Housing policy targets resort requirements

LIHU‘E — An amendment establishing a base-percentage of affordable housing units resort developers will need to offer than currently required in the county’s housing policy, which is currently being tweaked by the Kaua‘i County Council, was introduced yesterday.

Part of the amendment to Bill No. 2774 requires specific resort developments to provide at least 50% of the development in workforce housing or submit an independent analysis supporting less, yet still provide at least 35% of units in workforce housing.

This creates a 35% workforce housing floor, Housing Agency Director Adam Roversi said, which will eliminate “unfortunate abnormalities of the individualized assessment.”

One such includes Coco Palms in Wailua, which Roversi said was the only entity to go through the individualized assessment process with the current policy’s language.

While the Coco Palms project never got off the ground, the resort produced an independent assessment that said the project would not yield any affordable housing.

“The notion that 350+ room hotel would generate a need for zero workforce housing units just strikes me as absurd that could come out of an independent economic analysis,” Roversi said.

Vice Chair Ross Kagawa introduced the amendment with the recommendation of Roversi.

This amendment targets resort projects with more than 20 hotel rooms, 10 residential unit or estimated to generate more than 100 jobs, which the Workforce Housing Nexus and Financial Feasibility Analysis from 2019 says should address the need for workforce housing based upon the findings of an analysis specific to the resort project.

The 35% base-line is in-line with this report, which will not “necessarily burden the low-end projects,” Roversi said, like motels or smaller resorts.

Workforce housing is defined as units for those earning less than market rate but more than what would qualify for federal assistance.

The policy currently requires developers to have an individualized assessment to be approved by the Housing Agency and council before starting a project, a process that will remain.

Bill 2774 was first introduced in January by Housing and Intergovernmental Relations Committee Chair KipuKai Kuali‘i and Council Chair Arryl Kaneshiro, in conjunction with the Housing Agency.

The bill amends the Housing Policy, which has netted zero affordable housing units since its enactment over a decade ago, a goal of the policy.

Currently, in its second draft, the bill has amendments that add exemptions on multi-family projects developed in the town cores of Lihu‘e, Koloa and Kalaheo special-planning areas as well as outside of the parcels zoned R-10 and up, mostly in Lihu‘e and Puhi.

At a July 8 committee meeting, councilmember Luke Evslin proposed an amendment that would require units in these areas to be at or under 120% of the area median income (AMI), down from 140%, a recommendation from discussion with Roversi.

“In reality, more accurately than a partial exemption, it is a different assessment,” Kuali‘i said Wednesday. “No longer the 30% basement that applies across the policy, this is a special assessment for just these particular areas identified.”

Kagawa’s amendment reworded this partial exemption and moved it its own special assessment section.

“Developers will not develop if they are going to break even or take a loss,” Kagawa said. “And the county, due to COVID, we’re in no position to be developing a lot of lots that will satisfy the demands on Kaua‘i.”

Individual council members will meet with stakeholders and hold a workshop next council meeting. The bill was deferred to the first meeting in September.