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HomeMy WebLinkAboutSession06_Exploring Transfer of Development Rights for Managed Retreat in Hawaiʻi•Melissa May, AICP, Associate, SSFM•Makena Coffman, PhD, Director, UHM Institute of Sustainability & Resilience•Alexander Yee, AICP, Coastal and Water Program Manager, City and County of Honolulu, Office of Climate Change, Sustainability & Resilience •Kaʻāina Hull, Planning Director, County of Kauai Exploring Transfer of Development Rights for Managed Retreat in Hawaiʻi Goals of Today’s Session Source: Brian Garrity, Unsplash Learn about… •How transfer of development rights (TDR) works and can be used •Research findings on market outcomes of potential TDR programs for managed retreat on Oʻahu •Draft TDR legislation for Kaua‘i •Considerations for implementation of TDR in urban, rural, and other unique contexts •Navigating the political context for passing TDR legislation Transfer of Development Rights (TDR)•Marked-based mechanism that transfers development from “sending areas” to “receiving areas” in a way that would not be possible under existing zoning regulations (Pruetz, 2003) •Property owners sell development rights to a developer, who uses them to exceed baseline zoning in receiving area (e.g. exceeding floor area ratio) •Sending area properties conserved with conservation Source: Wikipedia, Idawriter Source: Wikipedia, La Citta Vita Transfer of Development Rights (TDR)TDR has been used for… •Historic preservation •Penn Central Station, NYC •Preserving agricultural land •King County, WA •Protecting environmental resources •Lake Tahoe, CA •Greenhouse gas mitigation and sequestration •Miami-Dade County, FL •Climate adaptation •Ocean City, MD Source: Wikimedia, Danazar, CC BY-SA 4.0 Source: World Atlas Transfer of Development Rights (TDR) (Hou et al., Transfer of Development Rights (TDR) (Madison-Morgan Conservancy, Role of Other Agencies The goals of a TDR program can be aided by… •TDR Bank •Conservancy •Redevelopment agencies •Other agencies and organizations Other agencies can assist in educating landowners, purchasing and retiring development rights, and/or facilitating transactions. Source: WorldAtlas TDR Proposed for Managed Retreat (EPA, 2017)(Pruetz, 2020)(Georgetown Climate Center, n.d.) (California Coastal Commission, 2018) Makena Coffman, Director, Institute for Sustainability and Resilience Research Team: Alice McLean, MURP Kimberly Burnett, Associate Director, UHERO Justin Tyndall, Assistant Professor, UHERO & Economics Christopher Wada, Researcher, UHERO Kaila Ronquillo, Undergraduate Researcher, UHERO Economic Considerations for TDR as a Tool for Coastal Managed Retreat A Case Study for Oʻahu Need for SLR Response in Hawaiʻi Photo credit: Honolulu Star-Advertiser Photo credit: Hiroko Kazama Photo credit: Ronen Zilberman/Civil Beat Research Questions How might a TDR program work on Oʻahu to facilitate managed retreat from vulnerable coastal areas expected to be adversely impacted by SLR? Would TDR be economically feasible in a hypothetical pilot project focused on the North Shore of Oʻahu? Using the same North Shore sending area, would TDR be economically feasible in a hypothetical pilot project with a Honolulu-focused receiving area? Background TDR Success Factors (Pruetz & Standridge, 2008) Importance Factor Essential Demand (willingness to pay) for bonus development Customized receiving areas Important Strict sending area regulations Few alternatives to TDR Market incentives Helpful Certainty of TDR Use Strong public preservation support Simplicity Promotion and facilitation TDR bank Considerations for TDR in SLR Response -Many TDR programs fail because developers can achieve their desired density for free (Pruetz & Standridge, 2008) -TDR programs have not been widely adopted in coastal areas to fund retreat, in part because of the high cost of coastal real estate compared with inland properties (Williams, 2014; Robb et al., 2020) -“Hybrid” TDR programs from the 2000s onwards often allowed receiving areas in urban fringe, or even rural locations, as a concession to real estate market dynamics and attempt to improve program outcomes (Linkous & Chapin, 2014) Photo credit: Rickymar Photography O‘ahu Market Illustrations Sending and Receiving Areas Sending Area Data (Han et al., 2023; retreat framework adapted from Griggs & Reguero, 2021) Parcels in Paumalū ahupuaʻa -Parcels in SLR-XA 3.2 ft. -Data collected and analyzed by ISR research lab, updated with 2023 assessorʻs data Area Land and Dwelling Value ($2023) Dwelling Units SLR-XA $250,321,800 97 NS Receiving Area Selection & Data Land use concepts from Waialua Town Master Plan (2005) -Adding more residential development would connect existing residential areas, satisfy a growing need for new housing in Waialua, and broaden the economic base of the town center (DPP, 2005, p. 5-4) NS Receiving Area Concepts & Parcels Land Use Concept New Residential Units Number of Parcels Acres Land Value Building Value Demo Costs Total Acquisition/Demo Costs Community Residential Infill Concept 200 3 53.546 $2,256,630 $426,400 $6,330 $2,689,360 Expanded Community Residential Concept 325 9 132.145 $7,806,230 $426,400 $6,330 $8,238,960 Expanded Community Residential with Lodge 450 9 183.549 $9,397,200 $2,441,000 $550,710 $12,388,910 Note: Calculated using ArcGIS Pro, 2023 City & County of Honolulu assessor’s data and RSMeans Online construction estimates. Honolulu Receiving Area Selection & Data Makiki/McCully-Mōili‘ili area -Outside of existing TOD areas and identified for additional residential housing within the PUC Development Plan -1,000-2,500 new units within Makiki -500-750 new units within McCully- Mōili‘ili Makiki/McCully-Mōili‘ili Receiving Area -Identify 3,116 local parcels -Assign current legal FAR to every parcel -Assign current built FAR to every parcel (assessment data) -Calculate the amount of unused FAR -Determine whether FAR is a scarce resource 04 Findings & Conclusion NS Receiving Area Findings Receiving Area Concept TDR Credit Price Ratio Total Dev Cost Total Dev Cost Per Unit ROI Net Unit Change Community Residential Infill $1,251,609 2.06 $301,263,297 $1,506,316 -30.29%103 Expanded Community Residential $770,221 3.35 $333,032,982 $1,024,717 2.47%228 Expanded Community Residential with Lodge $556,271 4.64 $363,403,016 $807,562 30.02%353 Makiki/McCully-Mōili‘ili Receiving Area -85% of 3,100 parcels have unused FAR -Total unused FAR: ~26 million square feet -Could build ~20,000 new housing units under current FAR -FAR is not scarce -However, developers cannot easily use this FAR for many reasons -Relevant to this study, perhaps because it is spread across many parcels *Graph omits areas zoned FAR 10 Makiki/McCully-Mōili‘ili Receiving Area -There are 32 parcels that currently have more than 100,000 square feet of unused FAR each (after excluding 28 that are ”public” in use) Unused Square Footage Under Current FAR, excluding public/quasi-public uses Market Illustration – Existing Site with Hypothetical Apartment Buildings 89,000 sq ft parcel zoned for mixed use, 150 units (undeveloped) Receiving Area TDR Credit Price Ratio Total Dev Cost Total Dev Cost Per Unit ROI Net Unit Change Baseline: 150- Unit Mid-Rise Under Current Zoning --$70,793,800 $471,959 58.91%- TDR: 400-Unit High-Rise $1,026,487 2.58 $438,415,600 $1,096,039 -31.57%303 TDR: 800-Unit High-Rise $394,803 6.70 $631,415,600 $789,270 -4.98%703 TDR: 37 400-Unit High-Rises $27,743 95.36 $6,982,992,400 $471,824 58.96%14,703 Key Findings -TDR has potential to facilitate managed retreat; however, under limited market conditions -The two receiving area illustrations demonstrate that TDR will best function when re-zoning (i.e. up-zoning) is included; however, greenfield development is often undesirable for other land use and environmental considerations -TDR will be difficult to use for the purpose of infill development Photo credit: Darryl Oumi, special to Honolulu Star-Advertiser Discussion -To preserve sandy beaches and minimize risks to public safety, managed retreat should be done in a proactive, coordinated manner; a voluntary TDR program would likely result in patchwork of retreated and unretreated properties -Other factors besides density/zoning constrict housing development. E.g.: -Infrastructure -Piecemeal lots -Permit delays -If no private use is desired, consider other mechanisms like land acquisition for managed retreat Exploring TDR for Managed Retreat on O‘ahu Alexander Yee, AICP, Coastal and Water Program Manager, City and County of Honolulu, Office of Climate Change, Sustainability & Resilience City Goals for Studying TDR•Facilitate managed retreat •Minimize regulatory takings liability •Leverage private capital •Understand local conditions relevant to feasibility: •Development in the SLR-XA •Local housing market •Existing land use vs. allowed by zoning TDR Study Takeaways •Market illustrations –illustrative but not necesarily representative. •Few examples of TDR used to redirect development out of vulnerable beachfront areas. •As a whole, additional FAR is currently easy to come by, whether by existing zoning or incentives (e.g. TOD, 201H). •Demand for TDR may be held back by the same factors that prevent additional development under current zoning: infrastructure, assembling parcels, approval timeline and uncertainty. Future Research Areas •Demand for additional FAR by TDR would need to be “by design.” •Better defining receiving areas based on: •Zoning district Makiki-McCully-Mōʻiliʻili Receiving Area: Unused FAR by Zoning District. Identify “slack” within zoning district within Community Plan Areas. Consider restricting transfers within Community Plan Areas. Community Plan update process could allow community participation on sending/receiving areas. Future Research Areas •Demand for additional FAR by TDR would need to be “by design.” •Better defining receiving areas based on: •Zoning district •Community Plan Area Future Research Areas •Demand for additional FAR by TDR would need to be “by design.” •Better defining receiving areas based on: •Zoning district •Community Plan Area •Availability of infrastructure (ex. Sewer) Identify sites with/without infrastructure constraints (ex. Purple = sewer mains) Thinking Outside the Box •Alternatives to DR as an FAR Bonus •Retention of nonconforming FAR/height •Fast-tracking/streamlining/other process-related perk •Exclusive use/second currency Makiki-McCully-Mōʻiliʻili Receiving Area Currently Available FAR. Each x represents one parcel of land End of the Line for TDR? •No. But... •TDR will need to be narrowly tailored to specific need/conditions •One of many tools in the SLR adaptation toolbox, alongside regulatory, buyouts, leasebacks, life estates, land trusts, etc. •May look different than TDR programs have in the past. •Not interested in looking at Ag land as receiving areas on Oʻahu. Exploring TDR for Managed Retreat on Kaua‘i Kaʻāina Hull, Planning Director, County of Kauai Kaua‘i Shoreline Viewer Questions? Group Activity Group Activity •This game demonstrates transactions between property owners and developers in a voluntary TDR program. •Landowners in the “sending area” sever the development rights from their properties and sell them to willing buyers (developers), who use them to develop in the “receiving area.” •Once the development rights are transferred, sending area Source: Oregon Dept. of Land Conservation and Development Group Activity •Players with houses and title deed cards are property owners. •Development right price is listed next to “Houses cost” on title deed card. •Players with money are developers. Facilitators are city workers Group Activity Walk around the room and find someone to transact with: 1.Developers, pay the property owner for their house(s) for the price listed on their title deed card. 2.Property owners, give your house(s) to the developer in return. Then raise your hand for a “city worker” to record the conservation easement on your title deed card with a dot sticker. 3.Developers, place your new house(s) in the “receiving area” game board to complete your development. Mahalo!