HomeMy WebLinkAbout2024 Keyser Marston Associates - Analysis & Recommendations in Support of Updates to Chapter 11 HCC
DRAFT
ANALYSIS AND RECOMENDATIONS
in Support of Updates to
CHAPTER 11 OF THE HAWAI’I COUNTY CODE
Prepared for:
County of Hawai’i
Prepared by:
Keyser Marston Associates, Inc.
March 2024
TABLE OF CONTENTS
1.0 EXECUTIVE SUMMARY AND RECOMENDATIONS .......................................................... 1
1.1 Summary of Findings ...................................................................................................... 1
1.2 Recommendations for Updates to Chapter 11 ................................................................ 2
2.0 INTRODUCTION AND SUMMARY OF FINDINGS ............................................................. 9
2.1 Household Income Categories ....................................................................................... 9
2.2 Overview of Existing Chapter 11 Requirements .............................................................10
2.3 Need for Affordable Housing in Hawai’i County .............................................................11
2.4 Financial Feasibility Analysis .........................................................................................12
2.5 Review of Excess Credit System ...................................................................................15
2.6 Requirements for Other Counties ..................................................................................16
2.7 Incentives ......................................................................................................................16
2.8 Report Organization ......................................................................................................17
3.0 AFFORDABLE HOUSING REQUIREMENTS – OTHER COUNTIES .................................18
3.1 Maui County ..................................................................................................................20
3.2 Kaua’i County ................................................................................................................22
3.3 Honolulu City and County ..............................................................................................23
3.4 Lessons Learned From Other Counties .........................................................................25
4.0 DEVELOPER STAKEHOLDER INTERVIEWS ...................................................................26
5.0 EFFECTIVENSS OF EXCESS CREDIT SYSTEM ..............................................................29
5.1 Excess Credit Balance ..................................................................................................29
5.2 Pricing of credits ............................................................................................................29
5.3 Geographic Area Restriction ..........................................................................................30
5.4 Effectiveness of Excess Credit System..........................................................................30
6.0 FINANCIAL FEASIBILITY ANALYSIS ...............................................................................32
6.1 Context and Limitations of Feasibility Analysis ..............................................................32
6.2 Residential Market Overview .........................................................................................33
6.3 Residential Development Prototypes .............................................................................36
6.4 Estimated Market Rate Home Prices .............................................................................38
6.5 Estimated Market Rate Rents ........................................................................................41
6.6 Affordability of Market Rate Prototypes ..........................................................................42
6.7 Financial Feasibility Analysis Approach .........................................................................42
6.8 Development Cost Estimates ........................................................................................43
6.9 Sales Revenue and Supported Rental Unit Values ........................................................44
6.10 Residential Land Sales ...............................................................................................44
6.11 Feasibility Conclusions ...............................................................................................45
6.12 Cost to Comply With Affordable Housing Requirements Under Each Scenario ...........48
6.13 Economics of Increased Density .................................................................................51
7.0 INCENTIVE-BASED APPROACHES .................................................................................53
7.1 Incentives Provided Through Inclusionary Programs .....................................................53
7.2 Density Bonus ...............................................................................................................54
7.3 Flexible Development Standards ...................................................................................57
7.4 Reduced Parking Requirements ....................................................................................58
7.5 Expedited Approvals ......................................................................................................59
7.6 By-Right Development ...................................................................................................60
7.7 Development Fee Waivers ............................................................................................61
7.8 Property Tax Abatements or Exemptions ......................................................................61
List of Tables
Table 1-1. In-Lieu Fee Ranges Based on Feasibility Findings ....................................................................................... 4
Table 1-2. In-Lieu Fees Using Gap-Based Approach .................................................................................................... 4
Table 2-1: 2023 Income Limits for Hawai’i County ....................................................................................................... 10
Table 2-2: Schedule of Affordable Housing Credits Per Unit, Chapter 11.................................................................... 10
Table 2-3: Maximum Percentage of Affordable Units by Affordability Level, Chapter 11 ............................................. 11
Table 2-4. Hawai’i County Housing Need by Income Category, 2020-2025 ................................................................ 11
Table 2-5. Existing Housing Stock and Vacancy.......................................................................................................... 12
Table 2-6: Summary of Prototypes and Submarkets Evaluated .................................................................................. 13
Table 2-7. Summary of Feasibility Scenario Testing .................................................................................................... 14
Table 3-1: Comparison of Affordable / Workforce Housing Requirements................................................................... 18
Table 5-1: Excess Credit Summary ............................................................................................................................. 29
Table 5-2. Excess Credit Pricing .................................................................................................................................. 30
Table 6-1. Percent of New Units Permitted by Location, 2012-2021 ........................................................................... 34
Table 6-2. Median Single Family Home Prices ............................................................................................................ 35
Table 6-3. Market Rate Prototypes .............................................................................................................................. 37
Table 6-4. Market Rate Projects Reviewed .................................................................................................................. 38
Table 6-5. For-Sale Prototype Price Estimates ........................................................................................................... 40
Table 6-6. Prototype Rent Estimates ........................................................................................................................... 42
Table 6-7 Feasibility Analysis Summary, Base Case with Existing Chapter 11 and Use of Purchased Credits .......... 46
Table 6-8. Scenarios Evaluated ................................................................................................................................... 46
Table 6-9. Summary of Feasibility Scenario Testing .................................................................................................... 47
Table 6-10. Net Cost of Compliance with Affordable Housing Requirements (1) .......................................................... 49
Table 6-11. Net Cost Per On-Site Affordable Unit........................................................................................................ 50
Table 6-12. On-Site Affordability Percentages Equivalent in Cost to Recommended In-Lieu Fee Ranges ................. 51
Table 7-1. Density Bonus Scale, California Density Bonus Law, Selected Levels ...................................................... 55
APPENDIX A: PRO FORMA TABLES
APPENDIX B: RESIDENTIAL MARKET DATA
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1.0 EXECUTIVE SUMMARY AND RECOMENDATIONS
This report provides analysis and recommendations to support potential updates to Hawai’i
County’s Affordable Housing ordinance established in Chapter 11 of the Hawai’i County Code
(“Chapter 11”). Chapter 11 requires affordable housing be provided as part of new residential
developments where property is rezoned to create five or more residential units or lots and
rezonings for resorts, hotels and industrial uses that add more than 100 full time equivalent jobs.
The report was prepared by Keyser Marston Associates, Inc. (“KMA”) for the County of Hawai’i
(“County”).
1.1 Summary of Findings
The analysis presented herein evaluates the financial feasibility of representative market rate
residential developments in a range of locations on Hawai’i Island and their ability to sustain
existing and modified affordable housing requirements.
Residential developments in Kona and Kohala were found to be feasible assuming use of the
existing option under Chapter 11 to purchase excess credits or at a range of fee levels under a
potential in-lieu fee option. Mandating on-site production of affordable units was found to
adversely affect project feasibility with existing on-site requirements.
Residential developments in Hilo, Puna and Hamakua have constrained or challenged
feasibility. New market rate units in these areas are also priced within or near to the income
ranges Chapter 11 is targeting (up to 140% of Area Median Income). Despite more constrained
feasibility, permitting data shows construction of new homes is occurring in these communities,
primarily individual homes and smaller scale projects made possible by a supply of existing lots.
The feasibility analysis was prepared in fall 2022 and reflects market conditions as of that time.
Subsequent escalation in costs, increases in interest rates, and softening prices are likely to
have adversely affected feasibility relative to results presented herein. Conditions will continue
to evolve going forward. In interpreting results, it is useful to keep in mind that policies may be in
place for a number of years through both strong and weaker cycles in the housing market, and
that projects will move forward when market conditions support it, and it is at that point when
projects will be required to satisfy the requirements of Chapter 11.
Like all inclusionary policies, Chapter 11 depends on market rate housing development for its
success and will only create affordable housing if it does not create a barrier to market rate
housing. While projects on the Big Island are challenged by high costs and other factors, and
rising interest rates have put downward pressure on prices, Chapter 11 in its current form is not
a primary driver of feasibility constraints. Feasibility findings for all project types evaluated are
similar with or without existing Chapter 11 requirements.
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Chapter 11’s ability to ensure new developments address housing needs for a broad spectrum
of incomes has been inhibited by the excess credit feature of the ordinance. Projects that
produce more affordable housing than required may sell credits to another party for use in
meeting the Chapter 11 affordable housing requirements of a separate project. State law also
requires the award of credits for projects sponsored by the Department of Hawaiian Home
Lands (DHHL). In theory, the system of credits seems like a promising and flexible policy
approach; however, the experiment with excess credits on the Big Island does not show
evidence of a strong link between successful completion of affordable units and their ability to
earn excess credits. Affordable developers primarily rely on State and Federal subsidy sources
as well as debt financing for their projects, and generally have not been able to leverage excess
credits as a source of financing for affordable housing development. Most excess credits earned
over the past two decades remain unused, resulting in a glut of approximately 1,300 unused
credits. This large, accrued balance of credits has the potential to offset future production of
affordable housing under Chapter 11 for years to come.
See Section 2 for a full summary of findings.
1.2 Recommendations for Updates to Chapter 11
Following are KMA’s recommendations for updates to Chapter 11 based on the findings of the
analysis and our experience with other programs:
(1) Phase out, eliminate, or restrict use of excess credits. The existing excess credit
system is not working as an effective tool to deliver affordable units and should be
modified or phased out. Affordable projects have not been able to use credits to secure
debt or equity financing. Affordable developers say credits do not induce the
construction of affordable units and that they would build affordable units using other
State and Federal subsidy sources regardless of the ability to earn credits. Development
projects using excess credits to meet the requirement of Chapter 11 do not create
inclusive communities with a mix of market rate and affordable housing intended by
Chapter 11. Developers choose the excess credit option because the cost is less.
However, requiring developers to purchase excess credits adds cost to projects without
a clear benefit or link to affordable housing production. Funds from purchase of credits
go to private parties or corporate entities that own credits and have no obligation to
reinvest the funds in local affordable housing projects. If the system remains in place in
its current form, it is likely to impair effectiveness of Chapter 11 going forward.
The following is one potential approach to phasing out use of credits going forward.
Legal review and coordination with the Department of Hawaiian Home Lands (DHHL)
are required to refine the approach.
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a. Cease granting new excess credits, except where mandated by State law (e.g.
DHHL projects).
b. Apply a proration factor to the value of excess credits that are redeemed five or
more years from the date of the affordable housing agreement generating the
excess credits. Proration could be based on the portion of the original 20-year
required affordability term remaining. As an example, credits generated by an
affordable development built ten years prior to redemption would be prorated by
a factor of 50%, representing the portion of the original 20-year required
affordability term remaining. Even in cases where the affordability term is longer,
20 years could still be the basis for proration since this is the affordability term
required by Chapter 11 for rental projects, which generated most excess credits.
DHHL credits could be excluded from this proration, if necessary.
(2) Add an In-Lieu Fee Alternative – Consider adding an in-lieu fee option, as is available
in Maui and Kaua’i. Excess credits have provided a feasible option for market rate
projects to meet their affordable housing requirement. Mandating on-site units was found
to impair feasibility outside of the Kohala resorts. When inclusionary programs set
requirements beyond a level that projects can feasibly bear, market rate housing
production can decline. For example, Kauai and Maui, which set stringent initial
inclusionary requirements of 30% and 33%, respectively, demonstrated very limited
market rate housing production under those requirements. Assuming excess credits are
phased out as an option under Chapter 11, there is a need for another alternative to
avoid adverse effects on feasibility. Funds from a new in-lieu fee could be dedicated to
assisting local affordable housing projects, leveraging federal and state resources to
create affordable housing. There are a variety of ways to structure a potential in-lieu fee.
Three potential approaches are described below, including setting fees based on
feasibility results, setting fees as a percentage of the affordability gap, and setting fees
as a percent of sales price.
a. In-Lieu Fees Based on Feasibility Results
Table 1-1 identifies potential in-lieu fee ranges identified based on the feasibility analysis
results. In Kona and portions of Kohala including Waikoloa, Waimea, and Kawaihae, that
are outside of the coastal resorts, a rate of $5 to $10 per square foot is identified, which
is similar to the cost associated with the purchase of excess credits. In the resort areas
along the Kohala coast, an in-lieu fee of $15 to $25 per square foot is suggested, given
stronger feasibility results in these areas. In Hilo, Puna, Hamakua, and Ka’u, initial rates
between zero and $5 per square foot are suggested based on feasibility constraints for
market rate units in these areas, and the fact prices and rents are within or near the
income ranges Chapter 11 serves.
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Table 1-1. In-Lieu Fee Ranges Based on Feasibility Findings
Location
In-Lieu Fee Per Net Livable Square Foot
of Residential Uses in the Entire Project*
Kona and Kohala, outside of resorts $5 to $10
Kohala, oceanfront resorts $15 to $25
Hilo, Puna, Hamakua, Ka’u $0 to $5
*Net livable square feet excludes garages, porches, decks, lanai’s, common hallways, community rooms and amenities. Rates apply
to the entire project, not just the square footage of required affordable units.
b. Gap-Based Approach to Setting In-Lieu Fees
Table 1-2 identifies potential in-lieu fees based on a percentage of the gap between
market and affordable prices. Gaps are based on on-site for-sale affordable units within
the same development as the market rate units. Gaps would be less to the extent
affordable units are provided in a standalone affordable rental development leveraging
other funding sources. Gaps are not calculated for rentals; however, the same in-lieu fee
rates could be applied. Due to feasibility constraints, it is recommended that in-lieu fees
be limited to no more than 20% to 30% of the calculated gaps (highlighted in green).
Where there is a higher gap between market and affordable prices, the calculations in
Table 1-2 yield a higher in-lieu fee. If desired, separate results for condo and single
family could be blended, with just one rate applied to both, or single family results could
be used since single family units have been more common.
Table 1-2. In-Lieu Fees Using Gap-Based Approach
Market Rate Project Example
Living Area (sq.ft.) Market Price
Affordable Price (80% AMI)
Gap Per Affordable Unit (1) Calculated In-Lieu Fees Per Square Foot(2), as Percentage of Gap (3) 100% 50% 30% 20% 10%
Kailua Kona Single Family, Larger 2,300 $1,541,000 $362,850 $1,178,150 $51 $26 $15 $10 $5 Kailua Kona Single Family, Smaller 1,500 $1,050,000 $348,800 $701,200 $47 $23 $14 $9 $5 Attached Condo 1,200 $720,000 $314,200 $405,800 $34 $17 $10 $7 $3 Single Family (Kohala Resort) 2,400 $3,120,000 $376,900 $2,743,100 $114 $57 $34 $23 $11 Attached Condo (Kohala Resort) 1,400 $1,470,000 $322,850 $1,147,150 $82 $41 $25 $16 $8 Waikoloa Single Family 1,700 $1,050,000 $348,800 $701,200 $41 $21 $12 $8 $4 Waimea Single Family 1,750 $1,000,000 $362,850 $637,150 $36 $18 $11 $7 $4 Hilo Single Family 1,700 $725,000 $352,313 $372,688 $22 $11 $7 $4 $2 Puna Single Family 1,200 $390,000 $348,800 $41,200 $3 $2 $1 $1 $0 Hamakua Single Family 1,500 $630,000 $348,800 $281,200 $19 $9 $6 $4 $2
(1) Calculated as the difference between market rate and affordable price. (2) Net livable square feet excludes garages, porches, decks, lanai’s, common hallways, community rooms and amenities. Rates apply to the
entire project, not just the square footage of required affordable units.
(3) Calculated as the gap per affordable unit multiplied by 10% effective affordable unit requirement when units are provided at 80% AMI, divided by the square footage of the unit, multiplied by the percentage of the gap addressed by the in-lieu fee.
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c. Percent of Sales Price
A third and less common approach to establishing in-lieu fees is as a percentage of
sales price. Advantages to this approach are that rates automatically adjust for
differences in market conditions by area and over time, which may be helpful given the
wide range of conditions in Hawaii County. A disadvantage is that it is more complicated
to implement and cannot be readily applied to a rental project. To apply the fee, the
payment obligation must be recorded on each market rate unit and the fee collected out
of escrow upon sale of the unit. Alternatively, an estimated sales price may be used in
advance of the actual sale occurring. Table 1-3 illustrates in-lieu fees using a percentage
of sales price approach. Selecting an in-lieu fee in the 1% to 2% of sales price range
would result in similar in-lieu fee rates to the options identified above. A per square foot
in-lieu fee could be applied to rentals.
Table 1-3. Illustration of In-Lieu Fee, Expressed as Percent of Sale Price
In-Lieu Fee as % of Sales Price, Expressed as Equivalent $/SF cost
Prototype Living Area (sq.ft.) Prototype Sale Price 1% 1.5% 2% 3%
Kailua Kona Single Family, Larger 2,300 $1,541,000 $7 $10 $13 $20
Kailua Kona Single Family, Smaller 1,500 $1,050,000 $7 $11 $14 $21
Attached Condo 1,200 $720,000 $6 $9 $12 $18
Single Family (Kohala Resort) 2,400 $3,120,000 $13 $20 $26 $39
Attached Condo (Kohala Resort) 1,400 $1,470,000 $11 $16 $21 $32
Waikoloa Single Family 1,700 $1,050,000 $6 $9 $12 $19
Waimea Single Family 1,750 $1,000,000 $6 $9 $11 $17
Hilo Single Family 1,700 $725,000 $4 $6 $9 $13
Puna Single Family 1,200 $390,000 $3 $5 $7 $10
Hamakua Single Family 1,500 $630,000 $4 $6 $8 $13
For the first two in-lieu fee approaches described above, an index is needed to adjust
the in-lieu fee each year. Adjustments are usually automatic and implemented
administratively, similar to regular updates for affordable pricing and rents. Some options
for adjustments include:
a) Construction cost index from Engineering News Record
b) Consumer Price Index
c) Index based on changes in home prices using data published by UHERO.
d) Update to the gap-based approach shown in Table 1-2.
In-lieu fees expressed as a percentage of sale price adjust automatically and don’t
require another adjustment mechanism.
In-lieu fees are typically collected prior to building permit issuance. Collection prior to
occupancy is another option that builders tend to prefer since it avoids financing costs
associated with paying the in-lieu fee at building permit. When in-lieu fees are expressed
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as a percent of sale price, the fee will need to be collected out of escrow at closing of the
sale unless an estimated sale price is used to determine the amount due.
To avoid all projects defaulting to the fee option, if preferred, certain types of projects
could be precluded from use of the in-lieu fee option. For example, large projects over a
threshold size, such as 500 units or more, that are more capable of providing affordable
units in a standalone rental development that will leverage other subsidies, or projects in
the ocean-front resort areas that have stronger feasibility. Projects precluded from use of
the fee would need to utilize one of the other compliance choices (on-site units, off-site
units, land dedication, finished lots).
(3) Modify or Eliminate the Option to Provide Finished Lots – The current approach for
determining affordable lot prices results in prices above what buildable lots sell for at
market rate in many locations. As currently structured, it is not clear the option to provide
finished lots delivers an affordability benefit. We recommend either modifying the option
to provide a clearer affordability benefit or eliminating the option all together. If the option
is retained, one approach would be to require lots be conveyed at no cost to eligible
purchasers, since even without the cost of purchasing a finished lot, the cost of building
a new home will generally exceed the 80% and 100% AMI affordable purchase prices
that apply to the finished lot option.
(4) Broaden Applicability – Chapter 11 currently applies only to rezonings, which is a
common approach; however, many programs apply requirements more broadly to all
projects over a threshold size, including Maui and Kaua’i. Applying requirements to all
projects over five or ten units would help increase production of affordable units through
the program.
(5) Increase Incentive to Provide Affordable Units – If the County would prefer to see more
projects provide affordable units on-site, it would be helpful to increase incentives to do so.
Following are possible approaches that could be used independently or in combination:
a. Density bonus – Chapter 11 currently provides a density bonus of 10% when
affordable units are provided. The County could consider enhancement of the
incentive to provide affordable units within the project by significantly increasing
the density bonus, to say 50% or 100%, or waiving minimum lot size standards
for projects providing all required affordable units on-site which are connected to
public water and sewer. To be effective, the density bonus may also need to be
accompanied by an ability to request modification of other development
standards like setbacks to the extent they would prevent achievement of the
allowed density bonus.
b. Affordable Unit Mix – Chapter 11 caps the share of affordable units by income
category (Section 11-5(d)). Removing these prescriptive percentages would
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provide additional flexibility to projects that provide affordable units on-site.
Chapter 11 already establishes powerful incentives to provide affordable units at
lower income levels through its system of credits, ensuring projects will not just
default to the highest income levels allowable.
c. Credit-based Incentive – Currently, the same affordability percentage applies to
projects whether units are provided on-site, off-site, or through excess credits.
Allowing an incentive in the form of a reduction in the affordable housing credits
required for projects that include affordable units on-site, or have other desired
characteristics, could help make on-site units a more competitive choice. As an
example, Kaua’i allows a reduction up to 50% for projects that provide single
family affordable units, build green, or provide affordable rental units at 60% or
80% of AMI without use of County land or funds.
d. Local version of 201H-38 State program – The County could consider creating a
local version of the State’s 201H-38 program, which allows projects to request
exemptions from planning, zoning, and construction standards that do not
negatively affect health and safety and creates a streamlined approval process.
A local version of this program could allow customization of program features to
meet local policy objectives while potentially expanding use of the program. For
example, a reduced affordable unit threshold to be eligible for the program, of
say 20% to 30%, may encourage more projects to provide on-site affordable
units to qualify. The County could also limit the scope of available exemptions
under the local version of the program; for example, by not including fee waivers,
restricting use to projects that are primarily residential, and could preclude use of
the program within certain geographic areas or zoning districts. Maui established
a local version of the 201H-38 program that local development projects have
found attractive to use. Use of the State program by local affordable development
projects in Hawaii County also shows the potential promise of this tool. A local
version of the 201H-38 program could be expanded to encompass a broader
array of projects, bundling several of the incentive tools discussed in Section 7.
(6) Ensure Affordable Prices are Below Market – When deed restricted units are priced
too close to market, this can create challenges in marketing the units. Honolulu is an
example of the pitfalls that can occur when affordability and qualification standards are
not workable for inclusionary unit buyers, resulting in affordable units sitting unsold for
an extended period. We recommend that projects be precluded from utilizing affordable
unit pricing tiers that exceed 75% of the market rate average for the area1. There are
several options for implementing a provision of this nature, including:
1 This discussion applies to affordable pricing for units, as opposed to finished lots. See separate recommendation on finished lots.
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a. Apply the 75% limit on a case-by-case basis as projects proposing on-site for-
sale affordable units come forward for approval using an analysis of market data
at the time.
b. Specify maximum pricing tiers by geographic area in the County’s annual
Affordable Housing Guidelines, based on an annual update of market data.
c. Specify maximum pricing tiers by geographic area in updating the ordinance.
(7) Pursue Opportunities to Reduce Development Costs – The Hawai’i County housing
market is exhibiting signs of feasibility challenges driven by high costs of construction.
This is evidenced by feasibility analysis findings, feedback from stakeholder interviews,
and pricing of entitled development sites. Projects with high sales prices are able to
sustain these high costs; however, containing or reducing costs would be helpful for
promoting affordability as it would allow projects with more moderate prices to “pencil”
financially. While construction costs are out of the County’s control to a large extent,
there may be areas where the County can have an impact, some of which may already
be under consideration in connection with the updates to Chapters 23 and 25 of the
County Code that are underway. Possible areas for exploration include:
a. Minimum building site sizes – One impediment to feasibility is the cost of site
improvements such as interior streets, utilities, grading, and other costs
necessary to make properties buildable. Increased allowable densities and
reduced minimum lot sizes in appropriate locations could enhance feasibility of
some projects by allowing costly site improvements to be spread across a
greater number of units.
b. Subdivision standards – Several stakeholders suggested that there may be
opportunities to reduce costs through changes to subdivision standards. Others
were interested in ensuring the inspection process for modular homes was
structured in a manner that does not create a barrier to this housing type.
c. Parking standards – the County’s parking standards do not vary by bedroom
count and could lead some projects to be over-parked, such as senior housing.
Reducing or waiving minimum parking standards for all projects, or projects that
provide affordable units on-site, may be a relatively straight forward way to
reduce costs, particularly in urban or waterfront locations where land costs tend
to be higher.
KMA is not an expert on the standards discussed above and changes would be outside
the scope of Chapter 11.
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2.0 INTRODUCTION AND SUMMARY OF FINDINGS
This report provides analysis and recommendations in support of potential updates to Hawai’i
County’s Affordable Housing ordinance established in Chapter 11 of the Hawai’i County Code
(“Chapter 11”). The report was prepared by Keyser Marston Associates, Inc. (“KMA”) for the
County of Hawai’i (“County”).
The report includes the following major components:
Financial Feasibility Analysis – The real estate feasibility analysis evaluates the ability
of residential developments to sustain existing or modified affordable housing
requirements, examines whether current requirements are a barrier to market rate
housing, and whether allowing additional density could improve feasibility.
Compliance Cost Analysis – the estimated cost of complying with Chapter 11 under
various alternatives such as on-site units and purchase of excess credits is quantified
and expressed as a dollar per square foot cost. The purpose is to assist in
understanding incentives for developers and to inform the design of updated provisions.
Excess Credit System Review – the system of excess credits is reviewed to determine
if it is serving as an effective tool for producing affordable housing.
Requirements in Other Counties – affordable housing requirements in other counties
along with feedback obtained from local staff regarding experience with implementation
are summarized to provide context for potential updates to Chapter 11.
Incentive Programs – information regarding other programs focused on creating
incentives for market rate and affordable housing production.
2.1 Household Income Categories
The analysis addresses income categories as defined by the United States Department of
Housing and Urban Development (HUD). Chapter 11 utilizes the following income categories,
each defined in relation to the Area Median Income (AMI):
Under 60% of AMI;
60% to 80% of AMI;
80% to 100% of AMI;
100% to 120% of AMI; and
120% to 140% of AMI
The 2023 median income for Hawai’i County is $100,800 for a four-person household. The 2023
income limits for each of the above income categories are presented in Table 2-1.
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Table 2-1: 2023 Income Limits for Hawai’i County
Household Size (Persons)
1 2 3 4 5 6
60% AMI $42,360 $48,420 $54,480 $60,480 $65,340 $70,200
80% AMI $56,480 $64,560 $72,640 $80,640 $87,120 $93,600
100% AMI $70,600 $80,700 $90,800 $100,800 $108,900 $117,000
120% AMI $84,720 $96,840 $108,960 $120,960 $130,680 $140,400
140% AMI $98,840 $112,980 $127,120 $141,120 $152,460 $163,800
Source: Hawai’i Housing Finance and Development Corporation and U.S. Department of Housing and Urban Development (HUD).
2.2 Overview of Existing Chapter 11 Requirements
Chapter 11 requires affordable housing to be provided in conjunction with rezonings to
residential, resort and industrial uses. Rezonings to residential uses that include five or more
residential units or lots are subject to the requirements of Chapter 11. Projects must provide
affordable housing credits equal to 20% of the units in the project. Rezonings for resort, hotel
and industrial uses that add more than 100 full time equivalent employees are required to
provide one affordable housing credit per four full time equivalent employees. The analysis in
this report is focused on provisions of Chapter 11 that apply to residential uses.
Chapter 11 includes a schedule identifying the credits that apply according to the tenure and
affordability level of the unit, shown in Table 2-2. As an example, for-sale units at 120% to 140%
AMI earn 0.5 credits while for-sale units at 80% AMI or below earn two credits.
Table 2-2: Schedule of Affordable Housing Credits Per Unit, Chapter 11
For Sale Units Rental Units Finished Lots
<60% AMI 2 2 1
60% to 80% AMI 2 1.5 1
80 to 100% AMI 1.5 1 0.5
100 to 120% AMI 1 0.5 N/A
120% to 140% AMI 0.5 N/A N/A
The following options are available to obtain the required 20% credits:
On-site or off-site affordable units. Providing 10% to 13.5% affordable units, depending
on the mix of income levels, earns the requisite 20% credits.
Purchase excess credits earned by another project (common).
Provide a buildable site accommodating affordable units equal to 20% of the market rate
project.
Provide finished lots for sale to qualifying households at an affordable price.
Provide infrastructure.
Chapter 11 previously included an option to pay an in-lieu fee, which was removed as part of a
2011 amendment.
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When affordable units are provided, the maximums shown in Table 2-3 apply regarding the
percentage of units that may be provided by income level. Projects may provide units at lower
AMI levels, but not higher.
Table 2-3: Maximum Percentage of Affordable Units by Affordability Level, Chapter 11
For Sale Rental Finished Lots <60% AMI No maximum No maximum No maximum
60% to 80% AMI No maximum 30% No maximum
80 to 100% AMI 30% 20% 80%
100 to 120% AMI 20% 10% n/a
120% to 140% AMI 10% n/a n/a
2.3 Need for Affordable Housing in Hawai’i County
There is a critical need for affordable housing in Hawai’i County as evidenced by prior studies
and Census data that identifies the prevalence of affordability challenges. The Hawai’i Housing
Planning Study prepared by SMS in 2019 provided an in-depth look at affordability and
availability of housing. Key findings include:
There is an estimated need for over 13,000 new housing units during the 2020 to 2025
period, of which approximately 10,800 (80%) of the need is for units affordable to
households earning less than 140% of AMI. This estimated need is distributed by
income category as shown in Table 2-4.
Table 2-4. Hawai’i County Housing Need by Income Category, 2020-2025
< 60 AMI 39%
60% up to 80% AMI 17%
80% up to 120% AMI 16%
120% up to 140% AMI 9%
140% up to 180% AMI 9%
180% AMI and above 10%
Source: SMS Hawai’i Housing Planning Study 2019.
Approximately 31% of households were spending more than 30% of their income on
housing, which is the threshold to be considered cost-burdened. At least 22% were
spending more than 40% of their income on housing, considered severely cost-
burdened. Updated 2020 Census data released after the SMS study shows similar
findings with 32% of households cost-burdened, including 43% of renter households.
There has been an increase in overcrowding and multiple families or multiple
generations doubling-up in housing units over the prior two decades.
41% of home sales in Hawai’i County were to out-of-state purchasers in 2018. The
purchase price of homes bought by out-of-state buyers was 88% higher than the prices
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of homes purchased by Hawai’i residents. This price differential is significantly higher
than the state-wide average of 45%. 74% of homes purchased by out-of-state buyers
are used as vacation homes.
Only 20% of households wishing to buy a single family housing unit in Hawai’i County
are financially able to afford both the monthly payment and a 20% down payment.
Table 2-5 provides a summary of the existing housing stock in Hawai’i County based on data
from the 2015-2020 American Community Survey (ACS). As shown, 19% of housing units are
vacant. Most vacancy is due to seasonal or vacation home use or another reason such as being
renovated. Only 3% of units are available for rent or sale.
Table 2-5. Existing Housing Stock and Vacancy
Total Housing Units 88,624 100%
Occupied Units 71,747 81%
Owner-occupied housing units 49,721 56%
Renter-occupied housing units 22,026 25%
Vacant Units 16,877 19%
For seasonal, recreational, or occasional use 7,524 8%
Other vacant 5,746 6%
For rent or sale 2,715 3%
Rented or sold, not occupied 801 1%
For migrant workers 91 0%
Source: ACS 2020 Five-Year Estimates, Tables B25004, S2504, and S1101.
2.4 Financial Feasibility Analysis
The feasibility analysis evaluates development economics of residential projects in various
locations on the Big Island and their ability to sustain existing and modified affordable housing
requirements.
The analysis evaluates “prototypical” or representative projects to facilitate a general
understanding of feasibility conditions in Hawai’i. The economics of specific projects can be
expected to vary to some degree from the prototypical projects analyzed, with some having
stronger and some having weaker economics based on project-specific zoning, site conditions,
development costs, market considerations and target returns. A summary of the analysis and
findings follows. In reviewing the findings of the feasibility analysis, it is important to keep in
mind that it represents a snapshot in time based on market conditions as of the time of
preparation in summer / fall 2022. Subsequent increases in costs, interest rates, and some
softening of prices will have made conditions more challenging. Conditions will continue to
evolve in response to changes in rents, sales prices, construction costs, interest rates, and
other factors.
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a. Residential Feasibility Analysis
The residential feasibility analysis evaluates the development economics of prototypical
residential development projects on Hawai’i Island. Three main project types are evaluated:
single family, attached condominiums and apartments. To capture differences in market
conditions by location, the analysis evaluates feasibility in seven distinct sub-markets, as shown
in Table 2-6. Single family units are evaluated in all submarkets, attached condominiums are
evaluated in two submarkets, and apartments are evaluated based on broader East and West
Hawai’i submarket definitions.
Table 2-6: Summary of Prototypes and Submarkets Evaluated
Submarket Single Family Attached Condo Apartments
Kailua Kona X X
X Kohala Oceanfront X X
Waikoloa Village X
Waimea X
Hilo X
X Puna X
Hamakua X
Typical unit sizes, number of bedrooms, and development density of the prototypes vary by
area based on a review of development activity and sales data, as described in Section 6.
Financial feasibility was tested under the following scenarios regarding affordability
requirements:
1. Purchase of Excess Credits;
2. No Chapter 11 Requirement;
3. On-site affordable units with two alternatives regarding affordability mix; and
4. In-lieu fees of $5, $10, $15, and $20 per square foot.
Purchase of excess credits is referred to as the “base case” scenario under existing
requirements because it has been the most common method of satisfying Chapter 11. Findings
of the feasibility analysis are summarized in Table 2-7, followed by a narrative discussion:
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Table 2-7. Summary of Feasibility Scenario Testing
Scenario 1 2 3a 3b 4a 4b 4c 4d
Credits (Base Case) No Rqrm’t
On-Site Units In-Lieu Fee ($/NSF in Project)
Prototype Project Mix A, 13.5% affordable Mix B, 10% affordable $5 $10 $15 $20
W1 Kailua Kona Single Family, Larger F F M M F F F F
W2 Kailua Kona Single Family, Smaller F F M M F F F F W3 Kailua Kona Attached Condo I I I I I I I I
W4 Kohala Resort Single Family F F F F F F F F
W5 Kohala Resort Attached Condo F F F F F F F F
W6 Waikoloa Single Family F F M F F F F F
W7 Waimea Single Family F F I I F F M I
E1 Hilo Single Family I I I I I I I I
E2 Puna Single Family I I I I I I I I
E3 Hamakua Single Family I I I I I I I I Wa West Hawai'i Market Rate Rental F F M M F F F F
Ea East Hawai'i Market Rate Rental I I I I I I I I
F= Feasible / More Likely to Develop M = Marginal / Weaker Feasibility I = Infeasible / Less Likely to Develop
Market rate developments were found to be feasible in Kailua Kona, Waikoloa Village,
Kohala, and Waimea under the base case analysis, which assumes purchase of credits
to satisfy Chapter 11. The condo prototype in Kailua Kona is an exception that was
found to be infeasible at current prices. While the analysis indicates that projects are
feasible, anecdotal evidence such as the level of development, feedback received
through developer stakeholder interviews, and pricing of entitled development sites
suggests projects still face challenges moving forward.
Market rate residential projects in Hilo, Puna, and Hamakua were found to be infeasible.
This is driven by an imbalance between high development costs and market prices.
Despite the lowest pricing of any submarket and the feasibility challenges identified,
Puna represented approximately 40% of new residential building permits on Hawai’i
Island over the last ten years. This appears to be driven by availability of existing
buildable lots that can be purchased at a relative discount.
New market rate units in Hilo, Puna, and Hamakua are affordable within or near the
income ranges Chapter 11 serves (under 140% of AMI), specifically, market prices for
new homes in Puna are estimated to equate to approximately 89% of AMI, homes in Hilo
are estimated at 165% of AMI, and new homes in Hamakua are estimated at 144% of
AMI. This suggests additional market rate housing production in these areas would
address affordability goals of the Chapter 11 policy.
Overall, Chapter 11 is not a major driver of feasibility challenges on the Big Island.
Fundamentally, feasibility challenges are driven by an imbalance between high
development costs and the prices the market can bear or that buyers are able to afford.
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Chapter 11 can be satisfied for an estimated cost of approximately $10,000 per market
rate unit through the purchase of excess credits2. While not insignificant, this is a
relatively minor percentage of total development cost for a unit (~1% in the West Hawai’i
communities, ~2% in the East Hawai’i communities and ~2.7% for apartments), which
dampens the potential influence on feasibility conditions.
Mandating affordable unit production is estimated to adversely impact feasibility for
several of the prototype projects that are currently feasible, as shown in Table 2-7.
Projects that are feasible assuming compliance through purchase of excess credits are
downgraded to marginally feasible or infeasible if on-site affordable units were required,
except resort projects on the Kohala coast. The cost of providing on-site units in a mixed-
income format with affordable units dispersed throughout the project can represent up to
10% of total development costs of a project, depending on the project type, which results
in a stronger influence on feasibility compared to excess credits.
Projects in Kailua Kona, and Waikoloa Village are estimated to sustain in-lieu fees of up to
$20 per livable square foot in the project while projects in Waimea are estimated to sustain
an in-lieu fee of up to $10 per square foot. Resorts on the Kohala coast are estimated to
sustain fees of $30 per square foot or more. Projects in Hilo, Puna, and Hamakua were
not found to support an in-lieu fee due to feasibility challenges even without a requirement.
Section 6-9 provides an analysis to express the cost to comply with alternative affordable
housing requirements as a cost per unit and per square foot. On-site affordable unit
percentages equivalent in cost to the in-lieu fee ranges identified in Table 1-1 are also provided.
2.5 Review of Excess Credit System
Chapter 11 allows projects that produce extra affordable units beyond the level required to earn
“excess credits.” These excess credits may be used on another project or sold. Since this
feature was added to Chapter 11 in 2005, purchase of excess credits has emerged as the
default compliance option for many projects.
On the surface, providing an option to buy and sell excess credits would seem to be a
straightforward and flexible approach. However, the track record with this approach suggests
the excess credit system has not served as an effective tool for producing affordable housing.
Existing credits were earned through completion and occupancy of affordable units, which is
generally consistent with the purposes of Chapter 11. However, affordable developers indicated
that they do not use credits to finance their affordable projects and that credits do not induce
them to build affordable units in Hawaii County. This was confirmed through a review of several
2 This $10,000 figure is based on an average credit price of $50,000 and a requirement for credits equal to 20% of the market rate units in the project, $50,000 x 20% = $10,000 per market rate unit.
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pro formas for local affordable housing developments. In these pro formas, excess credits are
not identified as part of the capital stack to finance the affordable units, nor are they identified as
a source of funds to pay down or service debt over time once the projects are completed. Thus,
there does not appear to be a clear link between the creation of affordable units and the ability
to earn and sell the credits.
In practice, credits function as a de-facto in-lieu fee, except proceeds from sale of credits accrue
to private parties with no requirement to expend funds on local affordable housing projects.
A large balance of over 1,300 credits was built up through affordable projects that were primarily
completed over a decade ago. The large balance has been built up in part because market rate
development activity that would utilize credits has been limited. This excess credit balance has
the potential to offset the ability of Chapter 11 to produce affordable housing for years to come,
thus limiting the effectiveness of Chapter 11 going forward, unless the system is modified.
2.6 Requirements for Other Counties
Requirements of Chapter 11 were compared to the counties of Honolulu, Maui, and Kaua’i,
each of which have affordable housing policies in place. Staff from each of the counites were
interviewed to assist in understanding the experience in implementing the requirements.
Like Hawaii County, the other counties have had challenges with constrained housing
production. High development costs, infrastructure limitations, land use regulations, the Great
Recession, and high inclusionary requirements all appear to have contributed to the limited
amount of housing production. Inclusionary requirements in Maui and Kaua’i were reduced from
more substantial prior requirements due to feasibility considerations in 2014 and 2020,
respectively. Maui saw a somewhat higher rate of housing production since then, while Kaua’i
has not, despite providing an exemption in certain locations for projects that build to the
maximum allowed density.
Both Honolulu and Maui have a local version of the State’s 201H-38 program, which provides
flexibility and an expedited approval process for projects that include more than 50% affordable
housing. Maui’s program has been favored over the State program by some projects. Honolulu’s
requirements for deeper affordability and a longer term of affordability compared to State
requirements has led to developer feedback that the program be brought into closer alignment
with the State program. See Section 3.0 for more information.
2.7 Incentives
Section 7 provides information on approaches other communities have used to incentivize
market rate and affordable housing production. Incentives encompass both regulatory and
financial tools and include the following:
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Density bonus,
Flexible development standards,
Reduced parking requirements,
Expedited approval processes,
Expanding the types of projects eligible for a by-right administrative approval process.
Fee waivers,
Property tax abatements.
Each type of incentive is discussed in more detail in Section 7. Some of the measures, such as
reduced property taxes for affordable units and density bonuses, are already used in Hawaii
County. The State’s 201H-38 program makes several of the listed incentives available to eligible
projects with more than 50% affordability. Creation of a local version of such a program could
effectively bundle many of the common types of development-related incentives being offered
by other communities into a single process.
2.8 Report Organization
The report is organized into the following seven sections:
Section 1.0 provides an executive summary and recommendations.
Section 2.0 provides an introduction and summary of findings.
Section 3.0 provides information on affordable housing requirements for other counties.
Section 4.0 summarizes feedback from a series of developer stakeholder interviews.
Section 5.0 provides an evaluation of the County’s excess credit system.
Section 6.0 presents the financial feasibility of residential development.
Section 7.0 describes approaches used in other communities to incentivize market rate
and affordable housing production.
The report includes two appendix sections that provide supporting data and analysis:
Appendix A. provides the supporting pro forma analyses for the feasibility analysis.
Appendix B. presents supporting residential market data.
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3.0 AFFORDABLE HOUSING REQUIREMENTS – OTHER COUNTIES
Affordable housing requirements in Hawai’i County are compared with Honolulu, Maui, and
Kaua‘i to provide context for consideration of updated requirements. The comparison is
presented in Table 3-1.
Table 3-1: Comparison of Affordable / Workforce Housing Requirements
County Kaua’i Honolulu Maui Hawai’i
Year Adopted / Updated Rev. 2020 Rev. 2018 Rev. 2014 Rev. 2011
Minimum Project Size 10 units 10 units 10 units 5 units
Percentage Required
20% (reduction to as low as 10% with incentives for integration w/mkt rate, single family, 60% or 80% AMI rentals, build green)
FS: 5% for 30 yrs OR 10% for 10 yrs OR 15% for 5 yrs R: 5% [TOD bonus projects FS: 10-30%, R: 15%]
25% of market units (equates to 20% of total units in mixed income project) (20% of market units if units are affordable in perpetuity)
Effective requirement of 10% to 13.5% depending on affordability level. [Projects must earn credits equal to 20% of units. Credits vary based on affordability level of provided unit]
Income Level of Units
10-25 units: 80-120% AMI with average of 100% AMI 26+ units: 30% up to 80% AMI 40% 80-100% AMI 30% 100 - 120% AMI
FS: 50% at 100% AMI, 50% at 120% AMI R: 80% AMI
FS: 20% @ 120-140% AMI 50% @ 100-120% AMI 30% @ 80-100% AMI R: 1/3 @ 100-120% AMI 1/3 @ 80-100% AMI 1/3 @ 0-80% AMI
Effective requirement based on required credits: FS: 10% @ 120-140% AMI 20% @ 100-120% AMI 30% @ 80-100% AMI 40% @ 60-80% AMI R: 10% @ 100-120% AMI 20% @ 80-100% AMI 30% @ 60-80% AMI 40% @ 0-60% AMI
Term of Affordability FS: 50 years R: 40 years
FS: 5-30 years depending on set-aside percent R: 30 years
FS: 5-10 years depending on AMI level R: 30 years
FS: 10 years R: 20 years
Fee Option
Fee per unit owed: 80% AMI: $218,240 100% AMI: $151,280 120% AMI: $83,080 140% AMI: $14,700
no fee option
Fee per unit owed equal to difference between affordable price at 160% AMI and 100% AMI for a 3 BR unit.
no fee option
Excess Credits
Yes for units built on State lands. Credits may satisfy 25% of workforce housing requirement. No geographic restriction.
No except where required by DHHL.
Yes. No geographic restriction on use. 201H projects earn credits if more than 50% affordable.
Yes. Restricted to use within 15 miles (does not apply to DHHL credits).
Finished Lots Option None None None Finished lots affordable to 80% or 100% AMI
Other Compliance Options
Offsite units, land dedication, rental units
Rental units, offsite units, land dedication
Offsite (within same community plan area), land dedication, credits.
Offsite units, rental units, land dedication, infrastructure, credits. Abbreviations: R = Rental FS = For Sale AMI =Area Median Income Note: This chart presents an overview, and as a result, terms are simplified. For use other than general comparison, please consult the code and staff of the jurisdiction.
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Affordable Percentage – Kaua’i and Maui have affordability requirements that equate to 20% of
units3. Honolulu’s requirements range from 5% to 15% affordable units, depending on the term
of affordability and tenure. Projects seeking a height and density bonus within specific zones are
required to provide twice as many affordable units, or three times for rentals. Hawai’i County’s
requirements equate to an effective 10% to 13.5%4 of units required to be affordable, depending
upon the income level of the affordable units, less than Maui and Kaua’i but more than Honolulu
for non-TOD projects.
In-Lieu Fee – Kaua’i and Maui allow developers to pay a fee in lieu of providing units onsite,
while Honolulu and Hawai’i County do not. Fees for both programs are calculated per affordable
unit owed. This type of fee structure has the advantage of simplicity and a direct link to the
affordable unit not being provided. The disadvantage is that it creates a disincentive for smaller
unit sizes and higher density project types by charging the same amount regardless of the size
of the market rate units, which creates a disproportionate burden on projects with small units.
Kaua’i allows payment of in-lieu fees subject to approval by the County Housing Agency. The
amount of the in-lieu fee is based on the number of affordable units not provided multiplied by a
per affordable unit in-lieu fee amount. The in-lieu fee amount varies based on the income level
of the affordable unit that is not provided. For example, the in-lieu fee for an 80% of AMI unit is
$218,240 while the in-lieu fee for a 120% of AMI unit is $83,080.
Maui’s in-lieu fee rate is also applied on a per affordable unit basis. The per affordable unit in-
lieu fee rate is calculated by comparing affordable sales prices for a three bedroom single family
home at 160% of AMI and at 100% of AMI, with the in-lieu fee equal to the difference between
the two. Maui County staff have indicated the in-lieu fee option is not being used.
Affordable Prices – Pricing of for-sale affordable units in Honolulu and Kaua’i focus on
households below 120% of AMI while Hawai’i and Maui address housing needs up to 140%
AMI. Kaua’i and Hawai’i both require some units at 80% AMI while the lowest pricing in Maui
and Honolulu is at 100% AMI.
Affordable Rents – For rentals, Kaua’i, and Maui both specify rents at a range of income levels
from 80% to 120% AMI while Honolulu just requires rents at 80% AMI or below. Hawai’i covers
the broadest range from 60% to 120% of AMI rents.
Excess Credits – Kaua‘i, Hawai’i and Maui allow use of excess credits to meet affordable
housing requirements. Honolulu’s ordinance does not include an excess credit feature, although
the requirement to provide credits for DHHL projects would still apply. Kaua‘i provides credits for
3 Maui’s requirement of 25% of market rate units calculates to 20% of total units. 4 This effective percentage range is calculated from the credits earned per affordable unit and the requirement for credits equal to 20% of units under Chapter 11.
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affordable units built on State lands only and allows credits to be used to meet up to 25% of the
total affordable housing requirement for a project.
Maui provides credits for affordable units in excess of requirements but sets a higher threshold
of 50% affordability before credits are earned for 201H projects (which require 50%
affordability). If units are part of an affordable housing project with a portion of the units rented
above 60% AMI, then credits may only be issued for 75% of units. Credits may only be used to
offset affordable obligations on future projects and not on projects with units due at the time the
credit is created.
Neither Maui nor Kaua‘i have a geographic restriction on the use of credits, while Hawai’i does.
Additional discussion of the Maui, Kaua’i and Honolulu policies follows.
Affordable finished lots – Hawaii County is the only one of the four programs that provides an
option to sell affordable finished lots.
3.1 Maui County
Maui’s Residential Workforce Housing Policy was enacted in 2006 and originally required
developers to provide affordable units equal to 50% of the number of market rate units built
(50% of market rate units is equivalent to a requirement of 33% of total units in the project). The
affordable units must be built in the same Community Plan Area as the market rate units. After
the program was enacted, housing development activity slowed. The policy was enacted just
prior to the “Great Recession” and foreclosure crisis, which likely contributed to the slow down,
as it did in many communities. Between 2006 and 2014, only one project executed a Workforce
Housing Agreement, resulting in three affordable housing units built and sold5. To encourage
more housing development overall, Maui lowered the requirement to 25% of market rate units
(this equates to 20% of total units) in 2014. Since the requirement was lowered, over 1,000
affordable units have been built under this program, 100 are under construction and an
additional 700 affordable units are pending.6
The chart below shows overall permitting of residential units in Maui County. The chart
illustrates the steep decline in permitting that occurred from 2007 through 2011, followed by a
gradual recovery, but still below the level of production prior to adoption of the policy and the
Great Recession.
5 SMS, County of Maui Affordable Housing Policy Plan Final Report, August 2018. 6 Data provided by County of Maui Department of Housing.
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Source: The University of Hawaii Economic Research Organization.
* Effective percentage of total units in the project required to be affordable, equivalent to the 50% and 25% of market
rate units in the original and revised policy, respectively.
Maui County’s Residential Workforce Housing Policy allows use of excess credits to meet
affordable housing requirements. Maui County does not control the price or sale of credits
between developers. The credits do not expire and are not tied to the income levels of the units
produced. Data provided by the County indicate that since 2018, one completed project satisfied
its inclusionary obligation of 17 affordable units via credits and one project that is under
construction will use credits to satisfy its obligation for four affordable units. One additional
pending project proposes to use 16 credits to satisfy its obligation.
While the Residential Workforce Housing Policy includes an in-lieu fee option for developers,
County staff indicated that this option is not being used.
The County’s policy allows developers to provide affordable units equal to 20% of market rate
units (instead of 25%) if the affordable units remain affordable in perpetuity. While maintaining
affordability in perpetuity may sound desirable, Maui staff cited practical concerns with this
concept due to a lack of financial resources or economic incentive for the property owner to
maintain affordable units in good condition in perpetuity. Maui County staff indicated a 20- to 30-
year deed restriction with a County right of first refusal when the deed restriction expires is
preferable.
Maui County’s Affordable Housing Incentive Policy
In addition to the Inclusionary Housing policy, Maui County also established an incentive policy
for developers of 100% residential workforce housing projects, codified in Chapter 2.97 of the
County Code. The incentives include fast-track processing, exemptions from certain
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Maui County, Residential Units Permitted
Initial Adoption - 33% inclusionary*
Inclusionary
Reduced
to 20%*
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requirements, and fee waivers. The County’s Affordable Housing Fund can be used to
compensate various County departments and enterprise funds for fee waivers.
The first project to seek exemptions under this policy was in 2020, and several more projects
have used the program since then. In total, about 650 affordable units are pending or under
construction in projects that have utilized Chapter 2.97. The program is similar to the state-wide
201H exemption program, which has been used extensively on Maui. Recently, the County has
been receiving more projects applying under its Chapter 2.97 program than under the state-
wide program. County staff indicated that this may be due to the types of projects being built in
Maui, or due to developers feeling that the County’s program is easier to navigate.
3.2 Kaua’i County
The County of Kaua’i adopted an affordable housing ordinance that went into effect in 2008,
which required developers to designate 30% of new housing units as affordable. According to
the Kauai County General Plan, no affordable housing units were produced by the policy during
the decade that followed adoption. Based on concerns that the requirement was too onerous
and served to deter housing development, the County lowered its inclusionary requirement to
20% of new housing units in October 2020 and expanded options to reduce the inclusionary
percentage if certain conditions are met.
Kaua’i County’s updated requirements apply to market rate residential projects with 10 or more
units; no projects exceeding this threshold have occurred since the program was revised. As
shown in the chart below, there continues to be limited market rate residential development
following the update to the policy. Development in Kaua’i is subject to constraints similar to
Hawaii County, including availability of infrastructure and high costs. The most active housing
developers are the County of Kaua’i and Habitat for Humanity. The market rate development
that does occur has tended to be in small or single-unit projects.
The County exempts projects from the inclusionary housing program ln certain Town Core
areas that build to the maximum allowable density. County staff noted that even in areas
exempt from the inclusionary housing requirements, market rate housing development has not
occurred.
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Source: The University of Hawaii Economic Research Organization.
The affordable housing ordinance also applies to resort developments in visitor destination
areas on Kaua’i. Resort developments in visitor destination areas that have the density to
accommodate more than 10 dwelling units or 20 hotel rooms are required to provide workforce
housing equal to 50% of units, or they may conduct an independent analysis of affordable
housing needs and provide 35% of units according to those needs. Two resort projects have
been processed under the new requirements. One project paid an in-lieu fee instead of
providing units onsite and the second project agreed to provide rental units at 60% AMI or
below. The project providing units onsite conducted an analysis of the resort’s job creation and
chose to provide units at 60% AMI, which resulted in an onsite obligation of 50% x 35% of the
job creation, or 18 units.
3.3 Honolulu City and County
Honolulu adopted a City-wide affordable housing ordinance that went into effect in 2018. Prior to
that, the affordable housing requirements were part of Unilateral Agreements that were imposed
by the City when land was rezoned. Ordinance 18-10 broadened the affordable housing
requirement to apply to all projects with 10 or more units. The ordinance categorizes
developments as either Special Projects, located in transit-oriented areas, or projects in all other
areas. The inclusionary requirements for Special Projects are double the requirements for
projects in all other areas of the City.
The chart below shows residential permitting activity in Honolulu, before and after the ordinance
went into effect.
0
100
200
300
400
500
600
700
800
900
1,000
Kaua'i County, Residential Units Permitted
Inclusionary policy
effective
Amendment
to reduce
requirement
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Source: The University of Hawaii Economic Research Organization.
Since the ordinance went into effect, three transit-oriented projects have been built or are under
review and subject to the inclusionary requirements. The two projects that are completed both
chose to provide 10% of units affordable for 30 years. In addition, both projects include
additional affordable units as “Community Benefit Units.” These additional units account for
between 5% and 10% of the units and were negotiated as part of the development approval
process. The additional affordable units have shorter affordability terms, varying from 10 to 30
years.
The projects started marketing the units in the summer of 2022, but have had difficulty selling
their affordable units. City staff attribute part of the difficulty to strict underwriting rules contained
in the City’s Administrative Rules for the Ordinance, setting a more stringent limit on debt
relative to income than most lenders require, and which few prospective affordable unit
purchasers were able to meet. The City is in the process of revising these rules. Developers
also expressed concern with the 30-year deed restriction for the for-sale affordable units. One of
the projects is considering converting unsold affordable units to rental units, at least temporarily.
The project that is under review is proposing to provide off-site rental units in two separate
locations. A portion of the units will be provided as Community Benefit units. Units that are
affordable at 80% AMI will remain affordable for 30 years, as required by the City’s program,
while units provided at 100% AMI will remain affordable for 15 years.
Honolulu’s 201H Entitlement Program
Honolulu has a local version of the state’s Chapter 201H program, which provides fast-track
processing for projects that includes over 50% of units at affordable rents or prices. The state
program allows units to be affordable up to 140% AMI, with rental units affordable for 30 or
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Honolulu County, Residential Units Permitted
affordable housing
ordinance effective
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more years and ownership units restricted for 10 years. The City’s program requires 20% of
units to be affordable at 80% AMI and at least 31% to be affordable up to 120% AMI. All units
must remain affordable for 30 years. The local development community has expressed concern
with the deeper affordability and longer terms required by the City’s program. The City’s most
recent Housing Plan recommends that the City consider aligning its program with the state’s
program.7
3.4 Lessons Learned From Other Counties
Inclusionary programs produce affordable units when market rate residential
construction is occurring. Housing development in much of the state is constrained by
several factors, including significant infrastructure costs. Inclusionary requirements must
avoid constraining project feasibility to serve as an effective tool for creation of
affordable housing. Housing production declined sharply after adoption of high
inclusionary requirements in Kauai and Maui of 30% and 33%, respectively. Post-
adoption periods in Kauai and Maui coincided with the Great Recession in which
housing production nation-wide dropped by approximately 75%8. While market factors
were significant drivers of production trends, high inclusionary requirements appear to
have contributed to a decline in market rate housing production and/or more muted
recovery from the Great Recession.
The length of deed restrictions is an important consideration, and jurisdictions must
balance maintaining affordability with the marketability of units and the incentive for long-
term property maintenance and investment. Maui cited concerns regarding an option for
affordable units to be restricted in perpetuity, which can be problematic when significant
capital needs arise and there isn’t adequate incentive to reinvest due to the term of the
deed restriction.
Program guidelines, including the pricing of units, must be crafted carefully to ensure the
marketability of units. For example, for-sale inclusionary units in Honolulu have had
difficulty identifying qualified buyers who can meet the 33% debt to income ratio set in
administrative regulations, which is more stringent than standard mortgage underwriting
criteria.
Local fast-tracking and incentive programs for projects with affordable units offer a
valuable incentive for projects, as demonstrated by the approximately 650 affordable
units being produced under Maui’s affordable housing incentive policy.
7 2023 Housing Plan, City and County of Honolulu, October 2023. 8 U.S. Department of Housing and Urban Development, data on new privately-owned housing unit starts.
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4.0 DEVELOPER STAKEHOLDER INTERVIEWS
To inform the analysis and provide context, KMA conducted one-on-one interviews with
developers and industry professionals active in the local market. Outreach encompassed
professionals from the following organizations that have been active in residential development
on Hawai’i Island:
DR Horton9
EAH Housing
Hawai’i Island Community Development Corporation (HICDC)
HPM Homes
Hunt Companies
Mirein Development
Stanford Carr Development, LLC
Tinguely Development, Inc.
Interviewees encompassed both market rate and affordable developers. KMA also reached out
to approximately six additional development professionals who either declined or did not
respond to one or more requests to schedule an interview.
The following key themes emerged from these discussions:
Development Costs – Development costs are high and have been increasing. One
individual cited a 10% premium over Oahu based on additional freight / logistics costs
and a more limited local subcontractor pool. Another referenced recent sharp increases
in subcontractor bids. Several provided information on costs for recent or current
projects and / or indicative cost ranges in the market.
Infrastructure, Water, Sewer – Access to infrastructure, particularly water and sewer was
cited as a key consideration for a project. Lack of infrastructure was cited as a key
constraint to development.
Off-site improvement costs – Significant off-site improvement costs were cited as
impacting project feasibility. One developer stated off-site improvements that were
agreed to during the entitlement process contributed significantly to the project’s
infeasibility and remaining on hold for a long period.
Approaches to Enhancing Affordability – Approaches offered for encouraging projects to
provide affordable units and / or to reduce overall development costs include:
o Modify Building Code Standards – Initiate a robust evaluation of building code
standards to explore opportunities to reduce construction costs or allow
exceptions where standards are not well adapted to Hawai’i County or where the
9 In the case of DR Horton, insights were provided by a former DR Horton executive via email.
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need to improve affordability is an overriding consideration. Consider a separate
set of standards for affordable projects. Examples cited by stakeholders included
energy code standards that are the same whether air conditioning is installed or
not, which tends to raise costs for more modest homes without air conditioning.
Another example relates to soil conditions in Hamakua that typically require a
costly soil engineering study and over-excavation and modification of subsurface
soils to prevent settlement, standards existing homes in the area would generally
not meet.
o Subdivision Standards – Consider modifications that provide opportunities to
reduce costs, such as by reducing minimum standards for streets.
o Create a more streamlined and predictable entitlement and permitting process.
o Establish a building inspection process appropriate to modular or manufactured
housing that avoids creating a barrier to this type of housing.
o Give preferential treatment and added flexibility on zoning or other regulations for
projects that include affordable housing to save cost and time.
o Fee Wavers – Provide fee waivers to projects that include affordable units.
Overall Feasibility Conditions – Developers indicated that, in general, higher-end market
rate housing pencils financially while more modest priced housing does not. Feasibility
for market rate development is more challenging in Hilo and Puna and what market rate
development does occur tends to be smaller scale. One home builder indicated they
ceased operations on the Big Island due to real estate values consistently below
replacement costs, the costs and risks of land development, and the scarcity of finished
lots.
Chapter 11 – The stakeholders were familiar with Chapter 11 and some had experience
with complying with its requirements. None of the stakeholders indicated that Chapter 11
was a significant constraint on project feasibility, and most cited other challenges as
more significant concerns. Maui was cited as an example of a program that increased
requirements beyond a feasible level for a period and stopped construction, but none
suggested this condition is present in Hawai’i County. Some stakeholders encouraged
changes that might incentivize projects to provide affordable units. Several expressed a
negative view of the affordable credit option, as discussed further below.
One affordable developer expressed a favorable view of the land dedication option,
referencing the fact that site control is necessary to apply for financing. Another
suggested a land dedication option would not be attractive based on the RFP process
the County would use to select an affordable developer.
Affordable Housing Credits – Feedback regarding the affordable housing credit system
included the following:
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o Affordable developers say they have not relied on the ability to sell excess credits
to finance the affordable projects they have worked on. Excess credits are
generally not part of the capital stack when financing these projects. One
affordable developer noted anecdotally that they were aware of another project
on Maui that included a sale of credits as a source of funding, but that the excess
credits were not timely sold and the developer then needed to identify an
alternative source.
o Affordable developers indicated the ability to sell excess credits does not provide
a significant incentive for building affordable units and is generally not a
significant factor for them in moving forward with a project. One affordable
developer indicated a sale of excess credits had contributed to funding general
overhead of their organization in one instance, but that it represented a
comparatively minor amount of funding.
o Some market rate and affordable developers expressed a negative view of the
excess credit system as creating a “cottage industry” or opportunities for “double
dipping” for projects that receive public financing.
o Some affordable developers stated that they have elected not to claim excess
credits they may have been eligible for in some cases. Others indicated the
projects they have worked on had not been eligible for excess credits.
o Two of the market rate developers had experience using purchased credits to
meet a Chapter 11 requirement.
In-Lieu Fee – Affordable developers indicated an in-lieu fee may be a beneficial tool for
financing affordable projects, compared to the current excess credit system, in that it
would provide a source of funds that the County could use to assist projects more
directly by contributing to the upfront cost of development.
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5.0 EFFECTIVENSS OF EXCESS CREDIT SYSTEM
Chapter 11 allows projects that produce extra affordable units beyond the level required by
Chapter 11 to earn “excess credits” that may be used on another project. Purchase of excess
credits has become a typical method for satisfying the requirements of Chapter 11, effectively
emerging as the default compliance option that most projects use.
The concept of the excess credit system is that some projects would be encouraged to provide
more affordable housing than required, knowing they can offset the cost by selling excess
credits to another developer. Affordable developers might also be able to help finance
affordable projects through “equity” created by selling excess credits to market rate developers.
This section evaluates whether, in practice, the system is working as intended.
5.1 Excess Credit Balance
Approximately 1,354 excess credits are in existence according to an audit completed in
February 2023 by the Office of the County Auditor, as summarized in Table 5-1. Credits were
primarily earned by 100% affordable projects during the 2000 to 2010 period. The audit
indicates a total of 1,811 credits were issued, of which 336 credits were applied toward
affordable housing obligations of market rate projects and a net reduction of 121 credits
occurred due to dissolution of pre-awarded credits, leaving an outstanding balance of 1,354
credits at the time the audit was conducted.
Table 5-1: Excess Credit Summary Credits Earned 1,811
Less: Credits Applied to Projects (335.8)
Less: Other Balance Adjustments (1) (121)
Credits Remaining 1,354.2
Source: County of Hawaii, Office of the County Auditor, Office of Housing and Community Development Affordable Housing Credits. Report No. 2023- 01 February 1, 2023. (1) Adjustments were the result of dissolution or seizure of credits that were pre-awarded but affordable units were not built and a commitment to purchase credits that had not yet occurred.
5.2 Pricing of credits
While sales prices are not required to be disclosed, based on transactions where sale prices
have been reported, summarized in Table 5-2, excess credits have sold for an average of
approximately $50,000 per credit. It should be noted that the excess credit transactions
summarized in Table 5-2 occurred between 2005 and 2015. More recent pricing data was not
available or not disclosed. The County is not notified of pricing associated with credit
transactions; however, anecdotally, staff indicate hearing of recent prices closer to $30,000 to
$35,000 per credit.
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Table 5-2. Excess Credit Pricing
No. of Credits Sale Price Price Per Credit Year
12 $900,000 $75,000 2005 12 $600,000 $50,000 n/a
5 $150,000 $30,000 2015
4 $200,000 $50,000 2015
7 $420,000 $60,000 2008 22 $1,210,000 $55,000 2015
8 $62,000 $7,750* 2007
Average: $50,600
* Credits applied to Volcano Fairways Project and may have had a lower value due to geographic location. 5.3 Geographic Area Restriction
Excess credits are required to be used within 15 miles of the project that generated the credits;
however, credits awarded to Department of Hawai’ian Homelands (DHHL) are not subject to this
geographic area restriction. At the time of review, there were no credits available in the Hilo or
Puna areas other than those with no geographic area restriction. In effect, this means projects in
Hilo and Puna must compete for credits with projects in West Hawai’i where market values are
much higher.
5.4 Effectiveness of Excess Credit System
The excess credit system is not serving as an effective tool for producing affordable housing in
Hawai’i County based on the following:
1. Affordable developers are not able to use credits to finance projects – Affordable
developers who participated in the stakeholder interviews indicated that they have not
relied on the ability to sell excess credits to finance their affordable projects. Projects are
generally built with low income housing tax credits and other subsidy sources such as
funds from the State’s Rental Housing Revolving Fund program. KMA reviewed funding
sources for several recent affordable projects proposed on the Big Island and found that
none had identified proceeds from sale of excess credits as a source of funding for
upfront construction, permanent financing, or operating. The Lokahi Kau project, which
generated a large share of the existing credits, is reported to have attempted to use
excess credits as a financing source, but was ultimately unable to do so, and the
resulting financing gap had to be made up through additional State subsidy sources.
2. Weak link between purchase of credits and production of affordable housing. In
the typical case, excess credits were earned over a decade prior to their use. The large
separation of time between generation and use suggests a weak causal link between the
purchase of credits by market rate projects and inducement of the construction of the
affordable units, which often occurred over a decade earlier. A large supply of excess
credits has built up in advance of a need by market rate projects to use the credits. This
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is one indication that affordable projects earning the credits would likely have moved
forward regardless of the ability to sell credits, as they are typically financed through
affordable housing tax credits and other public subsidy sources.
3. Large excess credit balance undercuts effectiveness of Chapter 11 – with over
1,300 excess credits built up over a decade ago, there are enough existing credits to
construct 6,500 market rate units in developments subject to Chapter 11 without building
any additional affordable units10. Chapter 11 will likely have limited effectiveness while
the credit system remains in place.
4. Credits function as a de-facto in-lieu fee that must be negotiated with private
parties – Developers are using the option to purchase excess credits as a de-facto in-
lieu fee they expect to pay to satisfy the requirements of Chapter 11. The difference from
an in-lieu fee is that the amount is opaque and must be negotiated with private parties,
which may add uncertainty for the developer as to how much the Chapter 11 obligation
may cost. There are indications that the market for credits is not functioning in an
efficient or transparent manner as one developer identified a significant brokerage fee
equal to approximately 27% of the purchase price of the credits. Another difference from
an in-lieu fee is that proceeds accrue to private parties who are not required to use the
monies to construct additional affordable housing or to use proceeds locally, as an in-
lieu fee collected by a public agency would be.
In summary, the excess credit system is not serving as an effective mechanism for producing
affordable housing and is likely to constrain the ability of Chapter 11 to produce additional
affordable housing going forward if it remains in its current form.
10 It is possible that geographic restrictions applicable to many of the credits, requiring use within 15 miles of the affordable project that created the credits, would constrain the ability of market rate projects to fully use all of the existing excess credits.
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6.0 FINANCIAL FEASIBILITY ANALYSIS
For the Affordable Housing Policy to be an effective tool for creating affordable housing, it must
not burden new development to such a degree that it renders development financially infeasible.
The financial feasibility analysis evaluates whether residential development projects in Hawai’i
County “pencil” financially with and without affordable housing obligations in place. The purpose
is to help inform potential updates to requirements at an economically sustainable level.
6.1 Context and Limitations of Feasibility Analysis
Before describing the feasibility analysis, it can be helpful to put the analysis into perspective by
summarizing how it can be useful and where limitations exist in its ability to inform longer-term
policy decisions:
a) Prototypical Nature of Analysis – This financial feasibility analysis by its nature can only
provide an overview-level assessment of development economics generally because it is
based on prototypical rather than specific projects. Every project has unique
characteristics that will dictate sale prices or rents supported by the market as well as
development costs and developer return requirements. Each developer will assess the
project’s risk and return and assemble project financing differently. This feasibility
analysis is intended to reflect prototypical projects on Hawai’i Island but it is recognized
that the economics of some projects may look better and some may look worse than
those of the prototypes analyzed.
b) Near Term Time Horizon – This feasibility analysis is a snapshot of real estate market
conditions as of summer / fall 2022. Real estate development economics are fluid and
are impacted by constantly changing conditions with regard to rent potential and sales
prices, construction costs, land costs, and costs of financing, and can be expected to
continue to evolve from the market conditions that prevailed during preparation of this
analysis.
c) Adjustments to Land Costs over Time – Developers purchase development sites at
values that will allow for financially feasible projects. When a workforce housing
requirement is in place, developers “price in” the requirement when evaluating a
project’s economics and negotiating the purchase price for development sites. When
requirements are increased, it is possible that downward pressure on land costs could
result as developers adjust what they can afford to pay for land. This downward pressure
on land prices can to some degree bring costs back into better balance with the overall
economics supported by projects. The potential for adjustments to land costs are more
of a factor in urbanized markets with high demand for scarce development sites.
Unimproved land on Hawai’i Island is transacting at relatively low prices, which suggests
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that land cost adjustments are unlikely to absorb the cost of affordable housing
requirements is most circumstances.
6.2 Residential Market Overview
Building Permit Trends
Over the ten years from 2012 to 2022, an average of approximately 800 new units per year
were issued. The chart below shows the trend by year.
Source: UHERO summary of data from the Hawai’i Dept. of Business, Economic Development, and Tourism
Approximately 55% of new units permitted over the past decade are in either Puna or South
Hilo, while 35% were in Kona or South Kohala. The remaining 10% were distributed amongst
North Hilo, Ka’u, North Kohala, and Hamakua, as show in Table 6-1 and the chart below.
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Table 6-1. Percent of New Units Permitted by Location, 2012-2021
South Hilo 14% Puna 40%
subtotal 55%
South Kohala 12% North Kona 19%
South Kona 4%
35%
North Hilo 1%
Ka'u 4%
Hamakua 2%
North Kohala 3% 10%
Total 100% Source: KMA analysis of Hawai’i County building permit data
Building Permits by Location, 2012-2021
Home Prices
The table and chart below show trends in single family home prices since 2015. Median prices
have increased by an annualized rate of approximately 5% over the period but dropped by
approximately 3% from 2022 to 2023 as interest rates rose.
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Table 6-2. Median Single Family Home Prices
Median Price % Change
2015 $330,400
2016 $330,100 -0.1%
2017 $350,100 6.1%
2018 $362,900 3.7%
2019 $377,900 4.1%
2020 $413,700 9.5%
2021 $480,400 16.1%
2022 $501,000 4.3%
Jan-Sept 2023 $487,000 -2.8%
Source: UHERO, Construction & Housing: Home Resale and Prices Table.
Source: UHERO, Construction & Housing: Home Resale and Prices Table.
Home prices vary significantly by community, with median prices in the East Hawai’i
communities of Hilo, Puna and Hamakua significantly less than prices in Kailua Kona, Waikoloa
Village and Waimea. Prices in resorts on the Kohala coast far exceed medians.
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Source: median home price reported by Redfin as of December 2023.
6.3 Residential Development Prototypes
KMA identified representative residential development prototypes based on recent and pipeline
development projects in Hawai’i County. Prototypes are designed to be representative of
residential units likely to be built on the Big Island.
The residential market on the Big Island reflects a broad range from ultra-luxury resort homes to
far more moderately priced homes. To capture the wide range in conditions, the analysis
reflects analysis of the following seven distinct submarkets:
1. Kailua Kona
2. Kohala Oceanfront
3. Waikoloa Village
4. Waimea
5. Hilo
6. Puna
7. Hamakua
Prototypes representative of units likely to develop in each submarket were identified based on
pipeline projects by location, summarized in Table 6-3.
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Table 6-3. Market Rate Prototypes
No. Description Avg. Unit Size Net Density Avg. Bedrooms Parking
sq. ft. units / acre
Kailua Kona / South Kona
W1 Larger Single Family 2,300 2.2 3.5 Attached garage
W2 Smaller Single Family 1,500 8 3 Attached garage
W3 Attached Condo 1,200 17 2 Surface Lot
Kohala / Oceanfront Resorts
W4 Single Family & Duplex 2,400 3.8 4 Attached garage
W5 Attached Condo 1,400 12 2.25 Surface Lot
W6 Waikoloa Village SFD 1,700 3.6 3 Attached garage
W7 Waimea Single Family 1,750 4.4 3.5 Attached garage
E1 Hilo Single Family 1,700 2 3.25 garage or carport
E2 Puna Single Family 1,200 3.6 3 garage or carport
E3 Hamakua Single Family 1,500 3.6 3 garage or carport
Wa Apartment - West Hawai’i 700 20 1.5 Surface Lot
Ea Apartment - East Hawai’i 700 20 1.5 Surface Lot
Source: Prototype densities and unit sizes based on pipeline development projects in Hawai’i County.
The residential development prototypes were defined based on a review of programmatic
information for projects listed in Table 6-4, which encompasses projects that are proposed,
under construction, approved, or built. A summary of programmatic details for the listed projects
is presented in Appendix B-1.
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Table 6-4. Market Rate Projects Reviewed
Project Name Project Type Location
Cottages on Ali'i Drive Single Family Kailua Kona
Holua Kai at Keauhou Single Family Kailua Kona
New Wainani Estates Single Family Kailua Kona
Kahaolino Single Family Kailua Kona
Alii Drive Condominiums Kailua Kona
Hale Alani, the Shores at Kohanaiki Resort Single Family Kailua Kona
Pualani Makai Multi-family Kailua Kona
Palamanui - Phase 1 of 4 SF and MF Kailua Kona
Kala at Villages at Aina Lea Resort Single Family Kohala Coast
Kupu at Villages at Aina Lea Resort Townhome & Condos Kohala Coast
Ainamalu at Waikoloa Beach Resort Resort Single Family Kohala Coast
Ainamalu Condos at Waikoloa Beach Resort Resort Condo Kohala Coast
Laule'a at Mauna Lani Resort Single Family and attached Kohala Coast
Ka Milo at Mauna Lani Resort Single Family and duplex Kohala Coast
Hapuna Estates Homesites Resort Single Family Kohala Coast
Hapuna Estates Development Pads Resort Home Sites Kohala Coast
KeOlalani Single Family Waikoloa Village
Sunset Ridge Single Family Waikoloa Village
Kumu Hou Single Family, Timeshare, Multi-family Waikoloa Village
Lofts at Waikoloa Apartments Waikoloa Village
Waikoloa Heights Apartments Waikoloa Village
Hanuala Village Single Family Hawi
Waimea Parkside Single Family Waimea
Keaau Village Extension Single Family Hilo / Puna / Keaau
Ainaloa Estates Subdivision Single Family Hilo / Puna / Keaau
Hilo Hillside Single Family Hilo / Puna / Keaau
Puainako Heights Single Family Hilo / Puna / Keaau
6.4 Estimated Market Rate Home Prices
To estimate market pricing for prototype for-sale units, KMA reviewed data on home sales
occurring from July 2021 to June 2022. In addition, KMA reviewed asking prices for new units
being marketed for-sale. The sales data and the estimated market prices for the prototype
projects is presented in Chart 1, 2 and 3. Chart 1 presents sales data for single family homes in
Kailua-Kona, Kohala, Waikoloa Village and Waimea. Chart 2 presents sales data for units with
condominium ownership in the same communities. Chart 3 presents the sales data for Hilo,
Puna and Hamakua.
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Chart 1 - West Hawai’i Single Family Home Sales by Location and
Estimated Pricing of Market Rate Prototype Units
Sources: Redfin sales for July 2021 to June 2022
Chart 2 - West Hawai’i Condominium / Attached Unit Sales by Location and
Estimated Pricing of Market Rate Prototype Units
Sources: Redfin sales for July 2021 to June 2022
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Chart 3 – Hilo, Puna and Hamakua Newer Home Sales and
Estimated Pricing of Market Rate Prototype Units
Sources: Redfin sales from July 2021 through June 2022 for homes built since 2012 on lots less than three acres
The sales data formed the basis for KMA’s price estimates. Table 6-5 summarizes the
estimated for-sale prototype pricing based on the market data.
Table 6-5. For-Sale Prototype Price Estimates
No. Description Avg. Unit Sq. Ft. Market Pricing $/SF
Kailua Kona / South Kona
W1 Larger Single Family 2,300 $1,541,000 $670
W2 Smaller Single Family 1,500 $1,050,000 $700
W3 Attached Condo 1,200 $720,000 $600
Kohala / Oceanfront Resorts
W4 Single Family & Duplex 2,400 $3,120,000 $1,300
W5 Attached Condo 1,400 $1,470,000 $1,050
W6 Waikoloa Village SFD 1,700 $1,050,000 $618
W7 Waimea Single Family 1,750 $1,000,000 $571
E1 Hilo Single Family 1,700 $725,000 $425
E2 Puna Single Family 1,200 $390,000 $325
E3 Hamakua Single Family 1,500 $630,000 $420
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6.5 Estimated Market Rate Rents
KMA estimated market rents for newer and recently renovated rental properties based on data
available through CoStar, Apartments.com and Zillow. Data for only three market rate rental
communities either built or renovated since 2015 was available, including:
Lofts at Waikoloa, 108 units, built in 2021, Waikoloa Village;
Hale Kaloko, 120 units, built in 1994 and renovated 2015, Kailua Kona; and
75-5749 Alahou St, 25 units, Building 1 built 2012, Building 2 built 2018, Kailua Kona.
The three properties are in Waikoloa Village and Kailua Kona. Rents are identified in Chart 4,
with each point representing the average rent for a particular project and bedroom size.
Chart 4 – Monthly Asking Rents for Apartment Properties
Built or Renovated Since 2015
Source: CoStar, Apartments.com
No new market rate apartments were identified in the Hilo and Puna areas. Therefore KMA
drew on listings for older existing units, as summarized in Appendix Table B-6.
Based on these rent comparables, KMA estimates the average monthly rent for the West
Hawai’i apartment prototypes to be in the range of $2,950 per month or approximately $4.21 per
square foot per month and the East Hawai’i prototype apartment to be in the range of $2,000
per month or $2.86 per square foot per month. Rental market data supporting these estimates
are presented in Appendix Table B-6. Rent estimates are summarized in Table 6-6.
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Table 6-6. Prototype Rent Estimates
Average
Unit Size
Market Rate
Monthly Rent
Market Rate
Rent $/SF
West Hawai’i Apartment 700 sq. ft. $2,950 $4.21 /SF/Mo
East Hawai’i Apartment 700 sq. ft. $2,000 $2.86 /SF/Mo
6.6 Affordability of Market Rate Prototypes
Chart 5 shows the estimated percentage of area median income a household would need to
afford market prices and rents for the prototypical market rate units. All prototypes in West
Hawai’i require an income over 140% of AMI to afford. Prototype market rate units in Hilo, Puna,
and Hamakua are affordable to households with incomes from 89% to 165% of AMI depending
on the prototype. Estimates are based on 2023 affordable pricing published by the County.
Chart 5 Affordability of Market Rate Prototypes and Rents Estimated Percent of Area Median Income Required to Afford Market Price
6.7 Financial Feasibility Analysis Approach
The financial feasibility analysis estimates the cost to develop a new market rate residential
project and the sales revenues or rental income generated upon completion. If the sales
revenues or rental income are sufficient to support the development costs and a return to the
developer, the prototype is considered feasible. This approach to financial feasibility, known as
a pro forma approach or income approach, is standard practice in the real estate industry and is
utilized in one form or another by virtually all developers when analyzing new construction
projects.
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This analysis organizes the pro forma as a “residual land value analysis”, meaning the pro
forma solves for what the project can afford to pay for a development site based on the
sales/income projections and the non-land acquisition costs of the project. It then compares the
residual land values with land costs in the current market to test whether developers can afford
to buy land and develop projects.
The analysis evaluates feasibility both with and without compliance with Chapter 11 affordable
housing requirements and potential alternative affordable housing requirements.
Pro forma tables identifying the revenues, costs, and supported land values for each
prototypical residential development project analyzed are included in Appendix Tables A-1 to A-
7. The following sections describe the assumptions utilized in the analysis and the conclusions
drawn therefrom.
6.8 Development Cost Estimates
The direct costs of development include all contractor labor and material costs to construct the
project including general requirements, contractor fees, and contingencies. Direct construction
costs for the for-sale prototypes range widely depending on the size, type of unit and market. At
the low end, smaller single family homes in Hilo and Puna are estimated to have a direct
construction cost of $306,000 ($255/SF for a 1,200 sf unit). At the high end, resort homes on the
Kohala coast are estimated to have a direct construction cost of $1.3 million ($560/SF for a
2,400 sf unit). For the apartment, direct construction costs are estimated at $220,000 per unit
($315/sf for a 700sf average unit size). These amounts represent direct vertical construction
costs only, not including land, site improvements, permits and fees, financing, design and
engineering, or other indirect costs. Homes in resort areas and higher-priced submarkets such
as Kailua Kona are assumed to have higher quality materials, finishes and appliances. Wood
frame construction is assumed for all prototypes. Estimates reflect local cost information
provided by developers and industry professionals active in the market, cost data reported in
201H applications, and third-party construction data sources such as Marshall and Swift.
Indirect costs of development include architecture and engineering (A&E) costs, fees and
permits costs, taxes, insurance, overhead, debt financing costs, etc. Fees and permit cost
estimates include fair share fees, bonding, water and electric connection charges, inspection,
and subdivision fees. Total indirect costs are estimated to range from roughly $84,000/unit to
$268,000/unit depending on the prototype.
The analysis evaluates development of raw or partially improved land requiring internal street
and utility improvements prior to home construction. Accordingly, site and in-tract improvement
costs are included at an estimated cost ranging from approximately $60,000 per unit for the
apartment prototype to $390,000 for luxury resort homes on the Kohala coast.
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See the tables in Appendix A for additional details on development cost estimates.
6.9 Sales Revenue and Supported Rental Unit Values
Pricing and rent estimates are summarized in Table 6-5 and 6-6 and reflect the market data
summarized above and in Appendix B. For the apartment prototypes, rental income is translated
into an estimate of supported developer investment. Rents are estimated at $2,950/unit/month
($4.21/sf/mo.) and $2,000/unit/month ($2.86/sf/mo.) for the apartment prototypes in West and
East Hawai’i, respectively, each with an average unit size of 700 square feet. As shown on
Appendix A Table 4A, after a vacancy factor, operating expenses, and property taxes, the net
operating income (NOI) for market rate apartments units is estimated at $23,900 /unit/year in
West Hawai’i and $13,070 in East Hawai’i. A threshold developer return on cost requirement of
5.6% is assumed based on capitalization rates for recent multi-family sale transactions in
Hawai’i, the pro forma capitalization rate identified for a proposed apartment project, plus a
spread to account for developer profit. Dividing NOI by the required return on cost yields the
warranted private investment in the project estimated at $427,000 per unit in West Hawai’i and
$233,000 per unit in East Hawai’i.
6.10 Residential Land Sales
KMA reviewed residential land sales using data from Costar, a third party vendor of market data,
listings for development sites, and lot sales accessed through Redfin. Redfin lots sales are
presented in a series of charts in Appendix B-7, the CoStar land sales are presented in Appendix
B-8. The data indicates that land in a raw or partially improved condition typically trades for $5
per square foot or less and generally under $1 per square foot for larger parcels in raw condition.
Buildable lots typically sell in the range of $300,000 to $500,000 in Kailua Kona, $150,000 to
$400,000 in Waimea and Waikoloa Village, under $300,000 in Hilo, under $200,000 in
Hamakua, and under $100,000 in Puna. High quality or large-acreage lots can sell for a
premium over these ranges. Lots with ocean frontage and access to resort amenities can sell
for well over $1 million.
Since, the feasibility analysis assumes that residential development sites are acquired in a raw
or partially improved condition, residential prototypes are considered feasible if the supported
land value falls in the range of raw or partially improved residential land. The following land cost
assumptions for an unimproved site are used in evaluating feasibility of the prototype projects
based on the market data presented in Appendix B. The resort land cost assumes a
development site with no ocean frontage in an established resort that requires in-tract
improvements.
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Kailua-Kona ~$5 PSF of Land
Kohola Resort ~$15 PSF of Land
Waikaloa Village and Waimea ~$2 PSF of Land
Hilo, Puna, Hamakua ~$1 PSF of Land
6.11 Feasibility Conclusions
The financial feasibility analysis is based on the relationship between the project’s revenue
potential, the estimated development costs, and a developer profit commensurate with the
development risk. The residual land value approach, described earlier in this section, produces
a residual value that each prototype can afford to pay to acquire a site. If the residual value
exceeds the cost to acquire a site for development, the prototype is generally determined to be
feasible. If the residual value is less than the cost to acquire and prepare the site, feasibility
conditions will need to improve before the project can become feasible, for example through
higher sales prices. As mentioned previously, some projects can be expected to have
economics that are somewhat better or somewhat worse than the “typical” prototype projects
analyzed.
The residual land values are derived by subtracting the development costs before land
acquisition from the net sales revenues (with for-sale prototypes) or net project value/ supported
investment (for the rental prototypes).
(1) Base Case Feasibility Findings, Compliance with Chapter 11 Using Purchased Credits
Table 6-7 summarizes the feasibility analysis findings including the sales price, development
cost, residual land value, and feasibility conclusions for each prototype.
Residential projects in Kailua Kona, Kohala, Waikoloa, and Waimea were found to be feasible
based on supported land values that are generally adequate to support the estimated cost of a
development site. Attached condominium units in Kailua Kona are an exception where feasibility
is more challenged. This finding is consistent with the development pipeline information
summarized in Table 6-4, which includes just one small six-unit condo project in Kailua Kona.
Residential projects in Hilo, Puna and Hamakua were found to be infeasible or have more
challenging feasibility based on estimated development costs that exceed sales prices and
supported private investment, resulting in a negative supported land value. This indicates that
developers are not likely to be able to attract investment capital for projects in these locations,
especially for projects requiring significant infrastructure or intract street improvements.
However, individual owners and small builders may still pursue projects, especially when
building on an existing buildable lot or in locations within the submarket able to support higher
pricing.
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Table 6-7 Feasibility Analysis Summary, Base Case with Existing Chapter 11 and Use of Purchased Credits
Prototype Residential Project
Average Living Area (sq.ft.)
Sale Price or Supported Investment
Total Development Cost (1)
Supported Land Value Per Unit (2)
Supported Land Value Per SF Land (2) Feasibility Conclusion
W1 Kailua Kona Single Family, Larger 2,300 $1,541,000 ($1,369,600) $171,400 $7 Feasible
W2 Kailua Kona Single Family, Smaller 1,500 $1,050,000 ($996,600) $53,400 $8 Feasible
W3 Kailua Kona Attached Condo 1,200 $720,000 ($727,200) ($7,200) ($2) Infeasible
W4 Kohala Resort Single Family 2,400 $3,120,000 ($2,775,500) $344,500 $24 Feasible
W5 Kohala Resort Attached Condo 1,400 $1,470,000 ($1,332,700) $137,300 $30 Feasible
W6 Waikoloa Single Family 1,700 $1,050,000 ($980,700) $69,300 $5 Feasible
W7 Waimea Single Family 1,750 $1,000,000 ($971,000) $29,000 $2 Feasible
E1 Hilo Single Family 1,700 $725,000 ($775,400) ($50,400) ($2) Infeasible
E2 Puna Single Family 1,200 $390,000 ($602,800) ($212,800) ($14) Infeasible
E3 Hamakua Single Family 1,500 $630,000 ($752,700) ($122,700) ($10) Infeasible
Wa West Hawai'i Market Rate Rental 700 $427,000 ($376,500) $50,500 $19 Feasible
Ea East Hawai'i Market Rate Rental 700 $233,000 ($376,300) ($143,300) ($55) Infeasible (1) Average development cost per unit including site / in-tract streets. With for-sale projects, development costs are inclusive of developer profit and cost of sale. (2) Reflects residual land value for unimproved or partially improved sites that require grading, utilities, and in-tract streets for development to occur.
Feasible / More Likely to Develop
Marginal / Weaker Feasibility
Infeasible / Less Likely to Develop
(2) Testing of Alternative Requirements
The pro forma analysis was used to test a series of alternatives regarding affordable housing
requirements, including:
Table 6-8. Scenarios Evaluated
Scenario Description
1 Credits (base case) Purchase excess credits to satisfy Chapter 11, a typical compliance approach.
2 No Requirement If Chapter 11 does not apply
3a On-Site Affordable, Mix A 13.5% affordable units with mix of units from 80% to 140% AMI in for-sale projects and 60%
to 120% in rental projects. Mixed income assumed, not a stand-alone LIHTC project. This
mix is sufficient to earn the 20% credits required to comply with the existing Chapter 11.
3b On-Site Affordable, Mix B 10% affordable units FS units at 80% AMI; R units at 60% AMI. Mixed income assumed,
rather than a stand-alone LIHTC project. This mix is sufficient to earn the 20% credits
required to comply with the existing Chapter 11.
4a In-lieu Fee of $5/SF Analysis evaluates feasibility with a potential in-lieu fee, which is not currently an option
under Chapter 11. The fee is assumed to be calculated based on square feet of habitable
space in the entire project. See also Appendix A Tables 3D and 4D for analysis of additional
in-lieu fee alternatives.
4b In-lieu Fee of $10/SF
4c In-lieu Fee of $15/SF
4d In-lieu Fee of $20/SF
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In addition to the above scenarios, KMA evaluated the option to dedicate a site for an affordable
project or to provide a site within the development for a stand-alone LIHTC development. Costs
were estimated to be approximately the same as the option to purchase credits, resulting in
similar feasibility findings to Scenario 1. See Appendix A Table 7.
Table 6-9 presents the results of the feasibility testing for the above scenarios.
Table 6-9. Summary of Feasibility Scenario Testing
Residual Land Value Supported ($PSF of land) (1) (2)
Scenario 1 2 3a 3b 4a 4b 4c 4d
Credits No Rqrm’t
On-Site Units (3) In-Lieu Fee ($/NSF in Project)
Prototype Project Mix A, 13.5% affordable Mix B, 10% affordable $5 $10 $15 $20
W1 Kailua Kona Single Family, Larger $7 $7 $2 $3 $7 $6 $6 $5
W2 Kailua Kona Single Family, Smaller $8 $9 ($1) $1 $8 $7 $6 $5
W3 Kailua Kona Attached Condo ($2) $1 ($11) ($10) ($1) ($3) ($5) ($7)
W4 Kohala Resort Single Family (4) $24 $24 $19 $19 $24 $23 $22 $21
W5 Kohala Resort Attached Condo (4) $30 $33 $22 $23 $31 $29 $28 $26
W6 Waikoloa Single Family $5 $5 $1 $1 $5 $4 $4 $3
W7 Waimea Single Family $2 $3 ($2) ($1) $2 $2 $1 $0
E1 Hilo Single Family ($2) ($1) ($3) ($3) ($2) ($2) ($2) ($3)
E2 Puna Single Family ($14) ($14) ($14) ($14) ($14) ($14) ($15) ($15)
E3 Hamakua Single Family ($10) ($9) ($11) ($11) ($10) ($10) ($11) ($11)
Wa West Hawai'i Market Rate Rental(4) $19 $22 $9 $9 $21 $20 $18 $17
Ea East Hawai'i Market Rate Rental ($53) ($49) ($53) ($55) ($50) ($51) ($53) ($54)
(1) Reflects residual land value prior to improvements such as grading, utilities, and in-tract streets.
(2) See Appendix A for supporting analysis. (3) Analysis based on on-site units in mixed income project without outside subsidies such as LIHTC. (4) For resort projects, off-site for-sale units are assumed in the case of Scenarios 3a and 3b. (5) With on-site units, supported land value for the apartment prototype still exceeds the identified thresholds; however, due to the significant decrease in supported land value, the feasibility finding is still classified as marginal.
Feasible / More Likely to Develop Marginal / Weaker Feasibility Infeasible / Less Likely to Develop
Key Findings Are:
(1) Chapter 11 is not a major driver of feasibility challenges. Comparing scenarios 1
and 2 shows that feasibility conditions would not be altered by a repeal of Chapter 11 for
any project type or submarket. While there is evidence of feasibility challenges to
residential development on the Big Island, Chapter 11 is not the driver of these
challenges. This is because the Chapter 11 requirement, in its current form, can be
satisfied for an estimated cost of approximately $10,000 per unit through purchase of
Excess Credits, which represents a relatively minor component of total development
costs that equates to approximately 1% of total development costs for West Hawai’i
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residential prototypes, 2% for East Hawai’i and 2.7% for the apartment prototypes.
Fundamentally, feasibility challenges are driven by an imbalance between high
development costs and home values and the housing costs local buyers can afford. This
is consistent with feedback received during the developer stakeholder interviews, which
did not implicate Chapter 11 as the major impediment to feasibility.
(2) Feasibility in Hilo, Puna and Hamakua is challenging. The market rate prototype
projects do not “pencil” in this area. Although building permit data shows that
development activity is still occurring, anecdotally it appears to be driven primarily by
smaller projects on existing lots without a need for construction of internal streets and
utilities, in contrast to the prototypical project addressed in the feasibility analysis, which
assumes a subdivision requiring rezoning (thus triggering Chapter 11).
(3) New market rate units in Hilo, Puna, and Hamakua are either within or near to the
income ranges Chapter 11 serves (140% of AMI and below). This suggests
encouraging more market rate production in these areas would help meet the
affordability goals reflected in the program.
(4) Mandating affordable unit production would impact feasibility. Comparing Scenario
1 (excess credits) to Scenarios 3a and 3b (on-site units), indicates projects that are
currently feasible assuming compliance through purchase of excess credits could be
downgraded to marginally feasible or infeasible if on-site affordable units were required
in a mixed-income inclusionary format. Resort projects on the Kohala coast were an
exception for which an affordable unit production requirement was found to be
supported. This suggests that if the excess credit system were to be modified to limit the
availability of this compliance option, then the on-site requirement would need to be
reduced or an alternative compliance option such as an in-lieu fee would need to be put
in place to avoid constraints on feasibility.
(5) Supportable In-Lieu Fees – The analysis indicates that projects in Kailua Kona,
Kohala, and Waikoloa Village could sustain an in-lieu fee of up to $20 per livable square
foot in the entire project (i.e. all units, not just the affordable). Projects in Waimea are
estimated to sustain an in-lieu fee of up to $10 per square foot. Projects in Hilo, Puna,
and Hamakua would not support an in-lieu fee based on feasibility challenges even with
no requirement.
6.12 Cost to Comply With Affordable Housing Requirements Under Each Scenario
KMA estimated the cost for each residential project type to comply with the alternative
affordable housing requirements on a per unit and per square foot basis. The analysis uses the
pro forma analysis described in the preceding sections to estimate the net impact of affordable
housing requirements on project economics. Estimates are summarized in Table 6-10. Figures
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represent the cost of affordable housing obligations spread across all units in the project (not
just affordable units).
As shown, the option to purchase credits represents a cost of approximately $10,000 per unit or
between $4.33 and $14.43 per square foot depending on the project type. Including affordable
units on-site represents a much greater cost than purchasing excess credits, which explains
why recent projects have been electing to purchase credits.
Table 6-10. Net Cost of Compliance with Affordable Housing Requirements (1)
Scenario 1 3a 3b 4a 4b 4c 4d
Purchased Credits
On-Site Units (2) In-Lieu Fee ($/NSF in Project)
Mix A, 13.5% affordable
Mix B, 10% affordable $5 $10 $15 $20
A. Compliance Cost Per Unit in Project
W1 Kailua Kona Single Family, Larger $10,260 $126,260 $101,360 $11,880 $23,760 $35,640 $47,520
W2 Kailua Kona Single Family, Smaller $10,300 $71,300 $60,300 $7,730 $15,480 $23,230 $30,980
W3 Kailua Kona Attached Condo $10,400 $38,000 $34,900 $6,220 $12,420 $18,620 $24,820
W4 Kohala Resort Single Family $10,400 $85,700 $72,500 $12,450 $24,850 $37,250 $49,640
W5 Kohala Resort Attached $10,300 $45,700 $42,000 $7,250 $14,480 $21,710 $28,940
W6 Waikoloa Single Family $10,400 $71,300 $60,300 $8,820 $17,610 $26,390 $35,170
W7 Waimea Single Family $10,300 $63,400 $54,800 $9,040 $18,080 $27,120 $36,160
E1 Hilo Single Family $10,300 $33,000 $32,100 $8,800 $17,580 $26,360 $35,140
E2 Puna Single Family $10,300 $2,000 $4,000 $6,180 $12,380 $18,580 $24,780
E3 Hamakua Single Family $10,400 $22,500 $24,200 $7,790 $15,540 $23,280 $31,030
Wa West Hawai'i Market Rate Rental $10,000 $37,000 $36,000 $3,830 $7,450 $11,060 $14,680
Ea East Hawai'i Market Rate Rental $10,100 $11,100 $16,100 $3,660 $7,280 $10,890 $14,510
B. Compliance Cost Per Square Foot in Project
(figures below are above the nominal fee amount due to addition of construction loan interest)
W1 Kailua Kona Single Family, Larger $4.46 $54.90 $44.07 $5.17 $10.33 $15.50 $20.66
W2 Kailua Kona Single Family, Smaller $6.87 $47.53 $40.20 $5.15 $10.32 $15.49 $20.65
W3 Kailua Kona Attached Condo $8.67 $31.67 $29.08 $5.18 $10.35 $15.52 $20.68
W4 Kohala Resort Single Family $4.33 $35.71 $30.21 $5.19 $10.35 $15.52 $20.68
W5 Kohala Resort Attached Condo $7.36 $32.64 $30.00 $5.18 $10.34 $15.51 $20.67
W6 Waikoloa Single Family $6.12 $41.94 $35.47 $5.19 $10.36 $15.52 $20.69
W7 Waimea Single Family $5.89 $36.23 $31.31 $5.17 $10.33 $15.50 $20.66
E1 Hilo Single Family $6.06 $19.41 $18.88 $5.18 $10.34 $15.51 $20.67
E2 Puna Single Family $8.58 $1.67 $3.33 $5.15 $10.32 $15.48 $20.65
E3 Hamakua Single Family $6.93 $15.00 $16.13 $5.19 $10.36 $15.52 $20.69
Wa West Hawai'i Market Rate Rental $14.29 $52.86 $51.43 $5.47 $10.64 $15.80 $20.97
Ea East Hawai'i Market Rate Rental $14.43 $15.86 $23.00 $5.23 $10.40 $15.56 $20.73
Notes: (1) Reflects the effective net cost of complying with Chapter 11 expressed as an amount per unit or per square foot in the entire project. Figures reflect an average across *all* units in the project (market rate + affordable). Amounts are computed based on the pro forma analysis and reflect the net impact on the pro forma of the identified requirement as compared to no requirement.
(2) Resort prototypes are assumed to provide affordable for-sale units in an off-site location.
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Table 6-11. provides an estimate of the net cost per provided affordable unit, assuming
affordable units are provided in a mixed income inclusionary format without tax credits or other
subsidy sources to offset the cost, and affordable units are of comparable size, bedroom count,
and unit type as market rate units, except resort projects which are assumed to provide units
off-site. The cost varies depending on the affordability level of the unit in the project. Figures are
calculated based on the net impact on the pro forma per affordable unit that is provided. Costs
are greater for prototype projects where market rate unit prices and rents are higher because
the gap between market rate and affordable prices and rents is higher.
Table 6-11. Net Cost Per On-Site Affordable Unit forgone sales price / project value with affordable units in mixed income project without LIHTC or other subsidies
60% AMI 80% AMI 100% AMI 120% AMI 140% AMI
W1 Kailua Kona Single Family, Larger not tested $1,014,000 $936,000 $858,000 $780,000
W2 Kailua Kona Single Family, Smaller not tested $603,000 $528,000 $453,000 $378,000
W3 Attached Condo not tested $349,000 $281,000 $214,000 $146,000
W4 Kohala Resort Single Family (1) not tested $725,000 $635,000 $545,000 $455,000
W5 Kohala Resort Attached Condo (1) not tested $420,000 $338,000 $257,000 $176,000
W6 Waikoloa Single Family not tested $603,000 $528,000 $453,000 $378,000
W7 Waimea Single Family not tested $548,000 $470,000 $392,000 $314,000
E1 Hilo Single Family not tested $321,000 $245,000 $169,000 $93,000
E2 Puna Single Family (2) not tested $40,000 $0 $0 $0
E3 Hamakua Single Family not tested $242,000 $167,000 $92,000 $17,000
Wa West Hawai'i Market Rate Rental $360,000 $280,000 $190,000 $110,000 not tested Ea East Hawai'i Market Rate Rental (2) $161,000 $81,000 $0 $0 not tested
(1) Resort prototypes are assumed to provide affordable for-sale units in an off-site location.
(2) Cost of on-site units calculates as zero where market prices are rents are less than or equal to affordable sales prices and rents.
If affordable units were instead provided in a standalone affordable project that receives tax
credits and other subsidy sources, the net subsidy required of the developer would be less than
estimated in Table 6-11; however, not all projects will have the scale to deliver affordable units
in a standalone LIHTC affordable project.
Table 6-12 identifies the on-site affordable unit percentages that are estimated to be equivalent
in cost to recommended in-lieu fee ranges identified in Table 1-1. Calculations assume units are
dispersed throughout the development, except resort projects are assumed to provide off-site
for-sale units. Based on this analysis, most projects would likely elect to pay an in-lieu fee to the
extent that option is made available, unless other incentives are included to induce projects to
provide units on-site.
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Table 6-12. On-Site Affordability Percentages Equivalent in Cost to Recommended In-Lieu Fee Ranges
AMI Level of Unit 60% AMI 80% AMI 100% AMI 120% AMI 140% AMI
lower or upper end of fee range Lower Upper Lower Upper Lower Upper Lower Upper Lower Upper
Kailua Kona Single Family, Larger 1.1% 2.3% 1.2% 2.5% 1.3% 2.7% 1.5% 3.0%
Kailua Kona Single Family, Smaller 1.2% 2.5% 1.4% 2.8% 1.7% 3.3% 2.0% 4.0% Kailua Kona Attached Condo 1.7% 3.4% 2.1% 4.3% 2.8% 5.6%
Kohala Resort, Single Family 5.0% 8.3% 5.7% 9.4% 6.6% 11.0% 7.9% 13.2%
Kohala Resort, Attached Condo 5.0% 8.3% 6.2% 10.4% 8.2% 13.6%
Waikoloa Single Family 1.4% 2.8% 1.6% 3.2% 1.9% 3.8% Waimea Single Family 1.6% 3.2% 1.9% 3.7% 2.2% 4.5%
West Hawai'i Market Rate Rental 1.0% 1.9% 1.3% 2.5% 1.8% 3.7% 3.2% 6.4%
See also Appendix Table A-2, which expresses compliance costs as a percentage of the total
development cost in the Project.
6.13 Economics of Increased Density
Allowing additional residential density or reducing minimum lot sizes can be a beneficial way to
improve project feasibility, help offset the cost of affordable housing requirements, or incentivize
projects to include affordable units rather than use another compliance alternative. Chapter 11
currently allows a modest 10% density bonus for projects that include affordable units within the
project or that provide buildable lots at an affordable price.
Increasing density can result in savings on land, infrastructure, and site improvement costs on a
per unit basis. Appendix A Table 3F tests the pro forma with an illustrative 20% increase in
prototype density to assist in evaluating whether added density could improve feasibility. The
test indicates a positive effect on feasibility across all project types, based on the simplifying
assumption that projects are able to take advantage of increased density to spread horizontal
costs across a larger number of residential units, decreasing costs on a per unit basis. The
reality is that the tradeoffs of adding density can be more complex than assumed in this simple
illustration and can vary from project to project. For example, vertical construction costs may
increase if there is a change in construction type and pricing that is achievable may be reduced
somewhat on account of reduced lot sizes. The feasibility analysis indicates that attached units
in Kailua Kona have more challenging feasibility than single family detached units, an indicator
that there are limits to feasibility benefits of allowing additional density.
In reviewing the County’s zoning map, residential zoning categories requiring minimum building
site sizes of 7,500 or 10,000 square feet are prevalent, equivalent to approximately four to six
dwelling units per acre. These minimum building site sizes would not permit higher density
single family detached and attached formats, which can easily exceed these common maximum
allowable densities. Two of the Kailua Kona market rate prototypes have densities exceeding
the typical allowable lot sizes, at 5,400 and 2,500 square feet. We understand the County is
currently engaged in a process of updating the code sections that establish these minimums.
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While high construction costs and availability of water are likely more influential, minimum
building site sizes may contribute to feasibility challenges in some instances or lead to higher
costs per unit in other instances. Reducing minimum building site sizes in appropriate locations
would likely be helpful in encouraging market rate housing production.
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7.0 INCENTIVE-BASED APPROACHES
Housing development incentives are a tool that local jurisdictions can use to encourage the
development of affordable housing by helping to offset the cost of providing affordable units.
Regulatory incentives modify land use regulations or development standards in a manner that
provides value to a development, usually by increasing the number of units that can be built, or
by reducing the costs of construction, or both. Financial incentives directly or indirectly fund or
reduce development or operating costs. Examples include:
Density Bonuses allow more units than would otherwise be permitted in conjunction with
the provision of affordable units or other community benefits.
Flexible Development Standards, such as setbacks, can allow more units to be built on a
site and can enable projects to move forward on otherwise undevelopable sites.
Reduced Parking Requirements can reduced costs and increase the number of housing
units that can be accommodated on a site.
Accelerated Approvals move projects through key regulatory phases more quickly,
decreasing costs and risk.
By-Right Development allows eligible housing developments that comply with existing
development regulations to be built without discretionary approval.
Fee Waivers exempt projects from a variety of fees, such as development impact fees.
Property tax abatements allow developers to reduce on-going expenses, which frees up
cash flow and improves returns.
The State’s 201H-38 program provides several of the incentives listed above to projects that
include more than 50% affordability.
7.1 Incentives Provided Through Inclusionary Programs
A 2021 survey by Grounded Solutions Network covering 681 inclusionary programs in the U.S
found that over half offered a density bonus. Other common incentives included zoning,
development and design standard modifications, and parking requirement reductions. Less
common incentives included fee waivers and reductions, expedited processing, property tax
abatements, and direct public subsidy. Approximately 35% of programs offer multiple types of
incentives while 29% of programs do not offer any incentives. The chart below summarizes the
report’s findings.
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Percent of Inclusionary Programs Offering Incentives of Various Types
Source: Grounded Solutions Network, Inclusionary Housing in the United States, 2021
An understanding of local constraints on development is important for identifying which
incentives will be most useful. For example, if development in a jurisdiction is not constrained by
allowable density, a density bonus program would not tend to provide an incentive. The
following sections provide a discussion of incentive-based approaches primarily drawn from
third party sources such as the Housing Affordability Toolkit.11
7.2 Density Bonus
A density bonus program allows more units of housing to be built on a site than would be
allowed under existing zoning, in exchange for a developer’s provision of affordable units (or
other community benefits). The concept is that the additional value created through the bonus
helps offset the cost of providing the affordable housing. An ability to modify other development
standards, such as setbacks or height limits, may be necessary for the additional density to
actually be achievable.
Hawaii County’s Chapter 11 provides a 10% density bonus to projects that fulfill affordable
housing requirements on or off-site. Our understanding is that this provision has not been
frequently utilized. This may be driven by a variety of factors such as availability of less costly
alternatives under Chapter 11 like affordable housing credits, because a 10% density bonus
may not be significant enough to offset the cost of providing affordable units, because density
11 Incentive details and example programs drawn from The Housing Affordability Toolkit (National Multifamily Housing Council) and Local Housing Solutions, 2023.
57%
24%
17%13%11%
6%4%3%
29%
0%
10%
20%
30%
40%
50%
60%
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limits are not a primary constraint for most projects, or because only projects undergoing a
rezoning are subject to Chapter 11, and therefore are able to achieve the desired density
through the zoning change, with no need for a density bonus.
A. Examples
California Density Bonus Law
California’s state density bonus law provides a package of incentives for projects that provide
affordable units onsite including a density bonus, reduced parking requirements, and an ability
to request concessions and waivers to modify other regulatory requirements.12
Projects must include one of the following to qualify for the density bonus:
o 5% or more very low-income units.
o 10% or more lower income units.
o 10% or more moderate for-sale attached units.
o Additional options to qualify include transitional housing, student housing, senior
housing, mobile home park restricted seniors, and land dedication.
The density bonus is on a sliding scale depending on the percentage and income level
of the affordable units, as summarized in the table below, which shows selected
examples rather than a comprehensive presentation of all options under the program.
Table 7-1. Density Bonus Scale, California Density Bonus Law, Selected Levels
Affordable% (1)
Density Bonus Eligibility
For Very Low Units (up to 50% AMI) For Low Income Units (up to 80% AMI) For Moderate Income Units 5% 20% none none 10% 32.5% 20% 5% 20% 50% 35% 15% 40% 50% 50% 35% 100% 80% 80% 80%
(1) Calculated without including bonus units, which are allowed to be all market rate.
Source: Meyers Nave, Guide to the California Density Bonus Law, 2023.
Affordability percentages are calculated without inclusion of the bonus units, which may
be all market rate.
Qualifying projects are also eligible for one or more “incentives” or “concessions”. The
number of incentives or concessions is based on the percentage of affordable units.
Concession or incentives can include a modification of development standards like
setbacks or other modifications to regulations that reduce project costs.
12 Meyers Nave, Guide to the California Density Bonus Law, 2023.
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If a development standard would prevent the project from being built with the density
bonus or prevent use of the concessions and incentives, the developer can request a
waiver or reduction in the standard.
Maximum parking requirements apply and are further reduced to no parking required, or
0.5 space required per unit for projects within ½ mile of a major transit stop for projects
meeting on-site affordable minimums.
100% Affordable Projects are eligible for an 80% density bonus. If located within a half
mile of a major transit stop, maximum density limits don’t apply to the project and the
project may receive a height increase of up to 3 additional stories or 33 feet.
San Diego, CA, 100% Affordable Density Bonus
San Diego offers two affordable housing density bonus incentives for 100% affordable projects
similar to those available under California state law.
100% Affordable Other than Bonus Units – To be eligible under this program, a
development must set aside 100% of the pre-density bonus units as affordable to very
low-, low-, and moderate-income households (with no more than 20% moderate).
Additional affordability requirements apply to bonus units. Eligible projects receive the
following:
o Within Transit Priority Areas:
˗ Unlimited density,
˗ An additional 3 stores or 33 feet in height, and
˗ Five incentives.
o Outside Transit Priority Areas:
˗ 80% density bonus, and
˗ Five incentives.
100% Affordable (Total Project) – To be eligible under this program, a development must
be located within a Transit Priority Area and must set aside 100% of the total dwelling
units in the development as affordable to very low-, low-, and/or moderate-income
households in any combination. In exchange, developments opting into this density
bonus program receive the following:
o Unlimited density,
o An additional 3 stories or 33 feet in height, and
o Five incentives.
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Montgomery County, Maryland
Montgomery County’s inclusionary housing program requires 12.5% of all new residential units
be affordable. Projects that set aside 15% of units are eligible for the County’s density bonus
program. Under this program, developers can build up to 20% more floor area than would
otherwise be allowed under local zoning.
B. Considerations
Density bonuses are not always valuable nor do they automatically offset the cost of providing
affordable housing. The value depends on location, building type, local development economics,
requirements that apply without the density bonus, the amount of density provided, and whether
additional regulatory flexibility is built in to ensure the additional density can actually be utilized.
While higher densities can make projects more feasible, if adding density results in a transition
to a higher cost building type, added costs can offset some or all of the value of the density
bonus. Circumstances where density bonuses can be most beneficial to project feasibility
include:
1) Where infrastructure costs are high, and the bonus allows them to be spread among
more units.
2) Where land values are high, a density bonus can reduce per unit land costs.
3) Where use of the bonus will not trigger a higher cost construction type.
For Hawaii County, a density bonus may be valuable to help offset substantial infrastructure
costs for some projects.
7.3 Flexible Development Standards
Flexible development standards can increase the development potential of sites and may allow
projects to move forward on land where projects may not otherwise be possible. Examples
include:
• Reduced setbacks.
• Flexible lot configurations.
• Reduced minimum lot sizes.
A. Examples
Tallahassee, FL – Tallahassee provides flexibility in development standards including reduced
setbacks and minimum lot sizes and a 25% density bonus to projects that include 10%
affordable units.
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San Luis Obispo, CA – The City offers flexibility in density limitations in its downtown core to
encourage smaller units and exempts them from inclusionary requirements. The program also
eliminates density standards for studio and one-bedroom units under 600 square feet.
Pleasanton, CA – Pleasanton’s inclusionary housing ordinance provides a menu of incentives to
reduce costs and encourage onsite construction of inclusionary units. The City’s inclusionary
ordinance requires 15% to 20% of units as affordable depending on project type. Incentives for
on-site inclusionary units include:
Fee waiver or deferral.
Priority processing.
Reduced setbacks.
Reduced infrastructure requirements.
Reduced open space requirements.
Reduced landscaping requirements.
Interior or exterior amenities.
Reduced parking requirements.
Height restriction waivers.
B. Considerations
Providing flexibility in development standards can reduce development costs and help improve
project feasibility. This can in turn help to offset the cost of providing affordable units. Projects in
Hawaii County that submit applications under the State’s Section 201H program have requested
a variety of modifications to development standards, an indicator that projects see value in this
type of flexibility.
7.4 Reduced Parking Requirements
Reduced parking requirements can improve feasibility, and if the reduction is linked to inclusion
of affordable units, it can help incentivize projects to do so. A one-size-fits-all parking
requirement may result in an excess parking in some situations. The flexibility to provide only
the parking the developer determines is necessary can help reduce costs and make projects
more feasible, since surface parking is land-intensive and structured parking is costly to
construct. A reduction in parking requirements can be beneficial where residents have few
vehicles and other modes of transportation are available. Approaches can include:
Reduced parking requirements for all projects.
Elimination of parking requirements, or even setting maximum parking limits.
Case-by-case review to determine appropriate parking levels.
Linking a reduction in parking requirements to on-site affordability.
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A. Examples
Seattle, WA – Seattle reduced parking requirements for affordable housing, requiring one space
per 6 units instead of one per 3 units. No parking is required for residential units near a frequent
transit stop.
Evanston, IL – Parking is not required for inclusionary units in projects with 5% affordable units
on-site, or 10% for developments receiving public financing. Additional parking reductions are
available within transit-oriented development areas.
Alexandria, VA – Alexandria’s parking requirements vary by development type and
neighborhood and are lower near Metro stations. Additional parking reductions apply to projects
near multiple active bus routes, with a high walkability index, with a large share of studios, and
for multifamily buildings that include affordable housing.
B. Considerations
When projects are required to provide more parking than necessary, development costs are
increased unnecessarily, which can affect feasibility. Reducing parking requirements can
improve feasibility and help offset the cost of affordable units in some situations. The incentive
associated with reduced parking is greatest where land values are high and projects are
providing parking in a structure, which is not the case for most projects in Hawaii County.
7.5 Expedited Approvals
An expedited approval process can be established for projects that include an affordable
component. Faster processing reduces risk and financing costs and allows developers to bring
projects to market faster. This can entail expedited processing of land use and zoning approvals
during the entitlement phase as well as expediting building permit and inspection processes
during the construction phase.
A. Examples
Santa Fe, NM – Santa Fe accelerates the permitting process for projects that include at least
25% affordable housing in addition to other provisions to help to offset the cost of affordable
units, including permit fee waivers, impact fee waivers, and a reduced utility expansion charge.
San Diego, CA – San Diego expedites processing of projects with at least 10% affordable units,
in-fill, or sustainable development features. Eligible projects receive access to specialized staff,
shorter review times, and priority for scheduling of hearings.
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Pinellas County, FL – Pinellas County expedites processing of affordable housing by providing
access to a development review administrator that serves as a central point of contact as the
project proceeds through the development review and permitting process.
B. Considerations
Expedited processing can save time and reduce at-risk entitlement costs, market risks, and
financing costs to the extent there is a meaningful acceleration in the process. Expedited
processing is most effective as a tool for encouraging projects to provide affordable housing in
markets where developers view entitlement risks as elevated or the process as lengthy and
there is a meaningful approach to expediting the process for eligible projects. Some
communities have expressed reservations with the idea of creating a two-track system of
approvals and instead aspire toward expediting the approval process for all projects.
7.6 By-Right Development
By-right development is an approach of allowing housing to be built without discretionary
approval if it complies with objective zoning and development standards. Discretionary approval
processes create uncertainty for developers and can add significant time and expense to the
process. Broadening the range of development projects eligible for approval administratively “by
right” if they meet all objective zoning and development regulations can reduce risk and costs
for the developer.
A. Examples
Connecticut and California have both established by-right development policies. In Connecticut,
land zoned for single-family housing generally does not require a public hearing before
approval, but almost all projects involving more than three units must undergo public hearings.
California recently established by-right development for affordable housing in areas zoned for
parking, retail, or office. Projects are exempt from environmental reviews but require that units
be affordable and comply with prevailing wage standards. California also established a process
that prevents a reduction in density to housing projects that meet all objective standards in place
at the time of application and allows projects to lock in the existing fees and land use regulations
at the time a preliminary application is submitted.
B. Considerations
A by-right approval process enhances certainty for projects, reducing cost and risk to the
developer. To the extent there are opportunities to expand the set of projects eligible to be
processed and approved administratively, it may be helpful in inducing additional housing
development.
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7.7 Development Fee Waivers
Reduction, waiver, or deferral of development-related fees for projects that include affordable
housing reduce costs and are typically a positive factor in securing competitive financing.
A. Examples
Austin, TX – Projects that set aside affordable units are eligible for full or partial waivers. Fee
reductions range from 25% to 100% depending on the percentage of affordable units. The
maximum reduction in fees is available to projects with 40% or more affordable units.
Folsom, CA allows developers of qualified residential projects to pay impact fees on a deferred
basis (up to 15 months from issuance of a building permit). Projects must have 10% of units
affordable to very low-income households or 30% affordable to low-income households to be
eligible. Processing fees may also be waived, subject to an annual dollar maximum.
Sacramento, CA – Affordable units are eligible for a zero dollar rate for certain categories of
development impact fees administered by the city.
B. Considerations
Fee waivers can be helpful in securing competitive funding sources for 100% affordable
projects. Some jurisdictions use affordable housing fee revenues to reimburse relevant city or
county funds for reduced or waived fees, and some provide a General Fund appropriation to
offset the cost of the fee waivers or reductions. Projects qualifying for the State of Hawaii 201H
program are already able to request fee waivers through that process.
7.8 Property Tax Abatements or Exemptions
Property tax abatements and exemptions reduce operating costs for rental units, which directly
improves project feasibility. Property tax abatements reduce the amount of taxes owed for a
specific period. Property tax exemptions reduce the property’s assessed value or rate of
taxation, thereby resulting in a lower tax bill indefinitely.
A. Examples
Washington, DC implemented a property tax abatement equivalent to 75 percent of the
incremental property tax resulting from the development. The property tax abatement is for ten
years. Projects must have at least 15% affordable units to qualify.
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Provincetown, MA provides a property tax exemption for affordable units. The exemption is
determined in proportion to the floor area occupied by the affordable units. The exemption is
granted on a year-to-year basis and does not require a long-term affordability covenant.
B. Considerations
Property tax exemptions and abatements directly improve feasibility by reducing operating costs
of rental units. Hawaii County has a form of a property tax abatement in the form of a reduced
property tax rate that applies to affordable units, which represents approximately half the
standard rate for apartments.
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APPENDIX A: PRO FORMA ANALYSIS TABLES
APPENDIX A TABLE 1
SUMMARY OF FEASIBILITY FINDINGS
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Summary of Feasibility Scenario Testing
Scenario 1 2 3a 3b 4a 4b 4c 4d
Mix A, 13.5% affordable Mix B, 10% affordable $5 $10 $15 $20
Prototype Project 13.5% on-site aff.10% on-site aff.
W1 Kailua Kona Single Family, Larger $7 $7 $2 $3 $7 $6 $6 $5
W2 Kailua Kona Single Family, Smaller $8 $9 ($1)$1 $8 $7 $6 $5
W3 Kailua Kona Attached Condo ($2)$1 ($11)($10)($1)($3)($5)($7)
W4 Kohala Resort Single Family $24 $24 $19 $19 $24 $23 $22 $21
W5 Kohala Resort Attached Condo $30 $33 $22 $23 $31 $29 $28 $26
W6 Waikoloa Single Family $5 $5 $1 $1 $5 $4 $4 $3
W7 Waimea Single Family $2 $3 ($2)($1)$2 $2 $1 $0
E1 Hilo Single Family ($2)($1)($3)($3)($2)($2)($2)($3)
E2 Puna Single Family ($14)($14)($14)($14)($14)($14)($15)($15)
E3 Hamakua Single Family ($10)($9)($11)($11)($10)($10)($11)($11)
Wa West Hawai'i Market Rate Rental $19 $22 $9 $9 $21 $20 $18 $17
Ea East Hawai'i Market Rate Rental ($53)($49)($53)($55)($50)($51)($53)($54)
(1)Reflects residual land value prior to improvements such as grading, utilities, and intract streets.
(2)See Appendix A Table 5 for details regarding affordability mix.
(3)Analysis based on on-site units in mixed income project without outside subsidies such as LIHTC.
Feasible / More Likely to Develop
Marginal / Weaker Feasibility
Infeasible / Less Likely to Develop
On-Site Units (2) (3)In-Lieu Fee ($/NSF in Project)Purchased Credits No Requirement
Residual Land Value Supported ($PSF of land) (1)
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APPENDIX A TABLE 2
NET COST OF CHAPTER 11 COMPLIANCE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Net Cost of Compliance with Affordable Housing Requirements (1)
1 3a 3b 4a 4b 4c 4d
Prototype Project Mix A, 13.5% affordable Mix B, 10% affordable $5 $10 $15 $20
A. Compliance Cost Per Unit in Project 13.5% on-site affordable 10% on-site affordable
W1 Kailua Kona Single Family, Larger $10,260 $126,260 $101,360 $11,880 $23,760 $35,640 $47,520
W2 Kailua Kona Single Family, Smaller $10,300 $71,300 $60,300 $7,730 $15,480 $23,230 $30,980
W3 Kailua Kona Attached Condo $10,400 $38,000 $34,900 $6,220 $12,420 $18,620 $24,820
W4 Kohala Resort Single Family $10,400 $85,700 $72,500 $12,450 $24,850 $37,250 $49,640
W5 Kohala Resort Attached Condo $10,300 $45,700 $42,000 $7,250 $14,480 $21,710 $28,940
W6 Waikoloa Single Family $10,400 $71,300 $60,300 $8,820 $17,610 $26,390 $35,170
W7 Waimea Single Family $10,300 $63,400 $54,800 $9,040 $18,080 $27,120 $36,160
E1 Hilo Single Family $10,300 $33,000 $32,100 $8,800 $17,580 $26,360 $35,140
E2 Puna Single Family (3)$10,300 $2,000 $4,000 $6,180 $12,380 $18,580 $24,780
E3 Hamakua Single Family $10,400 $22,500 $24,200 $7,790 $15,540 $23,280 $31,030
Wa West Hawai'i Market Rate Rental $10,000 $37,000 $36,000 $3,830 $7,450 $11,060 $14,680
Ea East Hawai'i Market Rate Rental $10,100 $11,100 $16,100 $3,660 $7,280 $10,890 $14,510
B. Compliance Cost Per Square Foot in Project
W1 Kailua Kona Single Family, Larger $4.46 $54.90 $44.07 $5.17 $10.33 $15.50 $20.66
W2 Kailua Kona Single Family, Smaller $6.87 $47.53 $40.20 $5.15 $10.32 $15.49 $20.65
W3 Kailua Kona Attached Condo $8.67 $31.67 $29.08 $5.18 $10.35 $15.52 $20.68
W4 Kohala Resort Single Family $4.33 $35.71 $30.21 $5.19 $10.35 $15.52 $20.68
W5 Kohala Resort Attached Condo $7.36 $32.64 $30.00 $5.18 $10.34 $15.51 $20.67
W6 Waikoloa Single Family $6.12 $41.94 $35.47 $5.19 $10.36 $15.52 $20.69
W7 Waimea Single Family $5.89 $36.23 $31.31 $5.17 $10.33 $15.50 $20.66
E1 Hilo Single Family $6.06 $19.41 $18.88 $5.18 $10.34 $15.51 $20.67
E2 Puna Single Family (3)$8.58 $1.67 $3.33 $5.15 $10.32 $15.48 $20.65
E3 Hamakua Single Family $6.93 $15.00 $16.13 $5.19 $10.36 $15.52 $20.69
Wa West Hawai'i Market Rate Rental $14.29 $52.86 $51.43 $5.47 $10.64 $15.80 $20.97
Ea East Hawai'i Market Rate Rental $14.43 $15.86 $23.00 $5.23 $10.40 $15.56 $20.73
Existing Chapter 11 Requirements
Purchased
Credits
On-Site Units (2)
(adds est. construction loan interest carry for fee)
In-Lieu Fee ($/NSF in Project)
In-Lieu Fee ($/NSF in Project)
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Net Cost of Compliance with Affordable Housing Requirements (1)
1 3a 3b 4a 4b 4c 4d
Prototype Project Mix A, 13.5% affordable Mix B, 10% affordable $5 $10 $15 $20
Existing Chapter 11 Requirements
Purchased
Credits
On-Site Units (2)In-Lieu Fee ($/NSF in Project)
In-Lieu Fee ($/NSF in Project)
C. Compliance Cost as Percent of Total Development Cost excl. land
W1 Kailua Kona Single Family, Larger 0.9%11.0%8.9%1.0%2.1%3.1%4.2%
W2 Kailua Kona Single Family, Smaller 1.2%8.5%7.2%0.9%1.8%2.8%3.7%
W3 Kailua Kona Attached Condo 1.7%6.2%5.7%1.0%2.0%3.0%4.0%
W4 Kohala Resort Single Family 0.5%4.1%3.5%0.6%1.2%1.8%2.4%
W5 Kohala Resort Attached Condo 1.0%4.6%4.2%0.7%1.4%2.2%2.9%
W6 Waikoloa Single Family 1.3%8.7%7.3%1.1%2.1%3.2%4.3%
W7 Waimea Single Family 1.3%7.7%6.7%1.1%2.2%3.3%4.4%
E1 Hilo Single Family 1.6%5.0%4.8%1.3%2.6%4.0%5.3%
E2 Puna Single Family (3)1.9%0.4%0.7%1.1%2.3%3.5%4.6%
E3 Hamakua Single Family 1.6%3.4%3.7%1.2%2.4%3.6%4.7%
Wa West Hawai'i Market Rate Rental 2.7%9.8%9.6%1.0%2.0%2.9%3.9%
Ea East Hawai'i Market Rate Rental 2.7%2.9%4.3%1.0%1.9%2.9%3.9%
D. Net Cost Per On-Site Affordable Unit (forgone sales price / project value with affordable units in mixed-income project / no LIHTC or other subsidy)
W1 Kailua Kona Single Family, Larger $935,000 $1,014,000
W2 Kailua Kona Single Family, Smaller $528,000 $603,000
W3 Kailua Kona Attached Condo $281,000 $349,000
W4 Kohala Resort Single Family $635,000 $725,000
W5 Kohala Resort Attached Condo $339,000 $420,000
W6 Waikoloa Single Family $528,000 $603,000
W7 Waimea Single Family $470,000 $548,000
E1 Hilo Single Family $244,000 $321,000
E2 Puna Single Family (3)$15,000 $40,000
E3 Hamakua Single Family $167,000 $242,000
Wa West Hawai'i Market Rate Rental $274,000 $360,000
Ea East Hawai'i Market Rate Rental $82,000 $161,000
Notes:
(2) Resort prototypes are assumed to provide affordable for-sale units in an off-site location.
(3) Cost of on-site units calculates as zero because market prices are below calculated affordable sales prices.
(1) Reflects the effective net cost of complying with Chapter 11 expressed as an amount per unit or per square foot in the entire project. Figures under sections A., B. and C. reflect an average across *all* units in the project (market rate + affordable),
while amounts in Section D reflect a cost per affordable unit. Amounts are computed based on the pro forma analysis and reflect the net impact on the pro forma of the identified requirement as compared to no requirement.
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APPENDIX A TABLE 3A
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS WITH USE OF CREDITS
HAWAI'I COUNTY
Living Area Net SF 2,300 sf 1,500 sf 1,200 sf
Garage/Carport SF 420 sf 420 sf 0 sf
Lanai/Porch 120 sf 60 sf 60 sf
Average Number of Bedrooms 3.50 bedrooms 3.0 bedrooms 2.0 bedrooms
Gross Density 1.7 du/acre 6.4 du/acre 13.6 du/acre
Avg Lot Size 20,000 sf 5,445 sf 2,562 sf
Parking Ratio/ Type 2.0 garage 2.0 garage 1.5 surface
Revenue Percent Per SF Per Unit Per SF Per Unit Per SF Per Unit
Market Rate Units 100.0%$670 $1,541,000 $700 $1,050,000 $600 $720,000
<Less> Sales Expense ($27)($61,600)($28)($42,000)($24)($28,800)
Sales Net of Sales Expenses $643 $1,479,400 $672 $1,008,000 $576 $691,200
Development Costs Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
Site / Intract Costs $109 $250,000 $100 $150,000 $58 $70,000
Direct Home Construction $305 $701,500 $360 $540,000 $355 $426,000
Fees & Permits $11 $25,000 $16 $24,000 $19 $23,000
Affordable Housing Credits $4 $10,000 $7 $10,000 $8 $10,000
Other Indirect Costs $55 $126,300 $65 $97,200 $64 $76,700
Financing $18 $41,100 $19 $28,400 $17 $20,700
Total Devel. Costs (excl. land)$502 $1,153,900 $566 $849,600 $522 $626,400
Residual Land Value
Net Sales Revenue $643 $1,479,400 $672 $1,008,000 $576 $691,200
<Less> Development Costs ($502)($1,153,900)($566)($849,600)($522)($626,400)
<Less> Builder Profit Margin*($154,100)($105,000)($72,000)
Residual Land Value (Per Unit)$171,400 $53,400 ($7,200)
Per Acre $298,600 $341,800 ($97,900)
Per Sq. Ft. of Land Area (Gross)$7 $8 ($2)
*net of sales costs and builder overhead
W3 - Attached Condo
Kailua Kona / South Kona
W1 - Larger
Single Family
W2 - Smaller
Single Family
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APPENDIX A TABLE 3A
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 100.0%
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site / Intract Costs
Direct Home Construction
Fees & Permits
Affordable Housing Credits
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual Land Value (Per Unit)
Per Acre
Per Sq. Ft. of Land Area (Gross)
*net of sales costs and builder overhead
WITH USE OF CREDITS
2,400 sf 1,400 sf 1,700 sf 1,750 sf
420 sf 0 sf 420 sf 420 sf
550 sf 180 sf 80 sf 80 sf
4 bedrooms 2.25 bedrooms 3 bedrooms 4 bedrooms
3.0 du/acre 9.6 du/acre 2.9 du/acre 3.5 du/acre
11,616 sf 3,630 sf 12,000 sf 10,000 sf
2.0 garage 1.5 surface 2.0 surface 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit Per SF Per Unit
$1,300 $3,120,000 $1,050 $1,470,000 $618 $1,050,000 $571 $1,000,000
($130)($312,000)($105)($147,000)($25)($42,000)($23)($40,000)
$1,170 $2,808,000 $945 $1,323,000 $593 $1,008,000 $549 $960,000
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$163 $392,000 $88 $123,000 $88 $150,000 $86 $150,000
$560 $1,344,000 $495 $693,000 $310 $527,000 $300 $525,000
$11 $27,000 $17 $24,000 $14 $24,000 $14 $24,000
$4 $10,000 $7 $10,000 $6 $10,000 $6 $10,000
$101 $241,900 $89 $124,700 $56 $94,900 $54 $94,500
$31 $74,200 $25 $34,600 $16 $27,800 $16 $27,500
$870 $2,089,100 $721 $1,009,300 $490 $833,700 $475 $831,000
$1,170 $2,808,000 $945 $1,323,000 $593 $1,008,000 $549 $960,000
($870)($2,089,100)($721)($1,009,300)($490)($833,700)($475)($831,000)
($374,400)($176,400)($105,000)($100,000)
$344,500 *$137,300 *$69,300 $29,000
$1,033,500 *$1,318,100 *$201,200 $101,100
$24 $30 $5 $2
* reflective of pad sale in existing resort with established amenities, would be less for ground-up resort, higher for ocean-front lots.
Waimea
W4 - Single Family & Duplex
Kohala / Oceanfront Resorts
W7 - Single Family
Waikoloa Village
W5 - Attached Condo W6 - Single Family
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APPENDIX A TABLE 3A
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 100.0%
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site / Intract Costs
Direct Home Construction
Fees & Permits
Affordable Housing Credits
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual Land Value (Per Unit)
Per Acre
Per Sq. Ft. of Land Area (Gross)
*net of sales costs and builder overhead
WITH USE OF CREDITS
1,700 sf 1,200 sf 1,500 sf
420 sf 420 sf 420 sf
80 sf 60 sf 60 sf
3.25 bedrooms 3.0 bedrooms 3.0 bedrooms
1.6 du/acre 2.9 du/acre 3.5 du/acre
21,780 sf 12,000 sf 10,000 sf
2.0 garage 2.0 garage 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit
$426 $725,000 $325 $390,000 $420 $630,000
($17)($29,000)($13)($15,600)($17)($25,200)
$409 $696,000 $312 $374,400 $403 $604,800
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$80 $136,000 $113 $135,000 $117 $175,000
$240 $408,000 $255 $306,000 $245 $367,500
$14 $24,000 $20 $24,000 $16 $24,000
$6 $10,000 $8 $10,000 $7 $10,000
$43 $73,400 $46 $55,100 $44 $66,200
$13 $22,500 $15 $18,100 $15 $21,800
$396 $673,900 $457 $548,200 $443 $664,500
$409 $696,000 $312 $374,400 $403 $604,800
($396)($673,900)($457)($548,200)($443)($664,500)
($72,500)($39,000)($63,000)
($50,400)($212,800)($122,700)
($80,600)($618,000)($427,600)
($2)($14)($10)
Hamakua
E2 - Single Family E3 - Single Family
Hilo Puna
E1 - Single Family
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APPENDIX A TABLE 3B
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS EXISTING REQ. & ON-SITE UNITS - HIGHEST AMI LEVEL ALLOWED
HAWAI'I COUNTY
Living Area Net SF 2,300 sf 1,500 sf 1,200 sf
Garage/Carport SF 420 sf 420 sf 0 sf
Lanai/Porch 120 sf 60 sf 60 sf
Average Number of Bedrooms 3.50 bedrooms 3.0 bedrooms 2.0 bedrooms
Gross Density 1.7 du/acre 6.4 du/acre 13.6 du/acre
Avg Lot Size 20,000 sf 5,445 sf 2,562 sf
Parking Ratio/ Type 2.0 garage 2.0 garage 1.5 surface
Revenue Percent Per SF Per Unit Per SF Per Unit Per SF Per Unit
Market Rate Units 86.5%$670 $1,541,000 $700 $1,050,000 $600 $720,000
80% AMI Units 5.4%$158 $362,850 $233 $348,800 $262 $314,200
100% AMI Units 4.1%$197 $453,550 $291 $436,000 $327 $392,800
120% AMI Units 2.7%$237 $544,250 $349 $523,200 $393 $471,300
140% AMI Units 1.4%$276 $635,000 $407 $610,500 $458 $549,900
Average Gross Sales Price $606 $1,394,195 $645 $967,111 $563 $675,824
<Less> Sales Expense ($24)($55,768)($26)($38,684)($23)($27,033)
Sales Net of Sales Expenses $582 $1,338,427 $619 $928,427 $541 $648,791
Development Costs Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
Site Improvements $109 $250,000 $100 $150,000 $58 $70,000
Direct Home Construction $305 $701,500 $360 $540,000 $355 $426,000
Fees & Permits $11 $25,000 $16 $24,000 $19 $23,000
Subsidy for Off-Site Aff Units**$0 $0 $0 $0 $0 $0
Other Indirect Costs $55 $126,300 $65 $97,200 $64 $76,700
Financing $18 $40,800 $19 $28,100 $17 $20,300
Total Devel. Costs (excl. land)$497 $1,143,600 $560 $839,300 $513 $616,000
Residual Land Value
Net Sales Revenue $582 $1,338,427 $619 $928,427 $541 $648,791
<Less> Development Costs ($497)($1,143,600)($560)($839,300)($513)($616,000)
<Less> Builder Profit Margin*($139,419)($96,711)($67,582)
Residual Land Value (Per Unit)$55,400 ($7,600)($34,800)
Per Acre $96,500 ($48,600)($473,300)
Per Sq. Ft. of Land Area (Gross)$2 ($1)($11)
*net of sales costs and builder overhead
W1 - Larger
Single Family
W2 - Smaller
Single Family W3 - Attached Condo
Kailua Kona / South Kona
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APPENDIX A TABLE 3B
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 86.5%
80% AMI Units 5.4%
100% AMI Units 4.1%
120% AMI Units 2.7%
140% AMI Units 1.4%
Average Gross Sales Price
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site Improvements
Direct Home Construction
Fees & Permits
Subsidy for Off-Site Aff Units**
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual Land Value (Per Unit)
Per Acre
Per Sq. Ft. of Land Area (Gross)
*net of sales costs and builder overhead
EXISTING REQ. & ON-SITE UNITS - HIGHEST AMI LEVEL ALLOWED
2,400 sf 1,400 sf 1,700 sf 1,750 sf
420 sf 0 sf 420 sf 420 sf
550 sf 180 sf 80 sf 80 sf
4 bedrooms 2.25 bedrooms 3 bedrooms 4 bedrooms
3.0 du/acre 9.6 du/acre 2.9 du/acre 3.5 du/acre
11,616 sf 3,630 sf 12,000 sf 10,000 sf
2.0 garage 1.5 surface 2.0 surface 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit Per SF Per Unit
$1,300 $3,120,000 $1,050 $1,470,000 $618 $1,050,000 $571 $1,000,000
$205 $348,800 $207 $362,850
$256 $436,000 $259 $453,550
$308 $523,200 $311 $544,250
$359 $610,500 $363 $635,000
$1,300 $3,120,000 $1,050 $1,470,000 $569 $967,111 $529 $926,230
($130)($312,000)($105)($147,000)($23)($38,684)($21)($37,049)
$1,170 $2,808,000 $945 $1,323,000 $546 $928,427 $508 $889,181
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$163 $392,000 $88 $123,000 $88 $150,000 $86 $150,000
$560 $1,344,000 $495 $693,000 $310 $527,000 $300 $525,000
$11 $27,000 $17 $24,000 $14 $24,000 $14 $24,000
$35 $82,900 $32 $44,200 $0 $0 $0 $0
$101 $241,900 $89 $124,700 $56 $94,900 $54 $94,500
$32 $76,600 $26 $35,800 $16 $27,400 $16 $27,200
$902 $2,164,400 $746 $1,044,700 $484 $823,300 $469 $820,700
$1,170 $2,808,000 $945 $1,323,000 $546 $928,427 $508 $889,181
($902)($2,164,400)($746)($1,044,700)($484)($823,300)($469)($820,700)
($374,400)($176,400)($96,711)($92,623)
$269,200 *$101,900 *$8,400 ($24,100)
$807,600 *$978,200 *$24,400 ($84,000)
$19 $22 $1 ($2)
**Due to high price-point, assume resorts would provide affordable for-sale units off-site. Net cost is based on cost to provide prototype W2 / W3 at an
affordable price.
W7 - Single Family
* reflective of pad sale in existing resort with established amenities, would be
less for ground-up resort, higher for ocean-front lots.
(100% market rate, with for-sale aff units provided off-
site)
(100% market rate, with aff units provided off-site)
W6 - Single FamilyW4 - Single Family & Duplex W5 - Attached Condo
Kohala / Oceanfront Resorts Waikoloa Village Waimea
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APPENDIX A TABLE 3B
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 86.5%
80% AMI Units 5.4%
100% AMI Units 4.1%
120% AMI Units 2.7%
140% AMI Units 1.4%
Average Gross Sales Price
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site Improvements
Direct Home Construction
Fees & Permits
Subsidy for Off-Site Aff Units**
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual Land Value (Per Unit)
Per Acre
Per Sq. Ft. of Land Area (Gross)
*net of sales costs and builder overhead
EXISTING REQ. & ON-SITE UNITS - HIGHEST AMI LEVEL ALLOWED
1,700 sf 1,200 sf 1,500 sf
420 sf 420 sf 420 sf
80 sf 60 sf 60 sf
3.25 bedrooms 3.0 bedrooms 3.0 bedrooms
1.6 du/acre 2.9 du/acre 3.5 du/acre
21,780 sf 12,000 sf 10,000 sf
2.0 garage 2.0 garage 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit
$426 $725,000 $325 $390,000 $420 $630,000
$207 $352,313 $291 $348,800 $233 $348,800
$259 $440,388 $325 $390,000 $291 $436,000
$311 $528,463 $325 $390,000 $349 $523,200
$363 $616,625 $325 $390,000 $407 $610,500
$404 $686,578 $323 $387,775 $403 $603,811
($16)($27,463)($13)($15,511)($16)($24,152)
$388 $659,115 $310 $372,264 $386 $579,659
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$80 $136,000 $113 $135,000 $117 $175,000
$240 $408,000 $255 $306,000 $245 $367,500
$14 $24,000 $20 $24,000 $16 $24,000
$0 $0 $0 $0 $0 $0
$43 $73,400 $46 $55,100 $44 $66,200
$13 $22,200 $15 $17,800 $14 $21,400
$390 $663,600 $448 $537,900 $436 $654,100
$388 $659,115 $310 $372,264 $386 $579,659
($390)($663,600)($448)($537,900)($436)($654,100)
($68,658)($38,778)($60,381)
($73,100)($204,400)($134,800)
($117,000)($593,600)($469,800)
($3)($14)($11)
E1 - Single Family E2 - Single Family E3 - Single Family
HamakuaHiloPuna
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APPENDIX A TABLE 3C
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS EXISTING REQ. & ON-SITE UNITS - AT AMI ELIGIBLE FOR MAX CREDIT
HAWAI'I COUNTY
Living Area Net SF 2,300 sf 1,500 sf 1,200 sf
Garage/Carport SF 420 sf 420 sf 0 sf
Lanai/Porch 120 sf 60 sf 60 sf
Average Number of Bedrooms 3.50 bedrooms 3.0 bedrooms 2.0 bedrooms
Gross Density 1.7 du/acre 6.4 du/acre 13.6 du/acre
Avg Lot Size 20,000 sf 5,445 sf 2,562 sf
Parking Ratio/ Type 2.0 garage 2.0 garage 1.5 surface
Revenue Percent Per SF Per Unit Per SF Per Unit Per SF Per Unit
Market Rate Units 90.0%$670 $1,541,000 $700 $1,050,000 $600 $720,000
80% AMI Units 10.0%$158 $362,850 $233 $348,800 $262 $314,200
100% AMI Units 0.0%$197 $453,550 $291 $436,000 $327 $392,800
120% AMI Units 0.0%$237 $544,250 $349 $523,200 $393 $471,300
140% AMI Units 0.0%$276 $635,000 $407 $610,500 $458 $549,900
Average Gross Sales Price $619 $1,423,185 $653 $979,880 $566 $679,420
<Less> Sales Expense ($25)($56,927)($26)($39,195)($23)($27,177)
Sales Net of Sales Expenses $594 $1,366,258 $627 $940,685 $544 $652,243
Development Costs Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
Site Improvements $109 $250,000 $100 $150,000 $58 $70,000
Direct Home Construction $305 $701,500 $360 $540,000 $355 $426,000
Fees & Permits $11 $25,000 $16 $24,000 $19 $23,000
Subsidy for Off-Site Aff Units**$0 $0 $0 $0 $0 $0
Other Indirect Costs $55 $126,300 $65 $97,200 $64 $76,700
Financing $18 $40,800 $19 $28,100 $17 $20,300
Total Devel. Costs (excl. land)$497 $1,143,600 $560 $839,300 $513 $616,000
Residual Land Value
Net Sales Revenue $594 $1,366,258 $627 $940,685 $544 $652,243
<Less> Development Costs ($497)($1,143,600)($560)($839,300)($513)($616,000)
<Less> Builder Profit Margin*($142,319)($97,988)($67,942)
Residual Land Value (Per Unit)$80,300 $3,400 ($31,700)
Per Acre $139,900 $21,800 ($431,100)
Per Sq. Ft. of Land Area (Gross)$3 $1 ($10)
*net of sales costs and builder overhead
W1 - Larger
Single Family
W2 - Smaller
Single Family W3 - Attached Condo
Kailua Kona / South Kona
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APPENDIX A TABLE 3C
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 90.0%
80% AMI Units 10.0%
100% AMI Units 0.0%
120% AMI Units 0.0%
140% AMI Units 0.0%
Average Gross Sales Price
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site Improvements
Direct Home Construction
Fees & Permits
Subsidy for Off-Site Aff Units**
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual Land Value (Per Unit)
Per Acre
Per Sq. Ft. of Land Area (Gross)
*net of sales costs and builder overhead
EXISTING REQ. & ON-SITE UNITS - AT AMI ELIGIBLE FOR MAX CREDIT
2,400 sf 1,400 sf 1,700 sf 1,750 sf
420 sf 0 sf 420 sf 420 sf
550 sf 180 sf 80 sf 80 sf
4 bedrooms 2.25 bedrooms 3 bedrooms 4 bedrooms
3.0 du/acre 9.6 du/acre 2.9 du/acre 3.5 du/acre
11,616 sf 3,630 sf 12,000 sf 10,000 sf
2.0 garage 1.5 surface 2.0 surface 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit Per SF Per Unit
$1,300 $3,120,000 $1,050 $1,470,000 $618 $1,050,000 $571 $1,000,000
$205 $348,800 $207 $362,850
$256 $436,000 $259 $453,550
$308 $523,200 $311 $544,250
$359 $610,500 $363 $635,000
$1,300 $3,120,000 $1,050 $1,470,000 $576 $979,880 $535 $936,285
($130)($312,000)($105)($147,000)($23)($39,195)($21)($37,451)
$1,170 $2,808,000 $945 $1,323,000 $553 $940,685 $514 $898,834
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$163 $392,000 $88 $123,000 $88 $150,000 $86 $150,000
$560 $1,344,000 $495 $693,000 $310 $527,000 $300 $525,000
$11 $27,000 $17 $24,000 $14 $24,000 $14 $24,000
$29 $70,100 $29 $40,600 $0 $0 $0 $0
$101 $241,900 $89 $124,700 $56 $94,900 $54 $94,500
$32 $76,200 $26 $35,700 $16 $27,400 $16 $27,200
$896 $2,151,200 $744 $1,041,000 $484 $823,300 $469 $820,700
$1,170 $2,808,000 $945 $1,323,000 $553 $940,685 $514 $898,834
($896)($2,151,200)($744)($1,041,000)($484)($823,300)($469)($820,700)
($374,400)($176,400)($97,988)($93,629)
$282,400 *$105,600 *$19,400 ($15,500)
$847,200 *$1,013,800 *$56,300 ($54,000)
$19 $23 $1 ($1)
* reflective of pad sale in existing resort with established amenities, would be less for ground-up resort, higher for ocean-front lots.
**Due to high price-point, assume resorts would provide affordable for-sale units off-site. Net cost is based on cost to provide prototype W2 / W3 at an
affordable price.
W7 - Single Family
(100% market rate, with for-
sale aff units provided off-
site)
(100% market rate, with aff
units provided off-site)
W4 - Single Family & Duplex W5 - Attached Condo W6 - Single Family
Kohala / Oceanfront Resorts Waikoloa Village Waimea
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APPENDIX A TABLE 3C
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 90.0%
80% AMI Units 10.0%
100% AMI Units 0.0%
120% AMI Units 0.0%
140% AMI Units 0.0%
Average Gross Sales Price
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site Improvements
Direct Home Construction
Fees & Permits
Subsidy for Off-Site Aff Units**
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual Land Value (Per Unit)
Per Acre
Per Sq. Ft. of Land Area (Gross)
*net of sales costs and builder overhead
EXISTING REQ. & ON-SITE UNITS - AT AMI ELIGIBLE FOR MAX CREDIT
1,700 sf 1,200 sf 1,500 sf
420 sf 420 sf 420 sf
80 sf 60 sf 60 sf
3.25 bedrooms 3.0 bedrooms 3.0 bedrooms
1.6 du/acre 2.9 du/acre 3.5 du/acre
21,780 sf 12,000 sf 10,000 sf
2.0 garage 2.0 garage 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit
$426 $725,000 $325 $390,000 $420 $630,000
$207 $352,313 $291 $348,800 $233 $348,800
$259 $440,388 $325 $390,000 $291 $436,000
$311 $528,463 $325 $390,000 $349 $523,200
$363 $616,625 $325 $390,000 $407 $610,500
$405 $687,731 $322 $385,880 $401 $601,880
($16)($27,509)($13)($15,435)($16)($24,075)
$388 $660,222 $309 $370,445 $385 $577,805
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$80 $136,000 $113 $135,000 $117 $175,000
$240 $408,000 $255 $306,000 $245 $367,500
$14 $24,000 $20 $24,000 $16 $24,000
$0 $0 $0 $0 $0 $0
$43 $73,400 $46 $55,100 $44 $66,200
$13 $22,200 $15 $17,800 $14 $21,400
$390 $663,600 $448 $537,900 $436 $654,100
$388 $660,222 $309 $370,445 $385 $577,805
($390)($663,600)($448)($537,900)($436)($654,100)
($68,773)($38,588)($60,188)
($72,200)($206,000)($136,500)
($115,500)($598,200)($475,700)
($3)($14)($11)
E1 - Single Family E2 - Single Family E3 - Single Family
HamakuaHiloPuna
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APPENDIX A TABLE 3D
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS WITH POTENTIAL IN-LIEU FEE
HAWAI'I COUNTY
Living Area Net SF 2,300 sf 1,500 sf 1,200 sf
Garage/Carport SF 420 sf 420 sf 0 sf
Lanai/Porch 120 sf 60 sf 60 sf
Average Number of Bedrooms 3.50 bedrooms 3.0 bedrooms 2.0 bedrooms
Gross Density 1.7 du/acre 6.4 du/acre 13.6 du/acre
Avg Lot Size 20,000 sf 5,445 sf 2,562 sf
Parking Ratio/ Type 2.0 garage 2.0 garage 1.5 surface
Revenue Percent Per SF Per Unit Per SF Per Unit Per SF Per Unit
Market Rate Units 100.0%$670 $1,541,000 $700 $1,050,000 $600 $720,000
<Less> Sales Expense ($27)($61,640)($28)($42,000)($24)($28,800)
Sales Net of Sales Expenses $643 $1,479,360 $672 $1,008,000 $576 $691,200
Development Costs Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
Site Improvements $109 $250,000 $100 $150,000 $58 $70,000
Direct Home Construction $305 $701,500 $360 $540,000 $355 $426,000
Fees & Permits $11 $25,000 $16 $24,000 $19 $23,000
Potential In-Lieu Fee@$10/SF $10 $23,000 $10 $15,000 $10 $12,000
Other Indirect Costs $55 $126,300 $65 $97,200 $64 $76,700
Financing $18 $41,560 $19 $28,580 $17 $20,720
Total Devel. Costs (excl. land)$508 $1,167,360 $570 $854,780 $524 $628,420
Residual Land Value
Net Sales Revenue $643 $1,479,360 $672 $1,008,000 $576 $691,200
<Less> Development Costs ($508)($1,167,360)($570)($854,780)($524)($628,420)
<Less> Builder Profit Margin*($154,100)($105,000)($72,000)
PSF Lnd $/Unit
Residual LV @ In-Lieu Fee of:
$3 $/SF $7 $174,540 $9 $59,070 ($0)($540)
$5 $/SF $7 $169,780 $8 $55,970 ($1)($3,020)
$10 $/SF $6 $157,900 $7 $48,220 ($3)($9,220)
$15 $/SF $6 $146,020 $6 $40,470 ($5)($15,420)
$20 $/SF $5 $134,140 $5 $32,720 ($7)($21,620)
$25 $/SF $5 $122,260 $4 $24,970 ($9)($27,820)
$50 $/SF $3 $62,850 ($2)($13,770)($18)($58,820)
*net of sales costs and builder overhead
W1 - Larger
Single Family
W2 - Smaller
Single Family W3 - Attached Condo
Kailua Kona / South Kona
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APPENDIX A TABLE 3D
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 100.0%
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site Improvements
Direct Home Construction
Fees & Permits
Potential In-Lieu Fee@$10/SF
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual LV @ In-Lieu Fee of:
$3 $/SF
$5 $/SF
$10 $/SF
$15 $/SF
$20 $/SF
$25 $/SF
$50 $/SF
*net of sales costs and builder overhead
WITH POTENTIAL IN-LIEU FEE
2,400 sf 1,400 sf 1,700 sf 1,750 sf
420 sf 0 sf 420 sf 420 sf
550 sf 180 sf 80 sf 80 sf
4 bedrooms 2.25 bedrooms 3 bedrooms 4 bedrooms
3.0 du/acre 9.6 du/acre 2.9 du/acre 3.5 du/acre
11,616 sf 3,630 sf 12,000 sf 10,000 sf
2.0 garage 1.5 surface 2.0 surface 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit Per SF Per Unit
$1,300 $3,120,000 $1,050 $1,470,000 $618 $1,050,000 $571 $1,000,000
($130)($312,000)($105)($147,000)($25)($42,000)($23)($40,000)
$1,170 $2,808,000 $945 $1,323,000 $593 $1,008,000 $549 $960,000
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$163 $392,000 $88 $123,000 $88 $150,000 $86 $150,000
$560 $1,344,000 $495 $693,000 $310 $527,000 $300 $525,000
$11 $27,000 $17 $24,000 $14 $24,000 $14 $24,000
$10 $24,000 $10 $14,000 $10 $17,000 $10 $17,500
$101 $241,900 $89 $124,700 $56 $94,900 $54 $94,500
$31 $74,650 $25 $34,780 $16 $28,010 $16 $27,780
$876 $2,103,550 $724 $1,013,480 $495 $840,910 $479 $838,780
$1,170 $2,808,000 $945 $1,323,000 $593 $1,008,000 $549 $960,000
($876)($2,103,550)($724)($1,013,480)($495)($840,910)($479)($838,780)
($374,400)($176,400)($105,000)($100,000)
$24 $347,410 $32 $143,250 $5 $74,390 $3 $33,880
$24 $342,450 $31 $140,350 $5 $70,880 $2 $30,260
$23 $330,050 $29 $133,120 $4 $62,090 $2 $21,220
$22 $317,650 $28 $125,890 $4 $53,310 $1 $12,180
$21 $305,260 $26 $118,660 $3 $44,530 $0 $3,140
$20 $292,860 $25 $111,420 $2 $35,750 ($0)($5,900)
$16 $230,860 $17 $75,260 ($1)($8,160)($4)($51,100)
W7 - Single Family
* reflective of pad sale in existing resort with established amenities, would be
less for ground-up resort, higher for ocean-front lots.
W6 - Single FamilyW4 - Single Family & Duplex W5 - Attached Condo
Kohala / Oceanfront Resorts Waikoloa Village Waimea
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APPENDIX A TABLE 3D
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 100.0%
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site Improvements
Direct Home Construction
Fees & Permits
Potential In-Lieu Fee@$10/SF
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual LV @ In-Lieu Fee of:
$3 $/SF
$5 $/SF
$10 $/SF
$15 $/SF
$20 $/SF
$25 $/SF
$50 $/SF
*net of sales costs and builder overhead
WITH POTENTIAL IN-LIEU FEE
1,700 sf 1,200 sf 1,500 sf
420 sf 420 sf 420 sf
80 sf 60 sf 60 sf
3.25 bedrooms 3.0 bedrooms 3.0 bedrooms
1.6 du/acre 2.9 du/acre 3.5 du/acre
21,780 sf 12,000 sf 10,000 sf
2.0 garage 2.0 garage 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit
$426 $725,000 $325 $390,000 $420 $630,000
($17)($29,000)($13)($15,600)($17)($25,200)
$409 $696,000 $312 $374,400 $403 $604,800
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$80 $136,000 $113 $135,000 $117 $175,000
$240 $408,000 $255 $306,000 $245 $367,500
$14 $24,000 $20 $24,000 $16 $24,000
$10 $17,000 $10 $12,000 $10 $15,000
$43 $73,400 $46 $55,100 $44 $66,200
$13 $22,780 $15 $18,180 $15 $21,940
$401 $681,180 $459 $550,280 $446 $669,640
$409 $696,000 $312 $374,400 $403 $604,800
($401)($681,180)($459)($550,280)($446)($669,640)
($72,500)($39,000)($63,000)
($2)($45,380)($14)($206,200)($9)($116,990)
($2)($48,900)($14)($208,680)($10)($120,090)
($2)($57,680)($14)($214,880)($10)($127,840)
($2)($66,460)($15)($221,080)($11)($135,580)
($3)($75,240)($15)($227,280)($11)($143,330)
($3)($84,030)($16)($233,480)($12)($151,080)
($5)($127,940)($18)($264,470)($15)($189,830)
E1 - Single Family E2 - Single Family E3 - Single Family
HamakuaHiloPuna
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APPENDIX A TABLE 3E
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS NO REQUIREMENT
HAWAI'I COUNTY
Living Area Net SF 2,300 sf 1,500 sf 1,200 sf
Garage/Carport SF 420 sf 420 sf 0 sf
Lanai/Porch 120 sf 60 sf 60 sf
Average Number of Bedrooms 3.50 bedrooms 3.0 bedrooms 2.0 bedrooms
Gross Density 1.7 du/acre 6.4 du/acre 13.6 du/acre
Avg Lot Size 20,000 sf 5,445 sf 2,562 sf
Parking Ratio/ Type 2.0 garage 2.0 garage 1.5 surface
Revenue Percent Per SF Per Unit Per SF Per Unit Per SF Per Unit
Market Rate Units 100.0%$670 $1,541,000 $700 $1,050,000 $600 $720,000
<Less> Sales Expense ($27)($61,640)($28)($42,000)($24)($28,800)
Sales Net of Sales Expenses $643 $1,479,360 $672 $1,008,000 $576 $691,200
Development Costs Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
Site Improvements $109 $250,000 $100 $150,000 $58 $70,000
Direct Home Construction $305 $701,500 $360 $540,000 $355 $426,000
Fees & Permits $11 $25,000 $16 $24,000 $19 $23,000
Affordable Housing Credits $0 $0 $0 $0 $0 $0
Other Indirect Costs $55 $126,300 $65 $97,200 $64 $76,700
Financing $18 $40,800 $19 $28,100 $17 $20,300
Total Devel. Costs (excl. land)$497 $1,143,600 $560 $839,300 $513 $616,000
Residual Land Value
Net Sales Revenue $643 $1,479,360 $672 $1,008,000 $576 $691,200
<Less> Development Costs ($497)($1,143,600)($560)($839,300)($513)($616,000)
<Less> Builder Profit Margin*($154,100)($105,000)($72,000)
Residual Land Value (Per Unit)$181,660 $63,700 $3,200
Per Acre $316,500 $407,700 $43,500
Per Sq. Ft. of Land Area (Gross)$7 $9 $1
*net of sales costs and builder overhead
W1 - Larger
Single Family
W2 - Smaller
Single Family W3 - Attached Condo
Kailua Kona / South Kona
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APPENDIX A TABLE 3E
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 100.0%
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site Improvements
Direct Home Construction
Fees & Permits
Affordable Housing Credits
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual Land Value (Per Unit)
Per Acre
Per Sq. Ft. of Land Area (Gross)
*net of sales costs and builder overhead
NO REQUIREMENT
2,400 sf 1,400 sf 1,700 sf 1,750 sf
420 sf 0 sf 420 sf 420 sf
550 sf 180 sf 80 sf 80 sf
4 bedrooms 2.25 bedrooms 3 bedrooms 4 bedrooms
3.0 du/acre 9.6 du/acre 2.9 du/acre 3.5 du/acre
11,616 sf 3,630 sf 12,000 sf 10,000 sf
2.0 garage 1.5 surface 2.0 surface 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit Per SF Per Unit
$1,300 $3,120,000 $1,050 $1,470,000 $618 $1,050,000 $571 $1,000,000
($130)($312,000)($105)($147,000)($25)($42,000)($23)($40,000)
$1,170 $2,808,000 $945 $1,323,000 $593 $1,008,000 $549 $960,000
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$163 $392,000 $88 $123,000 $88 $150,000 $86 $150,000
$560 $1,344,000 $495 $693,000 $310 $527,000 $300 $525,000
$11 $27,000 $17 $24,000 $14 $24,000 $14 $24,000
$0 $0 $0 $0 $0 $0 $0 $0
$101 $241,900 $89 $124,700 $56 $94,900 $54 $94,500
$31 $73,800 $25 $34,300 $16 $27,400 $16 $27,200
$866 $2,078,700 $714 $999,000 $484 $823,300 $469 $820,700
$1,170 $2,808,000 $945 $1,323,000 $593 $1,008,000 $549 $960,000
($866)($2,078,700)($714)($999,000)($484)($823,300)($469)($820,700)
($374,400)($176,400)($105,000)($100,000)
$354,900 *$147,600 *$79,700 $39,300
$1,064,700 *$1,417,000 *$231,400 $137,000
$24 $33 $5 $3
W7 - Single Family
* reflective of pad sale in existing resort with established amenities, would be less for ground-up resort, higher for ocean-front lots.
W6 - Single FamilyW4 - Single Family & Duplex W5 - Attached Condo
Kohala / Oceanfront Resorts Waikoloa Village Waimea
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APPENDIX A TABLE 3E
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 100.0%
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site Improvements
Direct Home Construction
Fees & Permits
Affordable Housing Credits
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual Land Value (Per Unit)
Per Acre
Per Sq. Ft. of Land Area (Gross)
*net of sales costs and builder overhead
NO REQUIREMENT
1,700 sf 1,200 sf 1,500 sf
420 sf 420 sf 420 sf
80 sf 60 sf 60 sf
3.25 bedrooms 3.0 bedrooms 3.0 bedrooms
1.6 du/acre 2.9 du/acre 3.5 du/acre
21,780 sf 12,000 sf 10,000 sf
2.0 garage 2.0 garage 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit
$426 $725,000 $325 $390,000 $420 $630,000
($17)($29,000)($13)($15,600)($17)($25,200)
$409 $696,000 $312 $374,400 $403 $604,800
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$80 $136,000 $113 $135,000 $117 $175,000
$240 $408,000 $255 $306,000 $245 $367,500
$14 $24,000 $20 $24,000 $16 $24,000
$0 $0 $0 $0 $0 $0
$43 $73,400 $46 $55,100 $44 $66,200
$13 $22,200 $15 $17,800 $14 $21,400
$390 $663,600 $448 $537,900 $436 $654,100
$409 $696,000 $312 $374,400 $403 $604,800
($390)($663,600)($448)($537,900)($436)($654,100)
($72,500)($39,000)($63,000)
($40,100)($202,500)($112,300)
($64,200)($588,100)($391,300)
($1)($14)($9)
E1 - Single Family E2 - Single Family E3 - Single Family
HamakuaHiloPuna
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APPENDIX A TABLE 3F
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS WITH USE OF CREDITS AND 20% INCREASE IN DENSITY
HAWAI'I COUNTY
Living Area Net SF 2,300 sf 1,500 sf 1,200 sf
Garage/Carport SF 420 sf 420 sf 0 sf
Lanai/Porch 120 sf 60 sf 60 sf
Average Number of Bedrooms 3.50 bedrooms 3.0 bedrooms 2.0 bedrooms
Gross Density (20% bonus)2.1 du/acre 7.7 du/acre 16.3 du/acre
Avg Lot Size 20,000 sf 5,445 sf 2,562 sf
Parking Ratio/ Type 2.0 garage 2.0 garage 1.5 surface
Revenue Percent Per SF Per Unit Per SF Per Unit Per SF Per Unit
Market Rate Units 100.0%$670 $1,541,000 $700 $1,050,000 $600 $720,000
<Less> Sales Expense ($27)($61,600)($28)($42,000)($24)($28,800)
Sales Net of Sales Expenses $643 $1,479,400 $672 $1,008,000 $576 $691,200
Development Costs Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
Site / Intract Costs $90 $208,000 $83 $125,000 $49 $59,000
Direct Home Construction $305 $701,500 $360 $540,000 $355 $426,000
Fees & Permits $11 $25,000 $16 $24,000 $19 $23,000
Affordable Housing Credits $4 $10,000 $7 $10,000 $8 $10,000
Other Indirect Costs $55 $126,300 $65 $97,200 $64 $76,700
Financing $17 $39,000 $18 $27,400 $17 $20,200
Total Devel. Costs (excl. land)$483 $1,109,800 $549 $823,600 $512 $614,900
Residual Land Value
Net Sales Revenue $643 $1,479,400 $672 $1,008,000 $576 $691,200
<Less> Development Costs ($483)($1,109,800)($549)($823,600)($512)($614,900)
<Less> Builder Profit Margin*($154,100)($105,000)($72,000)
Residual Land Value (Per Unit)$215,500 $79,400 $4,300
Per Acre $450,600 $609,800 $70,200
Per Sq. Ft. of Land Area (Gross)$10 $14 $2
*net of sales costs and builder overhead
Kailua Kona / South Kona
W1 - Larger
Single Family
W2 - Smaller
Single Family W3 - Attached Condo
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APPENDIX A TABLE 3F
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density (20% bonus)
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 100.0%
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site / Intract Costs
Direct Home Construction
Fees & Permits
Affordable Housing Credits
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual Land Value (Per Unit)
Per Acre
Per Sq. Ft. of Land Area (Gross)
*net of sales costs and builder overhead
WITH USE OF CREDITS AND 20% INCREASE IN DENSITY
2,400 sf 1,400 sf 1,700 sf 1,750 sf
420 sf 0 sf 420 sf 420 sf
550 sf 180 sf 80 sf 80 sf
4 bedrooms 2.25 bedrooms 3 bedrooms 4 bedrooms
3.6 du/acre 11.5 du/acre 3.5 du/acre 4.2 du/acre
11,616 sf 3,630 sf 12,000 sf 10,000 sf
2.0 garage 1.5 surface 2.0 surface 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit Per SF Per Unit
$1,300 $3,120,000 $1,050 $1,470,000 $618 $1,050,000 $571 $1,000,000
($130)($312,000)($105)($147,000)($25)($42,000)($23)($40,000)
$1,170 $2,808,000 $945 $1,323,000 $593 $1,008,000 $549 $960,000
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$136 $327,000 $73 $102,000 $74 $125,000 $71 $125,000
$560 $1,344,000 $495 $693,000 $310 $527,000 $300 $525,000
$11 $27,000 $17 $24,000 $14 $24,000 $14 $24,000
$4 $10,000 $7 $10,000 $6 $10,000 $6 $10,000
$101 $241,900 $89 $124,700 $56 $94,900 $54 $94,500
$30 $70,800 $24 $33,600 $16 $26,800 $15 $26,600
$842 $2,020,700 $705 $987,300 $475 $807,700 $460 $805,100
$1,170 $2,808,000 $945 $1,323,000 $593 $1,008,000 $549 $960,000
($842)($2,020,700)($705)($987,300)($475)($807,700)($460)($805,100)
($374,400)($176,400)($105,000)($100,000)
$412,900 *$159,300 *$95,300 $54,900
$1,486,400 *$1,835,100 *$332,100 $229,600
$34 $42 $8 $5
Kohala / Oceanfront Resorts Waikoloa Village Waimea
W4 - Single Family & Duplex W5 - Attached Condo
* reflective of pad sale in existing resort with established amenities, would be less
for ground-up resort, higher for ocean-front lots.
W6 - Single Family W7 - Single Family
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APPENDIX A TABLE 3F
PRO FORMA: FOR-SALE
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
Living Area Net SF
Garage/Carport SF
Lanai/Porch
Average Number of Bedrooms
Gross Density (20% bonus)
Avg Lot Size
Parking Ratio/ Type
Revenue Percent
Market Rate Units 100.0%
<Less> Sales Expense
Sales Net of Sales Expenses
Development Costs
Site / Intract Costs
Direct Home Construction
Fees & Permits
Affordable Housing Credits
Other Indirect Costs
Financing
Total Devel. Costs (excl. land)
Residual Land Value
Net Sales Revenue
<Less> Development Costs
<Less> Builder Profit Margin*
Residual Land Value (Per Unit)
Per Acre
Per Sq. Ft. of Land Area (Gross)
*net of sales costs and builder overhead
WITH USE OF CREDITS AND 20% INCREASE IN DENSITY
1,700 sf 1,200 sf 1,500 sf
420 sf 420 sf 420 sf
80 sf 60 sf 60 sf
3.25 bedrooms 3.0 bedrooms 3.0 bedrooms
1.9 du/acre 3.5 du/acre 4.2 du/acre
21,780 sf 12,000 sf 10,000 sf
2.0 garage 2.0 garage 2.0 garage
Per SF Per Unit Per SF Per Unit Per SF Per Unit
$426 $725,000 $325 $390,000 $420 $630,000
($17)($29,000)($13)($15,600)($17)($25,200)
$409 $696,000 $312 $374,400 $403 $604,800
Per NSF Per Unit Per NSF Per Unit Per NSF Per Unit
$66 $113,000 $94 $113,000 $97 $146,000
$240 $408,000 $255 $306,000 $245 $367,500
$14 $24,000 $20 $24,000 $16 $24,000
$6 $10,000 $8 $10,000 $7 $10,000
$43 $73,400 $46 $55,100 $44 $66,200
$13 $21,600 $14 $17,300 $14 $20,700
$382 $650,000 $438 $525,400 $423 $634,400
$409 $696,000 $312 $374,400 $403 $604,800
($382)($650,000)($438)($525,400)($423)($634,400)
($72,500)($39,000)($63,000)
($26,500)($190,000)($92,600)
($50,900)($662,100)($387,200)
($1)($15)($9)
Hilo Puna
E3 - Single Family
Hamakua
E1 - Single Family E2 - Single Family
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APPENDIX A TABLE 4A
PRO FORMA: APARTMENT
FEASIBILITY ANALYSIS WITH USE OF CREDITS
HAWAI'I COUNTY
Average Unit Size 700 sf 700 sf
Average Number of Bedrooms 1.5 bedrooms 1.5 bedrooms
Gross Density 16 du/acre 16 du/acre
Stories/ Construction Type 3 stories/ wood 3 stories/ wood
Parking Ratio/ Type 1.5 spaces/ surface 1.5 spaces/ surface
Revenue Percent Per SF Per Unit Per SF Per Unit
Market Rent Per Mo.100.0%$4.21 $2,950 $2.86 $2,000
Annual Rent $35,400 $24,000
Other Income $600 $600
Less: Vacancy/Credit Loss ($1,800)($1,230)
Effective Gross Income $34,200 $23,370
Operating Exp and Prop tax ($10,300)($10,300)
Net Operating Income $23,900 $13,070
Return on Cost 5.60%5.60%
Investment Supported $610 $427,000 $333 $233,000
Development Costs Per NSF Per Unit Per NSF Per Unit
Sitework $86 $60,000 $86 $60,000
Direct Costs $315 $220,500 $315 $220,500
Fees & Permits $33 $23,000 $33 $23,000
Affordable Housing Credits $14 $10,000 $14 $10,000
Other Indirect Costs $72 $50,500 $72 $50,500
Financing $18 $12,500 $18 $12,300
Total Development Cost (excl. land)$538 $376,500 $538 $376,300
Residual Land Value
Supported Investment $427,000 $233,000
<Less> Development Costs ($376,500)($376,300)
Residual Land Value (Per Unit)$51,000 ($143,000)
Per Acre $816,000 ($2,288,000)
Per Square Foot of Land Area $19 ($53)
* Net of utility allowance
East Hawai'iWest Hawai'i
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APPENDIX A TABLE 4B
PRO FORMA: APARTMENT
FEASIBILITY ANALYSIS EXISTING REQ. & ON-SITE UNITS - HIGHEST AMI LEVEL ALLOWED
HAWAI'I COUNTY
Average Unit Size 700 sf 700 sf
Average Number of Bedrooms 1.5 bedrooms 1.5 bedrooms
Gross Density 16 du/acre 16 du/acre
Stories/ Construction Type 3 stories/ wood 3 stories/ wood
Parking Ratio/ Type 1.5 spaces/ surface 1.5 spaces/ surface
Revenue Percent Per SF Per Unit Per SF Per Unit
Market Rent Per Mo.86.5%$4.21 $2,950 $2.86 $2,000
Rent 60% AMI Units*5.4%$1.48 $1,038 $1.48 $1,038
Rent 80% AMI Units*4.1%$2.08 $1,454 $2.08 $1,454
Rent 100% AMI Units*2.7%$2.67 $1,870 $2.67 $1,870
Rent 120% AMI Units*1.4%$3.27 $2,286 $2.86 $2,000
Average Monthly Rent $3.93 $2,748 $2.75 $1,922
Annual Rent $32,976 $23,069
Other Income $600 $600
Less: Vacancy/Credit Loss ($1,679)($1,183)
Effective Gross Income $31,897 $22,485
Operating Exp and Prop tax ($10,077)($10,077)
Net Operating Income $21,821 $12,409
Return on Cost 5.60%5.60%
Investment Supported $557 $390,000 $317 $222,000
Development Costs Per NSF Per Unit Per NSF Per Unit
Sitework $86 $60,000 $86 $60,000
Direct Costs $315 $220,500 $315 $220,500
Fees & Permits $33 $23,000 $33 $23,000
Affordable Housing Credits $0 $0 $0 $0
Other Indirect Costs $72 $50,500 $72 $50,500
Financing $17 $12,200 $17 $11,900
Total Development Cost (excl. land)$523 $366,200 $523 $365,900
Residual Land Value
Supported Investment $390,000 $222,000
<Less> Development Costs ($366,200)($365,900)
Residual Land Value (Per Unit)$24,000 ($144,000)
Per Acre $384,000 ($2,304,000)
Per Square Foot of Land Area $9 ($53)
* Net of utility allowance
West Hawai'i East Hawai'i
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APPENDIX A TABLE 4C
PRO FORMA: APARTMENT
FEASIBILITY ANALYSIS EXISTING REQ. & ON-SITE UNITS - AT AMI ELIGIBLE FOR MAX CREDIT
HAWAI'I COUNTY
Average Unit Size 700 sf 700 sf
Average Number of Bedrooms 1.5 bedrooms 1.5 bedrooms
Gross Density 16 du/acre 16 du/acre
Stories/ Construction Type 3 stories/ wood 3 stories/ wood
Parking Ratio/ Type 1.5 spaces/ surface 1.5 spaces/ surface
Revenue Percent Per SF Per Unit Per SF Per Unit
Market Rent Per Mo.90.0%$4.21 $2,950 $2.86 $2,000
Rent 60% AMI Units*10.0%$1.48 $1,038 $1.48 $1,038
Average Monthly Rent $3.94 $2,759 $2.72 $1,904
Annual Rent $33,105 $22,845
Other Income $600 $600
Less: Vacancy/Credit Loss ($1,685)($1,172)
Effective Gross Income $32,020 $22,273
Operating Exp and Prop tax ($10,135)($10,135)
Net Operating Income $21,885 $12,138
Return on Cost 5.60%5.60%
Investment Supported $559 $391,000 $310 $217,000
Development Costs Per NSF Per Unit Per NSF Per Unit
Sitework $86 $60,000 $86 $60,000
Direct Costs $315 $220,500 $315 $220,500
Fees & Permits $33 $23,000 $33 $23,000
Affordable Housing Credits $0 $0 $0 $0
Other Indirect Costs $72 $50,500 $72 $50,500
Financing $17 $12,200 $17 $11,900
Total Development Cost (excl. land)$523 $366,200 $523 $365,900
Residual Land Value
Supported Investment $391,000 $217,000
<Less> Development Costs ($366,200)($365,900)
Residual Land Value (Per Unit)$25,000 ($149,000)
Per Acre $400,000 ($2,384,000)
Per Square Foot of Land Area $9 ($55)
* Net of utility allowance
West Hawai'i East Hawai'i
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APPENDIX A TABLE 4D
PRO FORMA: APARTMENT
FEASIBILITY ANALYSIS WITH POTENTIAL IN-LIEU FEE
HAWAI'I COUNTY
Average Unit Size 700 sf 700 sf
Average Number of Bedrooms 1.5 bedrooms 1.5 bedrooms
Gross Density 16 du/acre 16 du/acre
Stories/ Construction Type 3 stories/ wood 3 stories/ wood
Parking Ratio/ Type 1.5 spaces/ surface 1.5 spaces/ surface
Revenue Percent Per SF Per Unit Per SF Per Unit
Market Rent Per Mo.100.0%$4.21 $2,950 $2.86 $2,000
Annual Rent $35,400 $24,000
Other Income $600 $600
Less: Vacancy/Credit Loss ($1,800)($1,230)
Effective Gross Income $34,200 $23,370
Operating Exp and Prop tax ($10,300)($10,300)
Net Operating Income $23,900 $13,070
Return on Cost 5.60%5.60%
Investment Supported $610 $427,000 $333 $233,000
Development Costs Per NSF Per Unit Per NSF Per Unit
Sitework $86 $60,000 $86 $60,000
Direct Costs $315 $220,500 $315 $220,500
Fees & Permits $33 $23,000 $33 $23,000
In-Lieu Fee $5 $3,500 $5 $3,500
Other Indirect Costs $72 $50,500 $72 $50,500
Financing $18 $12,330 $17 $12,060
Total Development Cost (excl. land)$528 $369,830 $528 $369,560
Residual Land Value
Supported Investment $427,000 $233,000
<Less> Development Costs ($369,830)($369,560)
Residual Land Value $57,000 ($137,000)
Residual LV @ In-Lieu Fee of: PSF Lnd $/Unit PSF Lnd $/Unit
$3 $/SF $22 $58,620 ($50)($135,110)
$5 $/SF $21 $57,170 ($50)($136,560)
$10 $/SF $20 $53,550 ($51)($140,180)
$15 $/SF $18 $49,940 ($53)($143,790)
$20 $/SF $17 $46,320 ($54)($147,410)
$25 $/SF $16 $42,700 ($55)($151,020)
$30 $/SF $14 $39,090 ($57)($154,640)
* Net of utility allowance
West Hawai'i East Hawai'i
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APPENDIX A TABLE 4E
PRO FORMA: APARTMENT
FEASIBILITY ANALYSIS NO REQUIREMENT
HAWAI'I COUNTY
Average Unit Size 700 sf 700 sf
Average Number of Bedrooms 1.5 bedrooms 1.5 bedrooms
Gross Density 16 du/acre 16 du/acre
Stories/ Construction Type 3 stories/ wood 3 stories/ wood
Parking Ratio/ Type 1.5 spaces/ surface 1.5 spaces/ surface
Revenue Percent Per SF Per Unit Per SF Per Unit
Market Rent Per Mo.100.0%$4.21 $2,950 $2.86 $2,000
Annual Rent $35,400 $24,000
Other Income $600 $600
Less: Vacancy/Credit Loss ($1,800)($1,230)
Effective Gross Income $34,200 $23,370
Operating Exp and Prop tax ($10,300)($10,300)
Net Operating Income $23,900 $13,070
Return on Cost 5.60%5.60%
Investment Supported $610 $427,000 $333 $233,000
Development Costs Per NSF Per Unit Per NSF Per Unit
Sitework $86 $60,000 $86 $60,000
Direct Costs $315 $220,500 $315 $220,500
Fees & Permits $33 $23,000 $33 $23,000
Affordable Housing Credits $0 $0 $0 $0
Other Indirect Costs $72 $50,500 $72 $50,500
Financing $17 $12,200 $17 $11,900
Total Development Cost (excl. land)$523 $366,200 $523 $365,900
Residual Land Value
Supported Investment $427,000 $233,000
<Less> Development Costs ($366,200)($365,900)
Residual Land Value (Per Unit)$60,800 ($132,900)
Per Acre $973,000 ($2,126,000)
Per Square Foot of Land Area $22 ($49)
* Net of utility allowance
West Hawai'i East Hawai'i
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APPENDIX A TABLE 5
CREDITS BY UNIT TYPE AND EFFECTIVE AFFORDABLE UNIT PERCENTAGES
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
For Sale Rental Finished Lots
AMI Level of Units
<60% AMI 2 2 1
60% to 80%2 1.5 1
80 to 100%1.5 1 0.5
100 to 120%1 0.5 N/A
120% to 140%0.5 N/A N/A
Minimum Credits by Type
Credit Level 1 or Greater 20%20%20%
Credit Level 1.5 or Greater 30%30%
Credit Level 2 40%40%
Affordable Units Required at Minimum Affordability Levels
Percent of Affordable Units Required by Income
<60% AMI 0%40%0%
60% to 80%40%30%20%
80 to 100%30%20%80%
100 to 120%20%10%0%
120% to 140%10%0%0%
Subtotal 100%100%100%
Effective Percent of Project That Must Be Affordable
Average credit per Aff Unit, at Minimums 1.50 1.50 0.60
Example of a 100-Unit Project
Credits Required 20 20 20
Aff. Units Needed @1.5 credits per unit on average 13.50 13.50 33.50
Effective Affordability % Req. at Min. Credit Levels 13.5%13.5%33.5%
Percent of Units in Project
Market Rate 86.5%86.5%66.5%
60% AMI Units 0.0%5.4%0.0%
80% AMI Units 5.4%4.1%6.7%
100% AMI Units 4.1%2.7%26.8%
120% AMI Units 2.7%1.4%0.0%
140% AMI Units 1.4%0.0%0.0%
100.0%100.0%100.0%
Percent Affordable at Max Credit Levels 10%10%20%
Credit per unit or lot provided:1 credit per lot2 credits per unit
Credit Schedule - Chapter 11
Percent Affordable Units Required at Maximum Credit Level
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APPENDIX A TABLE 6
FINANCIAL FEASIBILITY - COMMON ASSUMPTIONS
HAWAI'I COUNTY
Living Area
Cost $/SF Fees & Permits
W1 Single Family Larger $275 $305 /NSF Living $25,000 /unit $250,000 /unit W1 Single Family Larger $670 /NSF
W2 Single Family Smaller $315 $360 /NSF Living $24,000 /unit $150,000 /unit W2 Single Family Smaller $700 /NSF
W3 Attached Condo $340 $355 /NSF Living $23,000 /unit $70,000 /unit W3 Attached Condo $600 /NSF
W4 Single Family (Kohala Resort)$510 $560 /NSF Living $27,000 /unit $392,000 /unit W4 Single Family (Kohala Resort)$1,300 /NSF
W5 Attached Condo (Kohala Resort)$420 $495 /NSF Living $24,000 /unit $123,000 /unit W5 Attached Condo (Kohala Resort)$1,050 /NSF
W6 Waikoloa Single Family $270 $310 /NSF Living $24,000 /unit $150,000 /unit W6 Waikoloa Single Family $618 /NSF
W7 Waimea Single Family $260 $300 /NSF Living $24,000 /unit $150,000 /unit W7 Waimea Single Family $571 /NSF
E1 Hilo Single Family $207 $240 /NSF Living $24,000 /unit $136,000 /unit E1 Hilo Single Family $426 /NSF
E2 Puna Single Family $211 $255 /NSF Living $24,000 /unit $135,000 /unit E2 Puna Single Family $325 /NSF
E3 Hamakua Single Family $209 $245 /NSF Living $24,000 /unit $175,000 /unit E3 Hamakua Single Family $420 /NSF
Wa West Hawai'i Apartment $285 $315 /NSF Living $23,000 /unit $60,000 /unit
Ea East Hawai'i Apartment $285 $315 /NSF Living $23,000 /unit $60,000 /unit
Garage / Carport Lanai / Balcony / Covered Porch Market Apartment Rents
Single Family W1, W2, W4, W6, W7 $125 /SF Single Family $90 /SF Wa West Hawai'i Apartment $4.21 /SF/mo
Single Family E1 to E3 $105 /SF Condo Balcony $170 /SF Ea East Hawai'i Apartment $2.86 /SF/mo
Misc. Income $50 /unit/mo
Appliances
Single Family: W1,W2, W6, W7 $6,500 Apartment Operating Expenses
W4 Single Family (Kohala Resort)$20,000 Vacancy 5.0%vacancy
W5 Attached Condo (Kohala Resort)$10,000 Operating Expense and Reserves $6,800 /unit/yr
Single Family: E1, E2, E3 $3,500 Property Taxes - Market $3,500 /unit/yr
Apartments $2,000 Property Taxes - Affordable $1,845 /unit/yr
Indirect Construction Costs 18%of directs Investment Thresholds
including A&E, taxes, insur, legal, marketing, overhead, contingency
Stabilized Return on Cost (ROC)
Financing Apartments - Market 5.6%ROC
60%LTC
5.5%/year Profit / Closing Costs
1%loan Closing Costs 4%sales
18 months Builder Threshold Net Profit Margin 10%sales
Loan-to-Cost
Interest Rate
Points and Fees
Loan Term
Avg Outstanding Balance 55%loan Builder Threshold Net Profit - Resort 12%sales
Excess Unit Credit Purchase Cost $50,000 /Credit $10,000 /Market Unit (=credit cost x 20%)
Estimate based on known transactions. Although credits restricted to East Hawaii may sell for less, OHCD records do not indicate any current availability.
Site / Intract
Improvements
Total w/Garage,
Lanai, Appliance
($/SF living area) Market Sales Prices
Development Cost Assumptions Income/Revenues
House Construction
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APPENDIX A TABLE 7
ESTIMATED COST TO DEDICATE SITE FOR LIHTC PROJECT
FEASIBILITY ANALYSIS
HAWAI'I COUNTY
A Credits Required:20%
B Assumed Gross Density of LIHTC Project 16 du/acre
C Site area required per Market Rate unit =1/B x A 0.0125 acres
D Estimated value of improved site dedicated by market rate developer $20 /SF of land
E Estimated Cost Per Market Rate Unit = C x 43,560 x D. $10,890
Estimate results in similar cost to purchased credits ($10,000 per unit) based on the assumptions noted
above.
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APPENDIX B: RESIDENTIAL MARKET DATA
Appendix B-1
Recent & Pipeline ProjectsUpdate to Chapter 11
County of Hawaii, HI
Unit Type Single Family Single Family Single Family Single Family
Project Name Cottages on Ali'i Drive Holua Kai at Keauhou New Wainani Estates Kahaolino
Location Kailua Kona Kailua Kona Kailua Kona Hualalai, Kailua Kona
Developer Stanford Carr Brookfield DR Horton Tinguely
Status selling Built and Sold Sold out
Lot Sizes (sf)4,000 - 11,361 5,278 - 9,479 sf (10
recent sales)
10,000 - 20,000+ 20,000
Density (du/ac)7.9 dua
No. of Units 56 units 40 units 50 unitsnotes
Unit Size Range 3 BR/2BA: 1,430 sf3 BR/2.5 BA: 1,767 sf
3BR/2.5BA: 1,839 sf
3BR/3BA: 1,551 sf
4BR/2.5BA: 2,092 sf
4BR/2.5BA: 2,192 sf
1,653 to 2,489 sf 3BR/2BA 1,366 sf3-4BR/2BA 1,512-1594
sf
3BR/2BA 1,618 sf
Average Unit Size 1,815 sf 1,500 sf (sales data)
Bedroom Mix 3 and 4 BRs Mostly 3BRs
1-Bedrooms some 4 BRs
2-Bedrooms
3-Bedrooms 66%
4-Bedrooms 34%
Avg No. Bedrooms 3.3 BRs 3.1 BR (sales data)
Building Type single family detached, one- and two-story w/attached garages
one and two-story homes one-story
Sales Price / Rent Levels Starting Prices: $825k, $845k, $859k, $920k, $935k, $979k.
$800,000 - $1.8 million. See sales data.$600,000 - $1.1 million. See sales data.Sold Apr 2022: $336,000 for 20,000 sf lotSold June 2021: $329,000 for 22,000
sf lot
2018: Homes $800,000 - $1,000,000
Kailua Kona
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Appendix B-1
Recent & Pipeline ProjectsUpdate to Chapter 11
County of Hawaii, HI
Unit Type
Project Name
Location
Developer
Status
Lot Sizes (sf)
Density (du/ac)
No. of Unitsnotes
Unit Size Range
Average Unit Size
Bedroom Mix 1-Bedrooms
2-Bedrooms
3-Bedrooms
4-Bedrooms
Avg No. BedroomsBuilding Type
Sales Price / Rent Levels
Condominums Resort Single Family Multi-family SF and MF
Alii Drive Hale Alani
The Shores at Kohanaiki
Pualani Makai Palamanui - Phase 1 of 4
Kailua-Kona Alani Loop and Lemi Pl Kailua-Kona nr Hawaii Com. Col., Kona
Landowner - Jekaterina
Mysin
Pua'a Development/Suffolk Hunt Development
Proposed May 2021 Built For Sale on Loopnet. Approved 12/2020
26.3 dua 2.6 dua 6.3 dua
6 units 48 units 386 units 250 units160 market rate mixed income
2,173 - 2,269 sf per unit with ~1,100 sf lanai.
2,219 sf
67%
33%100%
2.4 BRs 3.0 BRs
Four-stories over parking podium (five total)
One-story single family homes with a mix of detached and attached 2-car garages.
Total Project: 1,116 homes. Long Delayed. 2018: completing zoning and entitlement.
Recently sold: $2.3 million - $4.57 million. Land for sale for $8.5 million. Includes water credits, entitlements, plans, predevelopment work.
Zoning allows up to 490 MF units. (386 units
includes larger retail component)
Kailua Kona
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Appendix B-1
Recent & Pipeline ProjectsUpdate to Chapter 11
County of Hawaii, HI
Unit Type
Project Name
Location
Developer
Status
Lot Sizes (sf)
Density (du/ac)
No. of Unitsnotes
Unit Size Range
Average Unit Size
Bedroom Mix 1-Bedrooms
2-Bedrooms
3-Bedrooms
4-Bedrooms
Avg No. BedroomsBuilding Type
Sales Price / Rent Levels
Resort Single Family Resort Townhome & Condos Resort Single Family Resort Condo
Kala at Villages at Aina Lea Kupu at Villages at Aina Lea Ainamalu at Waikoloa Beach
Resort
Ainamalu Condos at Waikoloa
Beach ResortKohala Coast Kohala Coast Kohala Coast Kohala Coast
2022: not fully approved, long history, bankruptcy,etc.2022: not fully approved long history, bankruptcy,etc.2022: 272 units left Approved. Some pads complete
1.5 dua 7.6 dua 1.4 dua 12.1 dua
620 units 1,630 units 350 units 60 units(SF + Luxury Villas)TH and condo of 420 total w condos
974 sf
40%
60%
3.3 BRs 1.6 BRs
Single Family Homes within Aina Le'a - a master planned commty, 1,000 acres and 2250 homes
Three-story buildings within Aina Le'a - a master planned commty, 1,000 acres and 2500 homes
2018 first homes went into escrow. Expected 10-year buildout.
Also "Lehua" 62 luxury villas on 139 acres Unit count might include affordable units. 4BD/4BA, 2727 sf, $3 million, 12/20214BD/4BA 2752 sf, $2.85 million,
9/2021
5BD/5BA 3012 sf, $2.55 million,
8/2021
3BD/3BA 2040 sf, $2.7 million, 4/2022Four other units sold $1 - $1.4 million
Kohala Coast
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Appendix B-1
Recent & Pipeline ProjectsUpdate to Chapter 11
County of Hawaii, HI
Unit Type
Project Name
Location
Developer
Status
Lot Sizes (sf)
Density (du/ac)
No. of Unitsnotes
Unit Size Range
Average Unit Size
Bedroom Mix 1-Bedrooms
2-Bedrooms
3-Bedrooms
4-Bedrooms
Avg No. BedroomsBuilding Type
Sales Price / Rent Levels
Resort, mix of detached and
attached
Resort Single Family and Duplex Resort Single Family Resort Home Sites
Laule'a at Mauna Lani Ka Milo at Mauna Lani Hapuna Estates Homesites Hapuna Estates Development
Pads68-1210 S Kaniku Dr, Kamuela 68-1122 N Kaniku Dr, Kamuela Mauna Kea Resort Mauna Kea Resort
Sold Out Sold/In Escrow/For Sale
19,000 sf to 1 ac+
3.3 dua 4.5 dua 2 to 7 dua
17 units 137 units 33 lots 133 lotsin three phases Parcels D-2, D-3, D-5, F
2,195 gsf, 2,770 gsf, 2,887 gsf 3 and 4 BRs, 1,653 - 2,491 sf n/a
n/a
2.0 BRs
6 4BR detached units and 11 3- and 4-BR attached. With garages, pools, lanais. Ocean or mountain views.
37 Single family and 100 paired homes w/2-car garages
Unit 11B1 sold for $3.4 million in 2021.Phase I includes three home/lot packages. One is listed for $6.9 million and one at $5.9 million.
Lot 23; $1.5 million (22k sf). Lot 24:
$1.5 mm, 23k sf.
Fully entitled, infrastructure. Development pad sales in golf resort from $562k per acre to
$1.75 M per acre.
Kohala Coast
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Appendix B-1
Recent & Pipeline ProjectsUpdate to Chapter 11
County of Hawaii, HI
Unit Type
Project Name
Location
Developer
Status
Lot Sizes (sf)
Density (du/ac)
No. of Unitsnotes
Unit Size Range
Average Unit Size
Bedroom Mix 1-Bedrooms
2-Bedrooms
3-Bedrooms
4-Bedrooms
Avg No. BedroomsBuilding Type
Sales Price / Rent Levels
Hawi Waimea
Single Family Single Family Single Family,
Timeshare, Multi-family
Apartments Apartments Single Family Single Family
KeOlalani Sunset Ridge Kumu Hou Lofts at Waikoloa Waikoloa
Heights
Hanuala Village Waimea Parkside
nr Waikoloa Vil skate
park
near Hulu St. Waikoloa
Village
Waikoloa Plaza North Kohala / Hawi Waimea
Towne Waikoloa Land
Company
Meridian Pacific John Bertsch Tinguely Tinguely
12/2021 grading roads Phase 1A Under Cxn. Open June 2022.partially built, available lots four lots left
Min Lot 10,000 sf 10,000 sf
Ph 1: 1.9 gross dua
2,400 units 16 units 33 units 34 units 39 units10 years, Ph 1: 276 units
87 units under cxn.
(lots)(40 lots - one park)
3BR: 1,572 - 1,798 sf 2BR/1BA: 602 sf Studio, 1BR and 2BR 3BR/2BA: 1,733 sf4BR/3BA: 2,392 sf
4BR/3.5BA: 2,667 sf
3BR/2.5BA: 2,105 sf
3BR/2.5BA: 2,218 sf
4BR/3.5BA: 2,975 sf3BR/2.5BA; 2,256 sf
602 sf 2,271 sf
100%
100%54%
46%
3.0 BRs 3.0 BRs 2.0 BRs 3.5 BRs
11 3-story buildings with surface parking.one and two-story homes
Likely to sell in the low $1 millions (1/2022 article).
Lot for sale: 11,000 sf
$299,000 incl. building
pemits, water
2BR/602 sf: $2,450/mo
Additional phases
planned
lots for sale Two units sold recently. One built in 2016, sold in 2021 for $1.5 m. One
built in 2008, 1700 sf,
sold for $1.575 m in
2021.
Waikoloa Village
900 timeshares, 264 multifamily (project website says timeshare), 25 single
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Appendix B-1
Recent & Pipeline ProjectsUpdate to Chapter 11
County of Hawaii, HI
Unit Type
Project Name
Location
Developer
Status
Lot Sizes (sf)
Density (du/ac)
No. of Unitsnotes
Unit Size Range
Average Unit Size
Bedroom Mix 1-Bedrooms
2-Bedrooms
3-Bedrooms
4-Bedrooms
Avg No. BedroomsBuilding Type
Sales Price / Rent Levels
Single Family Single Family Single Family Single Family
Keaau Village Extension Ainaloa Estates Subdivision Hilo Hillside Puainako Heights
Keaau Puna District Hilo Kukuau, South Hilo
W. H. Shipman Puainako Heights Land
Investment
2021: preparing application; needs rezoning, subdiv., permitting 2019: Phase 2 selling
1 acre lots
2.1 dua
940 units 60 lots 337 unitsin two phases with comm'l Phase 2 159 acres
Phase 1, 49 SFD: 4BD/2BA 1,769 sf
3BR/2.5BA 1,924 sf
4BD/3BA 2,785 sf
4BR/3BA 2,399 sf
2219sf est
318 single fam (one and two-story), 19 townhomes
Lot for sale: .275 acres, $45,000New home for sale: 3BD/2BA 1212 sf, .28 acre lot, $408,000, catchment
water.
See sales data table.
Hilo / Puna / Keaau
Prepared by Keyser Marston Associates, Inc.File Name: \\SF-FS2\wp\13\13996\001\Market Survey and Prototypes 12-9-23.xlsx;project overview rev;hgr Page 99
Appendix B-2
Median Sales Prices
Update to Chapter 11
County of Hawaii, HI
Median Price % Change Median Price % Change
2015 $330,400 $285,400
2016 $330,100 -0.1%$302,600 6.0%
2017 $350,100 6.1%$318,300 5.2%
2018 $362,900 3.7%$347,900 9.3%
2019 $377,900 4.1%$362,900 4.3%
2020 $413,700 9.5%$392,800 8.2%
2021 $480,400 16.1%$483,500 23.1%
2022 $501,000 4.3%$570,000 17.9%
Jan-Sept 2023 $487,000 -2.8%$577,400 1.3%
Annualized 5.1%9.5%not upd
Source: UHERO, Construction & Housing: Home Resale and Prices Table.
CondominiumsSingle Family Homes
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
2015 2016 2017 2018 2019 2020 2021 2022 Jan-Sept2023
Median Sales Prices, Single Family Homes, County of Hawaii
Prepared by Keyser Marston Associates, Inc.
Filename: \\SF-FS2\wp\13\13996\001\Market Survey and Prototypes 12-9-23.xlsx;Median prices;3/25/2024;hgr Page 100
Appendix B-3
West Hawai'i Home Sales: June 2021 - June 2022
Update to Chapter 11
County of Hawaii, HI
Source: Redfin, June 2022
Kailua Kona -SFD (W1)
Kailua Kona -SFD2 (W2)
Kohala -SFD (W4)
Waikoloa -SFD (W6)
Waimea -SFD (W7)$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
500 1,000 1,500 2,000 2,500 3,000 3,500 4,000Square Footage
West Hawai'i Single Family Home Sales
Kailua Kona sales
Kohala Coast sales
Waikoloa Village sales
Waimea sales
Prototypes
Kailua Kona -Condo (W3)
Kohala -Condo (W5)
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
0 500 1,000 1,500 2,000 2,500 3,000Square Footage
West Hawai'i Condominium Home Sales
Kailua Kona sales
Kohala Coast sales
Waikoloa Village sales
Prototypes
Prepared by Keyser Marston Associates, Inc.
Filename: \\SF-FS2\wp\13\13996\001\Market Survey and Prototypes 12-9-23.xlsx;West Sales Prior 12 Mos;3/25/2024;hgr Page 101
Appendix B-4
East Hawai'i Home Sales: June 2021 - June 2022
Update to Chapter 11
County of Hawaii, HI
Source: Redfin, June 2022
Hilo SFD (E1)
Puna SFD (E2)
Hamakua SFD (E3)
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
0 500 1000 1500 2000 2500 3000 3500
Square Feet
East Hawai'i Single Family Detached Homes Built Since 2012
Homes >500 sf, Lots<3 acres
Prototypes Hilo Sales Hamakua sales puna sales
Linear (Hilo Sales)Linear (Hamakua sales)Linear (puna sales)
Prepared by Keyser Marston Associates, Inc.
Filename: \\SF-FS2\wp\13\13996\001\Market Survey and Prototypes 12-9-23.xlsx;East Sales Prior 12 mos;3/25/2024;hgr Page 102
Appendix B-5
Newer Single Family Detached Units for Sale
Update to Chapter 11
County of Hawaii, HI
CITY LOCATION ADDRESS BEDS BATHS SQUARE FEET LOT SIZE ASKING PRICE $/SF YEAR BUILT
Kailua Kona
Holualoa Kona Uplands 75-5411 Uluwehi Pl 4 3.5 2,646 222,504 $2,250,000 $850 2019Kailua Kona Kailua Kona 75-5944 Kakalina Rd 3 3 1,400 48,221 $1,049,000 $749 2022
Kailua Kona Kona View Estates 74-4763 Waiha Loop 4 4 3,053 43,560 $2,695,000 $883 2022Kailua Kona Kona View Estates 74-4730 Waiha Loop 3 3 2,484 43,996 $2,099,000 $845 2021
Kailua Kona Kona Vistas Subdivision 76-4306 Liholiho Pl 4 3 2,610 19,923 $2,100,000 $805 2022
Kailua Kona Kahaolino Subdivision 73-4268 Kiekie St 3 2 2,102 32,335 $1,400,000 $666 2022
Kailua Kona Kailua View Estates Subdivision 75-5853 Lulu Pl 4 3 1,616 16,789 $1,450,000 $897 2019
Kailua Kona Kokua Loa Subdivision 6 Kokua Loa 4 3 2,296 10,071 $1,150,000 $501 2021
Kailua Kona Kona Hills Estates Subdivision 73-4449 Hane St 4 3 2,608 43,560 $1,795,000 $688 2021
Kailua Kona Kona Palisades 73-4342 Koikoi St 4 4 2,802 10,125 $1,580,000 $564 2021
Kailua Kona Kuakini Heights Subdivision 77-6621 Kuakini Hwy 5 4 2,280 9,656 $1,450,000 $636 2019
Kailua Kona Kukio/kaupulehu Lot 4 - A Incr 1 Ph 1 72-1019 Kekahawaiole Dr 4 4.5 4,489 34,412 $8,500,000 $1,894 2022
Under Construction / Future Development
Kailua Kona Kamoalii, The Cottages on Ali'i Drive 3 2 2,186 $825,000 $377 2022
Kailua Kona Kamoalii, The Cottages on Ali'i Drive 3 2.5 2,256 $920,000 $408 2022
Kailua Kona Kamoalii, The Cottages on Ali'i Drive 3 3 2,186 $845,000 $387 2022
Kailua Kona Kamoalii, The Cottages on Ali'i Drive 3 3 1,968 $859,000 $436 2022
Kailua Kona Onealii, The Cottages on Ali'i Drive 4 3 2,506 $935,000 $373 2022
Kailua Kona Kealii, The Cottages on Ali'i Drive 4 3 2,619 $979,000 $374 2022
Kohala Coast
Kamuela Hapuna Estates At Mauna Kea Resort 62-3768 Amaui Dr 5 5.5 4,334 49,049 $7,000,000 $1,615 2021
Kamuela Hapuna Estates At Mauna Kea Resort 62-3760 Amaui Dr 5 5.5 4,969 48,439 $6,900,000 $1,389 2022KamuelaKaunaoa Subdivision 62-3762 Kaunaoa Nui Rd 5 6 4,288 26,785 $7,995,000 $1,865 2022
Kamuela Kohala Waterfront 59-121 Kihi Kihi Pl 4 4 3,102 19,585 $5,950,000 $1,918 2022KealakekuaHokulia Phase 1 81-6575 Hiaaiono Pl 4 4.5 4,774 50,094 $7,995,000 $1,675 2019
Kohala Coast Kaunaoa Subdivision 62-3922 Kaunaoa Iki Rd 4 4.5 3,405 43,808 $7,195,000 $2,113 2021
Waimea Kamuela Lakeland 64-424 Leleaka Loop 3 2.5 1,424 8,873 $685,000 $481 2020
East Hawai'i
Keaau Ainaloa 16-2113 Ohia Dr/mauna Kea Unit 12 8 4,848 48,000 $1,528,000 $315 2022
Keaau Hawaiian Paradise Park 15-1449 7th Ave (hinahina)3 2 1,308 43,560 $459,000 $351 2022
Keaau Hawaiian Paradise Park 15-1792 20th Ave (melia)3 3 1,286 43,560 $545,000 $424 2022
Keaau Hawaiian Paradise Park 15-1710 19th Ave (manako)3 3 1,332 43,560 $509,000 $382 2022
Keaau Hawaiian Paradise Park 15-1714 19th Ave (manako)3 2 1,455 43,560 $549,000 $377 2022KeaauHawaiian Paradise Park 15-1795 26th Ave (olena)3 2 1,568 43,560 $595,000 $379 2022
Keaau Hawaiian Paradise Park 15-2046 33rd Ave (uluhe)3 2 1,328 43,560 $495,000 $373 2022KeaauHawaiian Paradise Park 15-1621 18th Ave (maia)3 2 1,344 43,560 $515,000 $383 2022
Keaau Hawaiian Paradise Park 15-1759 26th Ave (olena)4 2.5 2,012 43,560 $699,000 $347 2021
Keaau Orchid Land Estates 16-1618 Keaau-pahoa Rd 4 3.5 1,960 41,077 $775,000 $395 2020
Kurtistown Orchid Land Estates 16-354 Aulii St 1 1 576 87,120 $265,000 $460 2021
Kurtistown Orchid Land Estates 16-1580 39th Ave 2 1.5 1,020 130,680 $445,000 $436 2020
Kurtistown Orchid Land Estates 38th Ave 2 1 1,152 130,680 $349,000 $303 2022
Kurtistown Orchid Land Estates 16-294 Ainaloa Blvd 4 3 1,568 43,560 $599,000 $382 2022
Kurtistown Orchid Land Estates 16-1844 34th Ave 3 2 1,400 43,560 $499,900 $357 2022
Prepared by Keyser Marston Associates, Inc.
Filename: \\SF-FS2\wp\13\13996\001\Market Survey and Prototypes 12-9-23.xlsx;New SFD for Sale;3/25/2024;hgr Page 103
Appendix B-5
Newer Single Family Detached Units for Sale
Update to Chapter 11
County of Hawaii, HI
CITY LOCATION ADDRESS BEDS BATHS SQUARE FEET LOT SIZE ASKING PRICE $/SF YEAR BUILT
Mountain View Hawaii Island Paradise Acres Subdivision 18-1277 Kona St 3 2 2,560 16,728 $310,000 $121 2020
Mountain View Hawaiian Acres 16-1817 Io Kea Rd (road 4)0 1 384 130,680 $260,000 $677 2021
Mountain View Hawaiian Acres 16-1636 Uhini Ana Rd (road 1)2 1 960 81,370 $298,000 $310 2021Mountain View Hawaiian Acres 16-1047 Kea Rd 1 1.5 720 130,680 $378,800 $526 2021
Mountain View Hawaii's Eden Roc Estates 11-1849 Noio St 3 2 1,040 43,560 $399,000 $384 2022Mountain View Pacific Paradise Gardens Aka Olaa Scenic La18-7849 Ewalina Rd 3 3 1,234 7,700 $429,000 $348 2022
Hilo Kaumana Gardens Subdivision 341 Kaumana Dr 3 2.5 1,786 13,175 $739,000 $414 2022
Hilo Waiakea Homestead Houselots 2302 Nohona St 3 2 1,586 12,289 $799,000 $504 2022
Hilo Waiakea Homesteads 1st Series 19 Makalani St 3 2 1,680 15,300 $719,000 $428 2022
Hilo Waiakea House Lots 1st Series 740 Laukapu St 4 3 1,871 22,500 $839,000 $448 2022
Pahoa Ainaloa 16-2063 Pearl Dr 3 2 1,212 12,000 $439,900 $363 2021
Pahoa Ainaloa 16-2121 Uilani Dr 3 2 1,214 12,000 $349,000 $287 2022
Pahoa Ainaloa 16-2157 Emerald Dr 3 2 1,232 12,000 $445,000 $361 2021
Pahoa Ainaloa 16-2166 Uilani Dr 3 2 1,212 12,000 $420,000 $347 2019
Pahoa Ainaloa 16-2046 Coconut Dr 3 2 1,620 12,000 $429,900 $265 2022
Pahoa Ainaloa 16-2045 King Kamehameha Blvd 2 1 480 11,515 $271,000 $565 2019
Pahoa Ainaloa 16-2387 Ainaloa Dr 3 2.5 1,248 12,000 $379,000 $304 2022
Pahoa Ainaloa 16-2063 Puhala Dr 3 2 1,212 12,000 $399,000 $329 2021
Pahoa Ainaloa 16-2055 Silveroak Dr 3 2 1,244 12,000 $430,000 $346 2022
Pahoa Ainaloa 16-2072 Mauna Kea Dr 3 2 1,219 12,000 $399,000 $327 2022
Pahoa Ainaloa 16-2084 Pearl Dr 3 2 1,320 12,000 $425,000 $322 2022
Pahoa Ainaloa 16-2116 Paradise Dr 3 2 1,244 12,000 $410,000 $330 2022
Pahoa Ainaloa 16-2045 Lauhala Dr 3 2 1,242 12,000 $399,000 $321 2022
Pahoa Ainaloa 16-2146 Ohia Dr 3 2 1,056 12,071 $385,000 $365 2022
Pahoa Ainaloa 16-2033 Tree Fern Dr 3 2 1,158 9,000 $370,000 $320 2022
Pahoa Ainaloa 16-2070 Tree Fern Dr 3 2 1,219 12,000 $399,000 $327 2022PahoaAinaloa16-2098 Pikake Dr 3 2 1,160 12,000 $395,000 $341 2022
Pahoa Ainaloa 16-2036 Hilonani Dr 3 2 1,056 12,000 $325,000 $308 2019PahoaAinaloa16-2045 Pikake Dr 4 2.5 1,412 12,000 $399,000 $283 2022
Pahoa Ainaloa 16-2094 Silversword Dr 4 3 1,412 12,000 $399,000 $283 2022PahoaAinaloa16-2082 Sandalwood Dr 2 1 782 12,000 $329,900 $422 2022
Pahoa Ainaloa 16-2090 Pearl Dr 3 2 1,345 12,000 $450,000 $335 2022
Pahoa Ainaloa 16-2160 Aloha Dr 3 2 1,214 12,000 $379,000 $312 2022
Pahoa Ainaloa 16-2113 Ohia Dr 3 2 1,212 12,000 $389,000 $321 2022
Pahoa Ainaloa 16-2115 Ohia Dr 3 2 1,212 12,000 $389,000 $321 2022
Pahoa Ainaloa 16-2041 Tangerine Dr 3 2 1,152 12,000 $377,000 $327 2022
Pahoa Ainaloa 16-2105 Hibiscus Dr 3 2 1,196 12,000 $410,000 $343 2020
Volcano Aloha Estates Subdivision 18-1977 Road 8 2 1 864 12,005 $305,000 $353 2022
Volcano Fern Forest Vacation Estates 11-2094 Makoa Rd 4 1 928 130,680 $250,000 $269 2019
Volcano Glenwood Gardens Aka Orchid Isle Estates Road 9 1 1 320 12,005 $165,000 $516 2020
Volcano Mauna Loa Estates 11-3799 3rd St 3 2 1,256 20,000 $588,000 $468 2022
Volcano Olaa Summer Lots 19-5114 Nanea Pl 2 2 1,160 21,200 $850,000 $733 2021
Volcano Royal Hawaiian Estates 11-3302 Alaula St 1 1 356 10,000 $179,000 $503 2019
Volcano Royal Hawaiian Estates 11-3227 Mokuna St 3 2 1,104 10,000 $350,000 $317 2021
Volcano Royal Hawaiian Estates 11-3227-A Mokuna St 3 2.5 1,248 21,500 $375,000 $300 2021
Volcano Royal Hawaiian Estates 11-3199 Pa Alii St 3 2 1,104 10,000 $350,000 $317 2022
Volcano Royal Hawaiian Estates 11-3258 Pa Alii St 1 1 600 9,357 $213,000 $355 2020
Prepared by Keyser Marston Associates, Inc.
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Appendix B-6
Asking Rents for Apartments
Update to Chapter 11
County of Hawaii, HI
Sq. Ft.Monthly Rent $/SF Notes
WEST HAWAI'I \
Lofts at Waikoloa 68-1865 Pua Melia St, Waikoloa
1 BD / 1 BA 52 559 $2,344 $4.19 Built 2021
1 BD / 1 BA 1 559 $2,344 $4.19 108 Units
2 BD / 1 BA 52 793 $3,504 $4.42 3 stories
2 BD / 1 BA 3 602 $2,660 $4.42
108 673 $2,911 $4.31
Hale Kaloko 73-1311 Onaona Dr, Kailua Kona
Studio / 1 BA 60 400 $1,650 $4.13 Built in 1994, renovated in 2015
Studio / 1 BA 60 400 $1,500 $3.75 120 units, 3 stories
120 400 $1,575 $3.94 Unit mix unknown.
75-5749 Alahou St Kailua Kona
Studio / 1 BA 15 596 $1,600 $2.68 Building 1 - 2012. Building 2 - 2018
1 BD / 1 BA 8 Building 1 - 8 units. Building 2 - 17 units
2 BD / 1 BA 2 750 $2,095 $2.79 Studio rents from 2018.
25
81-6229 Hind Rd Captain Cook
2 BD / 2 BA 12 1,020 $1,650 $1.62 Built 2008
75-346 Hualalai Rd.Kailua Kona
2 BD / 2 BA 862 $2,500 $2.90 Built 2002
EAST HAWAI'I
189 Kukuau St Hilo
Studio / 1 BA 400 $700 $1.75 Built 2002
556 Alenaio Ln Hilo
2 BD / 1 BA $1,125 NA Built 2008
Rent listing from 2021.
Source: Costar, Apartments.com
Additional Listings in Hilo
3 BD / 1 BA 814 $1,623 $1.99
2 BD / 2 BA 830 $2,000 $2.41
4 BD / 2.5 BA 1,400 $2,500 $1.79
3 BD / 1.5 BA 1,055 $1,623 $1.54
Studio / 1 BA 470 $1,100 $2.34
Source: Zillow
Prepared by: Keyser Marston AssociatesFilename: \\SF-FS2\wp\13\13996\001\Market Survey and Prototypes 12-9-23.xlsx; AskingRents Page 105
Appendix B-7
Lot Sales Since 2020
Update to Chapter 11
County of Hawaii, HI
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
0 0.5 1 1.5 2 2.5 3Sale Price Parcel Size (acres)
Kohala Coast Resort Lot Sales
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
0 1 2 3 4 5 6 7Sale Price Parcel Size (acres)
Kailua Kona Lot Sales (Under $1M)
Prepared by Keyser Marston Associates, Inc.
Filename: \\SF-FS2\wp\13\13996\001\Market Survey and Prototypes 12-9-23.xlsx;lot charts;3/25/2024;hgr Page 106
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
0 1 2 3 4 5 6 7Sale Price Parcel Size (acres)
Waimea Lot Sales
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2Sale Price Parcel Size (acres)
Waikaloa Village Lot Sales
Prepared by Keyser Marston Associates, Inc.
Filename: \\SF-FS2\wp\13\13996\001\Market Survey and Prototypes 12-9-23.xlsx;lot charts;3/25/2024;hgr Page 107
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5Sale Price Parcel Size (acres)
Hilo Lot Sales
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5Sale Price Parcel Size (acres)
Hamakua Lot Sales
Prepared by Keyser Marston Associates, Inc.
Filename: \\SF-FS2\wp\13\13996\001\Market Survey and Prototypes 12-9-23.xlsx;lot charts;3/25/2024;hgr Page 108
Source: Redfin sales data for 2020 to 2022
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
0 0.5 1 1.5 2 2.5 3 3.5 4Sale Price Parcel Size (acres)
Puna Lot Sales
Prepared by Keyser Marston Associates, Inc.
Filename: \\SF-FS2\wp\13\13996\001\Market Survey and Prototypes 12-9-23.xlsx;lot charts;3/25/2024;hgr Page 109
Appendix B-8
Land Sales
Update to Chapter 11
County of Hawaii, HI
Property Address Property City Year sold Size (acres)Sale Price Price PSF gross Note
Large Acreaage
Waikoloa Rd Waikoloa 2021 2,153.4 $6,000,000 $0.06 Raw, unentitled
Palamanui property Kailua Kona 2022 720.0 $15,000,000 $0.48 Entitled for over 1,000 units, business park, hotel, retail
requires significant infrastructure
Waikaumalo O-Maulua Homesteads Papaaloa n/a 41.6 $625,000 $0.35
Kaalualu Rd & Poko St Naalehu n/a 198.6 $159,000 $0.02 short sale
77-6217 Mamalahoa Hwy Holualoa n/a 56.0 $815,000 $0.33
Under 20 Acres
245 Wainaku St Hilo n/a 4.4 $975,000 $5.12
1 Laaloa Ave Kailua Kona 2021 19.6 $1,200,000 $1.41 ocean view, residential zoning
74-4972 Kiwi St Kailua Kona 2021 7.1 $950,000 $3.05
44-2851 Kalaniai Rd Honokaa n/a 5.2 $315,000 $1.38 single ocean view lot
Kia Manu Rd Honokaa n/a 2.5 $192,000 $1.78 single lot
Oceanfront
75-6066-75-6076 Alii Dr Kailua Kona 2020 8.4 $4,167,240 $11.33 Three oceanfront lots on Alii drive
Queen Kaahumanu Hwy Kailua Kona 2019 21.9 $14,000,000 $14.69 Four ocean-front lots, no utilities to site.
Amaui Dr Kamuela 2020 6.0 $6,100,000 $23.34 Entitled Hapuna estates pad sale approved for 15 lots
Source: CoStar residential land sales since 2019
Prepared by Keyser Marston Associates, Inc.
Filename: Market Survey and Prototypes 12-9-23.xlsx;costar land sales;3/25/2024;hgr Page 110