Give and take needed on affordable-housing bill

Upon its anticipated passage in the next couple months, Council Bill 2774 will bring forward a much-needed update to our County’s Housing Policy, which has provided very little new workforce housing or affordable housing for those folks who make too much money to qualify for federally-subsidized housing but not enough to afford market-rate housing.

A work in progress since last summer and first appearing on the council’s agenda in January of this year, Bill 2774 is a package of 30 or so proposed amendments. Of these, two-thirds are non-substantive, including housekeeping or grammatical changes, as well as relocating language or removing duplicative language.

As the council’s Housing &Intergovernmental Relations Committee chair, I took on the responsibility of seeing that a bill would get drafted and introduced. Knowing that it would be the most-important bill that we’d work on this term, I asked Council Chair Arryl Kaneshiro to co-sponsor.

After a few planning discussions last fall between the two of us, the mayor and a few others from his administration, the bill was drafted by the County Housing Agency director. The bill was drafted based on those discussions, on goals and strategies from the 2018 Kaua‘i County General Plan and on the Workforce Housing Nexus and Financial Feasibility Analysis.

Although prior year’s efforts had resulted in the commissioning of that study, there had been no bills put before council for consideration. Because of that, instead of reinstating the housing task force from the prior council under the leadership of the then-Housing Committee chair, I decided to put our draft bill before the council for full consideration in our legislative process.

My thinking was that the public deliberation of the bill could happen simultaneously with us doing further outreach and getting input from stakeholders and the public.

Prior to the bill’s first reading in late January of this year, we sent a letter and draft of the bill to all the folks who served on the housing task force in the past, asking for their input, inviting their testimony and offering to meet.

To quickly recap the scheduling of the bill so far, we had first reading on Jan. 29, public hearing on Feb. 19, and committee meetings on Feb. 26, April 8, May 6 and July 8. All of these meetings were noticed and open to the public.

Because of the COVID-19 pandemic, testimony was received by email, telephone and over Microsoft Teams instead of in-person. Some of the larger gaps between the committee meetings were at the request of stakeholders who wanted more time to review the bill and meet with us.

My goal was always to work on the bill slowly in committee while continuing to do outreach so that we could garner support for the bill over time. We received testimony from several stakeholders. However, there are also many we haven’t yet heard from. We remain available to them.

As for testimony from individuals, last week we got a flood of over 100 emails, almost entirely against the bill. This was not unexpected because of the newspaper’s “Other Voices” opinion piece on Sunday, July 5, which expressed many inaccurate and misleading statements regarding the bill.

Most notably were claims that the bill would “exempt developers from the need to build affordable housing for an entire decade,” and that “every location on the island where a developer builds 10 residential units or more per acre none will need to be sold at affordable rates.”

These are the facts about some of the substantial proposed amendments:

1) The proposed design-districts exemption is limited to multi-family projects developed in Lihu‘e, Koloa and Kalaheo’s special planning areas, where there is a significant demand for housing;

2) The proposed special zoning exemption is limited to R-10-zoned lands, which are almost nearly all located in the greater Lihu‘e area.

Note: After my amendment passed last week, we now have a proposed price limit of 120% AMI (annual median income), which guarantees that 100% of projects that utilize these exemptions will be affordable. While we’re still cleaning up the language in this proposed amendment, I’m confident it will retain this affordable guarantee. I’ve asked the housing director to look at possibly renaming these “partial exemptions” to what they really are, which are “multi-family workforce housing special assessments;”

3) The term of affordability for housing developed under the policy is proposed to be increased from 20 years to 50 years;

4) The definition of “workforce housing” is narrowed to those making 120% AMI or less, rather than 140% AMI or less. For reference, a three-bedroom home at 140% AMI is $645,000. That pricing more or less has been what homes have been selling for in the market. We are lowering this because we don’t need to incentivize developers at that level or price. This will also net us more of our 30% assessed workforce units at the levels of 120% AMI, 100% AMI and 80% AMI;

5) An alternative proposal is in the works for resort developments that will allow them the following options when it comes to meeting their workforce housing assessment:

a) A 50% workforce housing assessment, or;

b) Conduct an independent analysis that may result in a workforce-housing assessment of less than 50% for consideration by the housing agency. However, the resulting workforce assessment shall not be lower than 35%.

This bill includes many proposed amendments. They are all intended to improve and update the housing policy to support the building of affordable homes and rentals that we so desperately need for our people.

To affordable-housing advocates, surely there are amendments in this bill you don’t support. But, I’m hopeful there are other amendments that you do support, like the one that increases the term of affordability from 20 years to 50 years, or the one that removes “140% AMI or less” from the “workforce housing” definition. Please be willing to give up a little for the greater good of our local families needing affordable housing.

Contractors, developers and Realtors, there may be amendments in this bill you don’t support, but I’m hopeful there are other amendments that you do support, like the one that provides a multi-family, workforce-housing special assessment for special zoning and design districts. Again, please be willing to give up a little for the greater good of our local families needing affordable housing.

This bill is neither a giveaway to developers nor a giving in to the housing advocates. It is a complex, careful and thoughtful attempt to incentivize the building of the hundreds and thousands of affordable units we need. It’s a bill that, following our General Plan and community plans, incentivizes that building activity in our town-core areas supporting the likes of rental-apartment complexes where units are priced below market value.

We’ve been working on Bill 2774 since late January, and I expect we’ll be working on it for a few months more. The bill we be heard again in committee on Wednesday, July 22, and probably every couple weeks until we complete our work. We invite you to engage with us and learn about the facts of the bill. And, we’d love to hear from you on ways to make the bill better. Please send your testimony to us at: counciltestimony@kauai.gov. Mahalo.

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KipuKai Kuali‘i is a member of the County Council and chair of the Housing &Intergovernmental Relations Committee.