potential need to evacuate the area, and that in the event the Efficiency Dwelling cannot
be evacuated (because of a hazard event that occurs without warning) the destruction of the Efficiency
Dwelling is unlikely to result in debris blocking public rights-of-way or driveways or accessways to or on
abutting properties. These are basic public health and safety concerns, and a requirement to document
compliance with these types of protections are generally considered well within the limits of County
regulatory authority.
To limit development of land subject to high lava hazard exposure regardless of State or County land use
and zoning, Hawai’i County could also consider enacting a requirement that the applicant provide a
geotechnical/geothermal report showing that the lot is safe for residential development without the
installation of a permanent foundation as a pre-condition for issuance of a building or installation
permit.
Regardless of which type of development restriction is chosen, it should be accompanied by the strong
Low Exposure/Limited Investment policy described above. New investments in water and sewer
infrastructure would not be made, new investments in roads would only be made to the extent
necessary to improve evacuation routes for existing homes, and variances and exceptions for new on-
site wastewater systems would not be approved.
Denial of Building Permits where Evacuation Routes are Inadequate
In addition to requiring that future Efficiency Dwellings can be moved from their installed locations to a
public right-of-way along a route with a grade of no more than eight percent, the County should
consider requiring an evaluation of those rights-of-way to serve as potential evacuation routes as a
prerequisite to issuance of new building or installation permits on vacant lots in both underserved
subdivisions and other High-and Moderate Hazard Exposure Areas. This is a situation where two
important legal principles come into tension. On the one hand, the law generally requires that each
property owner be left with a reasonable economic use of his or her property. On the other hand, local
government is charged to protect the health and safety of its citizens. As noted in the Toolbox above,
where the lack of adequate evacuation routes is likely to result in unsafe conditions during evacuations
or where damage to new homes may block evacuation routes, the County should consider denying
additional building permits. As an alternative, the County could adopt a regulation delaying the issuance
of building permits in these areas until such time as the availability of adequate evacuation capacity is
shown. Where the adequacy of an evacuation route is unknown, the County could impose a building
permit delay for a defined period of time (6 to 12 months) to allow an evacuation study to be
completed.
Facilitated Lot Exchange Program
For those vacant lot owners who are not interested in building or installing a 400-800 square foot home,
or for those who face a lengthy wait for a building permit because of the inadequacy of evacuation
Hawai’i County Land Reallocation Toolbox and Strategies
Clarion Associates June 30, 2020 34
routes, the County should consider
facilitating lot exchanges for County owned
lots outside High and Moderate Hazard
Exposure Areas. As noted earlier, the
County regularly obtains ownership or
control of lots through tax defaults, as well
as occasional lot donations. In addition,
some development plans and subdivision
plats have designated some lots for County
ownership or control (for example,
consolidated lots in Hawaiian Paradise Park
intended for future centers). In order to
reduce the potential for future
development in High and Moderate Hazard
Exposure Areas, the County could offer to
exchange some of the lots it controls to
those willing to give up lots in more hazard
prone areas in underserved subdivisions. A
Facilitated Lot Exchange program could
also serve as a source of indirect
compensation to those property owners
who were interested in participating in a
Lot Buyout program, but who did not
qualify or for whom funding for purchase
of the lot was unavailable.
We recommend one limited exception to
the vacant lot strategies outlined above.
Because of the small number of vacant
underserved subdivision lots in Moderate
Hazard Exposure Areas (45 lots), we
recommend those lots be instead subject
to the Mandatory TDR program outlined
below.
2.3.3 Built Lots
Strategies for underserved subdivision lots
in that are already partially or fully
developed but are then damaged in a
hazard event are harder to design, simply because of the emotional attachment that property owners
have to a home that they used to live in – or a home that they still live in but would like to rebuild to
Getting TDR Right Requires
Creating a Seller’s Market
1. Don’t include too many lots in the Sending
Area. If there are too many TDR sellers and
not enough places to use them, prices for
TDRs will remain low. Many potential sellers
will not engage in the market, and those who
do may not feel they received meaningful value in return for their foregone right to
rebuild in the High Hazard Area.
2. Don’t make the Receiving Area too small.
The Receiving Area has to have the capacity
to accommodate the additional density represented by the transferred development
rights. In order to avoid opposition to the
existing Receiving Area residents, this often
means allowing purchased development
rights to only increase future development density by 10-20 percent. A small Receiving
Area will not be able to accept the transfer of
many TDRs.
3. Make sure there is a market in the
Receiving Area. Most importantly, property owners in the Receiving Areas must see the
economic value of purchasing TDRs to meet
market demand. That means that the current
zoning in the Receiving Area must not allow
the intensity of development that is demanded by the market. If builders in the
Receiving Area can collectively meet market
demands without purchasing TDRS, they will
do so. The TDR program must allow the developer to realize more money from the
development after paying for the TDR than
they could have without buying the TDR.
If the market is already strong in the Receiving Areas, the County will need to avoid “up-
zoning” land and instead require the purchase
of TDRs to meet market demand. If demand is
weak, a TDR program will not work unless the
County is willing to “downzone” parts of the Receiving Area so that the purchase of TDRs
will have value.
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pre-disaster conditions. In developing the following strategy we assume a Lot Buyout program was not
available, or if it was available then funding was inadequate to buy the lot.
Primary Strategy: Mandatory Transfer of Development Rights Program
Where homes located in underserved subdivisions in High or Moderate Hazard Exposure Areas have
been destroyed or rendered uninhabitable, the argument for permitting reconstruction of homes is
particularly weak, both because the rebuilt home will have a long useful life, and because extending
future services to the underserved subdivision will likely be expensive. As shown in the matrix above, in
2015 there were about 5,370 developed lots in underserved subdivisions in High and Moderate Hazard
Exposure Areas (although some of those lots may have been damaged by the 2018 event).
When homes in these mapped hazard areas have been destroyed on become uninhabitable, Hawai’i
County should consider prohibiting reconstruction of destroyed or uninhabitable homes and should
instead consider creating a mandatory Transfer of Development Rights program. Owners of those lots
would not be issued building permits to rebuild, but would be issued TDRs that could be sold in defined
Receiving Areas outside of High Hazard Areas where adequate services and emergency access are
available. The TDR serves as a form of indirect compensation to owners who did not benefit from a Lot
Buyout program but for whom a new building permit would perpetuate the number of citizens living in
High Hazard Areas where the County would like to see fewer people at risk. A mandatory TDR is one way
to balance those competing interests.
Designing a workable Transferable Development Rights program is not easy, however, and requires
political will and discipline over time (see the sidebar). Because it is often difficult to identify Receiving
Areas large enough to absorb potential development rights transfers, it is important to limit the number
of potential sellers. Under this strategy, the number of TDRs is probably substantially less than 5,370
because after any one hazard event the majority the homes in underserved subdivision lots in High and
Moderate Hazard Areas are likely to still be habitable. The matrix above shows that there are also 45
vacant lots in underserved subdivisions in Moderate Hazard Exposure areas, and because that small
number is unlikely to undermine the viability of a TDR program, we recommend that these lots be
included in the Mandatory TDR program. If the County is able to identify and zone workable Receiving
Areas to create a successful TDR system at this scale, it might consider expanding the program to other
types of lot owners, but we do not advise including more potential sellers of TDRs at the start of the
program. In particular, we do not recommend extending the program to the almost 23,000 underserved
subdivision lots in High Hazard Exposure areas, because of the unlikelihood that acceptable Receiving
Areas for those lots could be identified.
Fallback Strategy: Development Restrictions and Facilitated Lot Exchanges.
If the County is unwilling or unable to identify or create workable Receiving Areas, we recommend that a
Mandatory TDR program not be created. Instead, we recommend that underserved subdivision lots in
High and Moderate Hazard Exposure areas be subject to the following limitations.
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• Development Restrictions on the size or permanence of habitable structures that can be built,
similar to those applicable to vacant lots in High and Moderate Hazard Areas. If a home is
damaged or destroyed in a future event, similar development restrictions to vacant lots could
then apply.
• Facilitated Lot Exchange opportunities, with priority given to lots in High Hazard Areas. In the
event of two possible exchanges of lots in mapped hazard areas for County owned or controlled
lots in other areas of the County, an exchange to remove potential population in the High
Hazard Area should have priority.
2.3.4 Options for Property Owners
If Hawai’i County implemented the strategies outlined above, property owners in underserved
subdivisions would have the following options.
My lot is vacant My house is in a
High Hazard
Exposure Area
My house is in a
Moderate Hazard
Exposure Area
My house is in an
Other Hazard / No
Hazard Area
I want to
stay on my
property
and live on
it – at least
part of the
time
High Hazard
Exposure Area:
Maximum house
size will be limited
to 600 sq. ft.
If evacuation route
is inadequate,
building permit will
be denied until
adequate access
exists.
Moderate Hazard
Exposure Area –
see below
You may continue
to live on it
until/unless it is
made
uninhabitable by a
hazard event.
If it is damaged and
becomes
uninhabitable -- see
below.
You may continue
to live on it
until/unless it is
made
uninhabitable by a
hazard event.
If it is damaged and
becomes
uninhabitable -- see
below.
You may continue
to live on it
until/unless it is
made
uninhabitable by a
hazard event.
If it is damaged and
becomes
uninhabitable,
maximum
replacement house
size will be limited
to 600 sq. ft.
I am willing
to use my
property for
non-
residential
purposes or
give up my
property if
there are
good
alternatives
You can sell the lot
as part of a Lot
Buyout program (if
one exists) or
exchange it for a
County controlled
lot outside the High
and Moderate
Hazard Area
You can sell the lot
as part of a Lot
Buyout program (if
one exists) or sell a
TDR from the
property to a TDR
buyer in the
Receiving Area
outside of the High
and Moderate
Hazard Areas.
You can sell the lot
as part of a Lot
Buyout program (if
one exists) or sell a
TDR from the
property to a TDR
buyer in the
Receiving Area
outside of the High
and Moderate
Hazard Areas.
You can sell the lot
on the private
market;
No buyout or Lot
Buyout or
Facilitated Lot
Exchange program
applies.
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2.4 Strategies for Other Areas
By definition, lots located outside of underserved subdivisions lower costs and present fewer challenges
to providing public services, so Hawai’i County may assign a somewhat lower priority to discouraging
future development in these areas. Even among these lots, however, there is a large amount of
potential development with significant exposure to different types of hazards. The matrix above shows
that there are about 10,420 lots located in High and Moderate Hazard Exposure areas that are not in
underserved subdivisions. When considering strategies to reallocate development potential away from
these areas the distinction between vacant and built lots is still relevant. Preventing or limiting
development on vacant lots should be a high priority, because each of those lots that is developed
represents an increase (rather than a decrease) of citizens living in mapped hazard areas. In addition,
prevention of new development does not involve the emotional attachment to an existing home that is
present when an existing home becomes uninhabitable due to a hazard event and the owner wants to
rebuild. Finally, when existing homes are destroyed, preventing or limiting redevelopment of those
homes in High Hazard Exposure Areas should have a higher priority than preventing the same types of
redevelopment in Moderate Hazard Exposure Areas, simply because the risks of future loss are higher.
2.4.1 Lot Buyouts
If a future hazard event affects lots outside of underserved subdivisions, and Lot Buyout funds are
available, we recommend that a Lot Buyout program be implemented for built lots in those areas,
because that is the most direct way to ensure that those most directly affected do not redevelop, and
that the number of residents in High and Moderate Hazard Exposure Areas is decreased over time.
However, we do not assume that those funds will be available or will be adequate to purchase all the
lots eligible for purchase. The analysis below assumes that adequate Lot Buyout funds are not available
or are not adequate to purchase all of the damaged built lots.
Our recommended strategy for areas outside of underserved subdivisions references some of the same
tools and approaches described for underserved subdivisions, but applies them in more limited ways to
reflect the lower costs and difficulty of providing services to those who want to live or rebuild in these
areas.
2.4.2 Vacant Lots
The tools used to discourage future development or redevelopment of Vacant lots in underserved
subdivisions should also apply to vacant lots in other areas, with the minor modifications noted below.
• Development Restrictions on the size or permanence of habitable structures that can be built,
similar to those applicable in underserved subdivisions. However, in light of the reduced
challenges to serve development in these areas, the maximum size of permitted structures
might be increased to 800 or 1,000 square feet, Efficiency Dwellings could be installed on more
permanent foundations, and restrictions on future utility extensions and variances and
exceptions for on-site wastewater treatment could be relaxed.
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• Building Permit Denials for lots in High Hazard Exposure Areas with known inadequate
evacuation routes, at least until the availability of an adequate route is shown. Because these
lots are newer and comply with (or come closer to complying with) current subdivision
standards, the County could make this determination based on existing studies, rather than
requiring property owners to complete studies or demonstrate adequate evacuation routes. The
County might also consider applying this requirement to lots in Moderate Hazard Exposure
Areas.
• Facilitated Lot Exchange opportunities for lots in High Hazard Exposure Area, with a lower
priority than exchanges with property owners in underserved subdivisions. In the event of two
possible exchanges of lots in mapped hazard areas for County owned or controlled lots in other
areas of the County, an exchange to remove potential population in the High Hazard Areas in
underserved subdivisions should have priority.
2.4.3 Built Lots
Within the context of this Toolbox and Strategies document, requests to rebuild on already developed
lots High and Moderate Hazard Areas outside of underserved subdivisions require the least change from
current County policies. Challenges are lower than those in underserved subdivisions, and – almost by
definition – access/ evacuation routes are more likely to be safe and adequate, and utility services are
more likely to exist and be less expensive to maintain, than those in underserved subdivisions.
We recommend that where homes in High and Moderate Hazard Exposure Areas have been destroyed
or become uninhabitable, and the lots are not located in underserved subdivisions, those lots not be
included in the mandatory TDR system outlined above. Including those additional 6,300 lots in a TDR
system would double the number of potential number of TDR sellers and would create the additional
challenge of finding or creating much larger workable Receiving Areas. Instead, we recommend that lots
in these areas should be addressed through the following tool:
• Development Restrictions on the size or permanence of habitable structures that can be built,.
In light of the lower challenges presented by development in these areas, the maximum size of
permitted structures might be increased to 800 or 1,000 square feet, Tiny Homes could be
permitted to be installed on more permanent foundations, and restrictions on future utility
extensions and on-site wastewater treatment could be relaxed.
Because they are located outside of underserved subdivisions, the likelihood that these lots have
inadequate and unsafe evacuation routes is lower. However, in areas where existing studies show that
evacuation routes are inadequate to serve the potential population on platted lots, the County should
consider adopting a Denial of Building Permit program as described for vacant lots above.
2.4.3 Options for Property Owners
If Hawai’i County implemented the strategies outlined above, property owners in the High or Moderate
Hazard Exposure Area would have the following options.
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My lot is vacant My house is in a High or Moderate
Hazard Exposure Area
I want to stay on
my property and
live on it – at least
part of the time
Maximum house size will be limited to
800 sq. ft.
If evacuation route is inadequate,
building permit will be denied until
adequate access exists.
You may continue to live on it
until/unless it is made uninhabitable
by a hazard event.
If uninhabitable after a hazard event,
replacement house will be limited to
800 sq. ft.
I am willing to use
my property for
non-residential
purposes or give
up my property if
there are good
alternatives
You can sell the lot as part of a Lot
Buyout program (if one exists) or
exchange it for a County controlled
lot.
You can sell the lot as part of a Lot
Buyout program (if one exists)
2.5 Beneficial Use Determinations and Adjustments
The strategies above are designed to help the County of Hawai’i develop a strategy to significantly
reduce the risks or future development and redevelopment in a variety of hazard areas throughout the
county. They have been calibrated so that stronger and more prescriptive limitations on development
are targeted to those areas where the existing platting, access, and service patterns are the furthest
from what the County would approve today, and where the potential risks of human injury and property
damage are highest. Where they recommend that development or redevelopment on existing platted
lots should not be permitted, they are designed to offer direct compensation (through Lot Buyouts) or
indirect compensation (through Transferrable Development Rights or Facilitated Lot Exchanges), except
in those cases where the County can demonstrate that approving development will create a threat to
public health or safety. Even when those threats can be shown, however, the County may want to offer
some degree of flexibility to lot owners who would otherwise not be permitted to redevelop their
homes or develop their lots. One way to build in that flexibility is through a Beneficial Use Determination
system.
Under a Beneficial Use Determination, a property owner who believes that the strategies above have
deprived him or her of all reasonable economic use of the property in a way that is not justified by
threats to public health and safety caused by the proposed development – and for which compensation
would probably need to be paid by the County -- would have an opportunity to request County review of
those facts before filing a lawsuit for a “regulatory taking”. The applicant would be required to present
evidence related to the economics of the property, often including evidence of the original purchase
price of the lot, the improvements (if any) made to date, any insurance or other settlements already
received due to damage to the house or property, and the potential use of the property for agricultural
purposes. If, after reviewing that evidence, the County believes that strict application of the strategies
above would indeed result in a regulatory taking, the County would have the opportunity to vary the
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terms of those regulations and controls to allow an economic use of the property. Possible forms of
relief might include the right to build a somewhat larger house than permitted by the Development
Restrictions listed above, an exception to connect to utility systems or to use an on-site wastewater
system in spite of the limits otherwise applicable in High Hazard Areas, or to permit access to a lot in a
location where it would not otherwise be permitted. In exceptional cases, the County could also decide
to offer compensation for the development restrictions in order to avoid the time and expense of
litigating a case that it might lose.
2.6 Possible Reductions in Development Potential
This section estimates possible reductions in potential development in the High and Moderate Hazard
within and outside of underserved subdivisions assuming that the County of Hawai’i adopts and
implements the above strategies carefully and consistently over time. This task is difficult, for several
reasons.
1. Effectiveness of Lot Buyout Program
It is difficult to know what portion of the built lots that are damaged or destroyed through a
hazard event will be removed from the totals through a Lot Buyout program, because that is
completely dependent on the amount of funding available for Lot Buyouts. While the amount of
Recovery funding for Lot Buyouts after the 2018 Kilauea eruption may soon be known, the
amount of funding that may or may not be available for Lot Buyouts after future hazard events
cannot be known before those events occur. Each lot that is purchased through a Lot Buyout
program, and from which development rights are removed, represents one less lot in that risk
category that may be developed in the future. For purposes of these estimates, we assume that
Lot Buyouts after an event reduce the number of built lots by 10%. Since a hazard event is just
as likely to occur within or outside an underserved subdivision, we take the same assumption
for both types of lots. We assume that Lot Buyouts do not reduce the number of vacant lots in
either High Hazard or Moderate Hazard Areas, because of limited funding and likely priority
given to built lots in those areas.
2. Impact of Permitting Requirements for Evacuation and Public Safety
It is difficult to know how many of the existing vacant lots have inadequate evacuation routes or
will fail to meet additional permitting requirements that would require the County to apply a
Denial of Building Permit program until such time as those standards are met. Because of the
very large number of vacant lots in underserved subdivisions in Hawai’i County, because
inadequate roads is one of the factors that can lead to designation as an underserved
subdivision, and because a significant number of lots have site conditions in which construction
of a dwelling would create public safety hazards, it is likely that a significant percentage of the
current vacant lots in underserved subdivisions will not be developed. After discussions with
County staff and other consultants, we estimate that between 20 and 30 percent of
underserved subdivision lots in hazard areas and between 10 and 13 percent of other hazard
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areas will have inadequate evacuation routes or otherwise fail to meet additional permitting
requirements related to public safety.
3. Success of Mandatory TDR System
As noted in the Toolbox above, it is difficult to design an effective TDR system. For that reason,
we recommended that the TDR system have limited applicability -- i.e. built lots in underserved
subdivisions in High and Moderate Hazard Areas that are destroyed or rendered uninhabitable
by a hazard event, plus the small number (45) of vacant lots in Moderate Hazard Exposure
Areas. We assume that each hazard event destroys or makes uninhabitable 10 percent of the
built lots in the High Hazard Exposure Areas. That reduces the number of TDRs for sale at any
one time and the difficult of designing a Receiving Areas adequate to absorb those transferred
development rights. Because of the likely small volume of TDRS to be transferred after each
hazard event, and assuming the County designates an adequate Receiving Area in which
developers need to acquire TDRs to meet the intensities of development supported by the
market, and assuming the County does not permit rebuilding of the damaged homes in these
categories, we assume that almost all of the potential TDRs available after each hazard event
will be successfully transferred.
4. Response to Strict Development Restrictions
It is difficult to estimate how property owners will respond to development restriction that limit
future development of vacant lots in High and Moderate Hazard Areas to Efficiency Dwellings
without utility connections and in light of a County Low Exposure/Limited Investment policy.
However, if strict versions of the recommended strategies are adopted and enforced (e.g.
maximum house sizes at the low end of the ranges discussed above, very rare approvals of
discretionary variances, and additional permitting requirements) it is likely that these changes
will lead many property owners to decided not to pursue development on their property and
instead use it for passive or recreational purposes. After consultation with County staff and
other consultants, we estimate that approximately two-thirds of vacant lot owners will decide
not to pursue home construction or installation under these circumstances, or will instead
decide to explore other options such as participation in the Facilitated Lot Exchange program.
5. Effectiveness of Facilitated Lot Exchange Program
The effectiveness of a Facilitated Lot Exchange program depends heavily on the supply of
County controlled lots available for exchange, the number of those lots located outside of the
High Hazard and Moderate Hazard areas, and the desirability of those lots in terms of location,
access, and available services. Although there are over 5,000 tax delinquent lots in the County,
it is not clear how many of them are located in safe locations that make them attractive
prospects in a proposed exchange for a hazard prone lot. For purposes of these estimates, we
assume that roughly one-third of the 5,000 lots would be good candidates for exchange.
However, those 1,650 lots represent only seven percent of the vacant lots that would eligible to
participate in the lot exchange program under the strategies described above. Because of
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potentially high demand for this program and limited supply of County controlled lots, we
assume that virtually all available lots will be exchanged, reducing the total of the eligible lots in
High and Moderate Hazard areas by seven percent.
In light of these important sources of uncertainty, any estimate of reductions of potential development
in the High Hazard and Moderate Hazard Areas under the strategies outlined above will be approximate
at best. The table below applies the assumptions above to the number of lots in each risk and
development category to make those approximations.
The County’s Low Exposure/Limited Investment policy is not listed as a separate source of lot
reductions, because it operates to reinforce the other listed tools. Building permit moratoria are not
included in the table because they are not a means of permanently reducing development potential in
any of these areas.
2.7 Implementation Requirements
This section of the document identifies the need for additional legislation, completion of a supporting
study, or establishment of a new County program (with possible staffing implications) for each of the
land reallocation tools used in the High Hazard and Moderate Hazard Strategies described above. The
table summarizes general requirements in each of these areas, but different or additional requirements
may apply depending on how these tools are combined in the different strategies.
Implementation
Requirements Additional Legislation? Supporting Study?
New County
Program/
Staffing? Tools
Development
Restrictions
Implemented through existing zoning
and subdivision powers Not required No
Lot Buyout
Program
Implemented through existing powers of
acquisition for a public purpose Not required Yes
PROPOSED STRATEGIES
Subdivision/Lot Status
Level of Hazard Exposure
Built Status Vacant Built Vacant Built Vacant Built Vacant Built Vacant Built
Number of Lots 22,659 5,290 45 78 25,045 11,869 3,375 3,207 659 3,179
Lot Buyouts
(with PDR Option)10%10%10%10%
Development Restrictions 50-65%50-65%25-30%60%30%
Transfer of Development Rights 10%10%10%
Facilitated Lot Exchange for
Public Lots 7%7%7%7%
Building Permit Denial for
Inadequate Evacuation or
Public Safety Concerns
20-30%20%10-15%10%
TOTAL REDUCTION 100%20%100%20%27%0%79%10%47%10%
High Moderate Low/No High Moderate
Underserved Subdivision Other Areas
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Implementation
Requirements Additional Legislation? Supporting Study?
New County
Program/
Staffing? Tools
Transfer of
Development
Rights
Local ordinance to implement H.R.S. 46-
163 required; Amendment to existing
zoning in Receiving Areas may be
required
Evaluation of Proposed
Sending and Receiving Areas
Required
Yes
Lot Exchange
Program
Implemented through existing powers of
acquisition for a public purpose
Amendment of state law allowing
retention of tax default lots may be
required
Appraisals of exchange
parcels may be required Yes
Building Permit
Denial for
Inadequate
Evacuation
Routes
Generally supported by zoning and
subdivision regulations but application
to already approved subdivisions may
require legislation
Evacuation route adequacy
studies required No
Building Permit
Moratoria for
Program Design
Generally supported by case law Not required No
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Appendix A: Past Studies and Strategies Considered by Hawaii County
HOVE memo (PBR Kau CDP)
Strategies considered:
• Establishing a defensible “build-out” cap based on evacuation clearance rates, traffic mitigation,
and/or desired growth patterns. This is only possible on a regional basis as a means to manage
proposed new development.
• Down-zoning and other tools for “vacating” lots. This is politically and legally impractical.
• Condemnation and other tools for acquiring land and development rights. This is prohibitively
expensive, takes control out of local hands, and is impractical on a large scale.
COH Subdivision Briefing Paper (COH 2016)
Strategies considered:
• Transfer of Development Rights
• Urban Redevelopment Act
COH Development Pattern Adjust (COH 2017)
Strategies considered:
• “Retire” unbuilt tax delinquent properties
• PDR (purchase development rights) of unbuilt lots, with a focus on absentee owners and those
lots that are the most expensive to service and the least expensive to buy
• TDR (transfer development rights) of unbuilt lots, with a focus on transfers from subdivisions to
nearby existing town/village centers, perhaps associated with a TDR density bonus.
• Building permit rationing in substandard subdivisions, particularly in high hazard areas
• Proactive development of existing and new town/village centers
Resettlement Options and Tools Briefing Paper (COH May 2018)
Strategies considered:
• Acquisition of the Land or Property Rights
• Adverse Possession
• Transfer of Development Rights (TDR)
• Land Pooling (clustering)
• Land Bank
• Redevelopment Authority
• Land Exchanges
• Building Permit Moratoria
• Building Permit Quotas
• Rate of Growth Ordinance
• Concurrency Requirements for Access and Services
• Amortization of Nonconforming Use
Select Draft General Plan strategies (COH 2019)
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Draft strategies considered:
• Feasibility study of hazard mitigation strategies
• Land acquisition program
• Retention/retirement of tax delinquent lots
• Building envelope regulation for lots designated as Productive Agricultural Land
• Public trust for priority lands that achieve community objectives
• Alternatives treatment for Special Management Area Major Permits along coastline
• Rural Cluster Development regulations and incentives
• County-side Transfer of Development Rights program
• Facilitated lot consolidation
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Appendix B: Map of High Hazard and Moderate Hazard Areas
For purposes of this Tools and Strategies document, High Hazard Areas include Volcanic Risk Areas 1 and 2 and areas of historic lava flow, and
Moderate Hazard Areas include mapped areas of coastal hazard risk.
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Appendix C: “Strategy Zone” Maps
These maps depict locations throughout the island that will be impacted by implementation of the development reallocation strategies.
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Appendix D: Strategy Implementation Decision Trees
The figures below are decision trees for each of the main land use categories discussed in this report: Underserved High Hazard Areas,
Underserved Moderate Hazard Areas, Underserved Low/No Hazard Areas; Other High Hazard Locations and Other Moderate Hazard Locations.
The decision tree for each classification shows the recommended reallocation strategies associated with that category of land.
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References
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Purchase of Development Rights: Preserving Farmland and Open Space, August 2012. Accessed
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The Quiet, Massive Rezoning of New York, February 2014. Accessed 03/23/20.
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Maryland’s Transfer of Development Rights Programs, November 2010. Accessed 3/26/20.
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