Monday, July 26, 2010


IN THE DOG HOUSE: The race is apparently on as November approaches.

No not any of those races but the council’s desperate mad dash to cater to the smallest and largest whims of developers large and small.

On this week’s agenda are the illegal vacation rentals bill (#2364, Draft 1) set to give oxymoronic (or just plain moronic) mini-developers of ag land the right to build mini-resorts on their mini ag condo lots despite clear state laws that restrict the county from doing so and the farm workers housing bill (#2318, Draft 3) that could, despite 11 “safeguards”, give medium size developers a foot in the door to added density.

But bringing up the rear is an unbelievable gambit (Bill # 2361) by maxi-developer Alexander and Baldwin (A&B) to get out from under an agreement to build and maintain "permanently-affordable, workforce” housing for 90 years which led to the rezoning of their Kukui`ula development in Po`ipu.

It was designed to take the load off the housing market for the new employees of Kukui`ula, mostly for the “gap group” making between 140 and 180% of the median income.

But despite the fact that the condition of zoning was part of a package of “givebacks” that led to the controversial rezoning a few years back, the council is poised to change the term before the housing can be sold at market prices to 25 years because A&B is now sniveling that it’s “unfair” that in the interim the county passed an affordable housing guideline bill that calls for less.

That’s bad enough but what has received less attention than the reduced time element is that fact that under the current agreement Kukui`ula is fully responsible for the housing for the 90-year “life” of the project and in addition there’s a provision that if they can’t
sell the housing at affordable prices they would have to rent it out their qualifying workers or, if no qualified buyers were available, to other workers.

Now, not only is the time of affordability going to be 25 years but the whole responsibility for the housing- including coming up with the money for the buybacks if people want to sell- will rest with the county which will also make a few bucks on the secondary sales although not really enough to make a difference according to the county housing agency which for some absurd reason is supporting the changes.

One of the opponents of the original project, the rezoning and now the reduced housing giveback has been Dr. Jack Lundgren who testified at last week’s planning committee meeting- where the bill remains for now- and gave a rundown of the history of the project and the reasons for his opposition.

Here’s his testimony which lays out the history of the project and reasons why he opposes the changes:

RE: Bill 2361, relating to Kukui`ula 90 year affordable housing.

Please retain the 90 year affordable 75 unit housing agreement that was made when A&B and Kukui`ula Development were granted changes in density to their project in Po`ipu five years ago.

When A&B first was granted rezoning from Agricultural to Resort/Residential back in the ‘80s, (reference their attorney at the time, Walton Hong,) they proposed that approximately 3400 units would be constructed for sale. These were to be marketed to local residents, not wealthy mainlanders and retirees. True, the homes were not to be truly “Affordable”, but they were aimed at middle class locals, like, perhaps, a firefighter and office worker, or construction worker and teacher. This was to be “Gap Group” housing. The idea was that the former housing that these people vacated would become available to other residents who might not yet afford Kukui`ula. This would thereby relieve the housing crunch.

Then about five years ago, A&B partnered with luxury developers from Arizona and formed Kukui`ula Development. They proposed a much less dense project of approximately 1500 units. It sounded good. Nobody wanted beautiful Po`ipu turned into an over-crowded, traffic-choked nightmare. The disadvantage was that now the housing created would be mostly for the very wealthy. Many are to be fancy, view-oriented estate homes, costing in the millions of dollars.

To offset the impact of this massive project, and to provide an increment of affordable housing for workers and for other local residents, Kukui`ula development agreed to construct housing near Port Allen. This was to be housing in the $250,000 to $400,000 range, not cheap, but perhaps manageable.

To assure that this housing be kept in the “Affordable” category, the developers and the Council agreed to the 90 year buy-back clause. This would prevent speculation that would occur if the units were allowed to go to market.

The additional benefit was that this housing was going to minimize traffic by keeping commuting workers closer to the project than they might otherwise be if they had to drive in from Hanama`ulu or Kapa`a. The council worked out a formula as to income and worker priorities. Again, this was all agreed to by the developers.

Now, with a downturn in the real estate market, the developers want to renege on the deal, and allow the affordable housing to go to market after 20 years. That’s not a good idea. We would lose the pool of affordable housing, and be right back where we started. Yes, the market may be slow now, but these things go up and down. As the economy recovers, housing again will become scarce and expensive.

Do we remember what it was like after Iniki? There was plenty of empty housing for sale in a down market. The market recovered, and prices soared.

I admire A&B and their commitment to the Hawaiian community and its young people. I appreciate their underwriting of Hawaii Public Television. If Kukui`ula Development is facing an economic hiccup due to previous business decisions and a slowed economy, perhaps adjustments can be made to the affordable housing development timeline requirement. But please, do not throw out the agreement that would keep the housing affordable for ninety years. We need that to be retained for the continuing health of our community.

A&B’s ridiculous claim that the current economy and housing market should be considered for a 90- or even 25- year project is obvious specious considering that by the time they start the project and get to the actual sales the economy and housing market will most likely not resemble today’s climate as past experience has shown.

And of course if they really wanted to delay it for a couple of years they should be asking for that not trying to bamboozle the dullards on the council.

Yet somehow this developer friendly council that hasn't turned down a developer request during it’s year and a half reign seems poised to do it again.

Many times over the past decade the “current” council members have blamed past councils for the lack of foresight especially when it comes to affordable housing such as the councils of the ‘80’s who approved resorts willy-nilly with virtually no housing requirements or those of the mid to late 90’s who, during the post-Iniki down market decided that we didn’t need to create any future affordable housing after landlords complained about diminishing prices for their rental creating the worst housing crunch in island history in the early to mid ‘00’s.

Don’t expect any of the current crop of glad-handers to cross A&B in a season when A&B routinely crosses their pals’ palms with campaign silver... 40 pieces of it to be exact.

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