Hawaii-2019-SB741-Introduced

SECTION 1. The legislature finds that the State of Hawaii has a housing crisis. The department of business, economic development, and tourism's report, Measuring Housing Demand in Hawaii 2015-2025 published on April 2015, forecast that the demand for additional housing units by county is 25,847 units for the city and county of Honolulu, 19,610 for Hawaii county, 13,949 for Maui county, and 5,287 for Kauai county during 2015 to 2025.

The city and county of Honolulu's draft of its affordable housing strategy states: "The marketplace is not building enough affordable housing to keep up with demand. Many people live in overcrowded homes, spend more than forty-five per cent of their incomes on combined housing and transportation costs, or are homeless and living on the streets. Oahu would need more than 24,000 additional housing units to address pent-up demand combined with new household formation by 2016. Over 18,000 or 75% of the total projected demand is for households earning less than 80% of area median income (AMI), or $76,650 for a family of four".

While the state's study shows the projected lack of supply of housing over the next ten years, none of the counties have formulated and proposed any possible solutions to increase the production of housing in Hawaii to meet the projected demand through reforming entitlement processes, as well as long-range planning for infrastructure investment.

Hawaii's comprehensive land use system and policies, coupled with an overlapping county entitlement process, are the dominant reasons why there is a severe housing shortage in the State. The aggregate land area for all islands is about four million acres with roughly half designated as agriculture and the other half allocated to conservation. According to the Urban and Rural Areas in the State of Hawaii, by County: 2010 report, about two hundred fifty thousand acres or five per cent of the islands' lands are designated as urban and available for development.

The purpose of this Act is to require boundary amendments reflected in certain plans to be adopted in accordance with the respective plans, upon approval by the county land use decision-making authority, with concurrence from the land use commission, and to increase housing inventory by prioritizing funding for public infrastructure and providing a streamlined approval process for the projects.

SECTION 2. Chapter 201H, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§201H-A Amendments to district boundaries; annual production report. (a) For boundary amendments authorized pursuant to section 205-4, each county shall provide, by April 1 of each year, an annual production report to the corporation that includes:

(1) The number of net new units of housing, including rental housing and for-sale housing, that have been issued a completed entitlement, building permit, or certificate of occupancy, in the housing element cycle;

(2) The income category, by area median income category, that each unit of housing satisfies, which includes rental housing and housing designated for home ownership;

(3) For each income category, the number of rental housing units and the number of for-sale housing units that satisfy each income category; and

(4) For each entitlement, building permit, or certificate of occupancy, a unique site identifier, which shall include a tax map key parcel number but may also include street address or other identifiers.

(b) In normal market conditions, if a county fails to meet its annual housing production goals for two consecutive years for any or all of the income categories pursuant to section 205‑4(d), that county shall be subject to the streamlined housing approval process established pursuant to section 201H-B for each income category that did not meet the production goal.

(c) In the event of abnormal market conditions that impact the production of housing, including but not limited to a lack of materials, high interest rates, economic recession, or the home buyer market, such as high mortgage interest rates or an economic recession, the State shall decide, after consultation with the respective county on which the housing project is located, if or when the county will be subject to the streamlined housing approval process established pursuant to section 201H-B.

§201H-B Streamlined housing approval process. (a) A development proponent may submit an application for a housing development that is subject to the streamlined, ministerial approval process provided by subsection (b) for units priced at income categories for which the county failed to meet production goals, and shall not be subject to a conditional use permit if the development satisfies all of the following:

(1) The development is a multifamily housing development that contains two or more residential units;

(2) The development is located on a site that is:

(A) A legal parcel or parcels; and

(B) Designated in the urban district by the land use commission and:

(i) Is zoned for residential use;

(ii) Is a residential mixed-use development;

(iii) Has a general plan designation that allows residential use; or

(iv) Allows a mix of residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential use;

(3) The development of a market rate housing project is subject to a requirement mandating a minimum percentage of below market rate housing based on one of the following:

(A) If the county has adopted a local ordinance that requires that greater than ten per cent of the units be dedicated to housing affordable to households making below eighty per cent of the area median income, that zoning ordinance applies; or

(B) If the county does not have an affordable housing requirement, ten per cent of the proposed units, on projects with greater than ten units, shall be priced for those households making eighty per cent or below the area median income;

(4) The county permitting agency may review the proposed project for compliance with codes and ordinances and for consistency with surrounding existing projects; provided that the county is prohibited from imposing any non-code related condition or exaction on projects processed pursuant to this section; and

(5) If the development involves more than ten units and is not a public works project, then all construction workers employed in the execution of the development shall be paid at least the general prevailing rate of per diem wages for the type of work and geographic area.

(b) If the county permitting agency determines that an application submitted by a development proponent pursuant to this section is in conflict with any of the objective planning standards as specified in subsection (a), it shall provide the development proponent written documentation of any standard the development is in conflict with and an explanation for any reason the development conflicts with that standard within ninety days of submittal of the application. If the county permitting agency fails to provide the required documentation pursuant to this subsection, the development shall be deemed to satisfy the objective planning standards specified in subsection (a)."

SECTION 3. Section 205-4, Hawaii Revised Statutes, is amended to read as follows:

"§205-4 Amendments to district boundaries involving land areas greater than fifteen acres. (a) Any department or agency of the State, any department or agency of the county in which the land is situated, or any person with a property interest in the land sought to be reclassified, may petition the land use commission for a change in the boundary of a district. This section applies to all petitions for changes in district boundaries of lands within conservation districts, lands designated or sought to be designated as important agricultural lands, and lands greater than fifteen acres in the agricultural, rural, and urban districts, except as provided in section 201H‑38. The land use commission shall adopt rules pursuant to chapter 91 to implement section 201H-38.

(b) Upon proper filing of a petition pursuant to subsection (a) the commission shall, within not less than sixty and not more than one hundred and eighty days, conduct a hearing on the appropriate island in accordance with the provisions of sections 91-9, 91-10, 91-11, 91-12, and 91-13, as applicable.

(c) Any other provision of law to the contrary notwithstanding, notice of the hearing together with a copy of the petition shall be served on the county planning commission and the county planning department of the county in which the land is located and all persons with a property interest in the land as recorded in the county's real property tax records. In addition, notice of the hearing shall be mailed to all persons who have made a timely written request for advance notice of boundary amendment proceedings, and public notice shall be given at least once in the county in which the land sought to be redistricted is situated as well as once statewide at least thirty days in advance of the hearing. The notice shall comply with section 91-9, shall indicate the time and place that maps showing the proposed district boundary may be inspected, and further shall inform all interested persons of their rights under subsection [~~(e).~~] (g).

(d) Notwithstanding any other law to the contrary, upon approval by the land use commission, and with the concurrence from the appropriate county land use decision-making authority by ordinance, boundary amendments reflected in the general plan, development plan, community plan, or sustainable community plan shall be adopted in accordance with the approved plans; provided that the quantitative annual production goals are agreed upon by the State for each of the following income categories:

(1) Market: one hundred forty per cent or more of the area median income;

(2) Workforce: eighty per cent to less than one hundred forty per cent of the area median income;

(3) Moderate Income: sixty per cent to less than eighty per cent of the area median income; and

(4) Low income: less than sixty per cent of the area median income.

No further action from the land use commission shall be necessary.

(e) Notwithstanding any other law to the contrary, all agencies responsible for providing public infrastructure to areas of planned growth requiring boundary amendments adopted pursuant to subsection (d) shall prepare a budget within one year of the effective date of the amendment that will prioritize funding for all infrastructure required to support the planned growth reflected in the adopted general plan, development plan, community plan, or sustainable community plan.

[~~(d)~~] (f) Any other provisions of law to the contrary notwithstanding, prior to hearing of a petition the commission and its staff may view and inspect any land which is the subject of the petition.

[~~(e)~~] (g) Any other provisions of law to the contrary notwithstanding, agencies and persons may intervene in the proceedings in accordance with this subsection.

(1) The petitioner, the office of planning, and the county planning department shall in every case appear as parties and make recommendations relative to the proposed boundary change;

(2) All departments and agencies of the State and of the county in which the land is situated shall be admitted as parties upon timely application for intervention;

(3) All persons who have some property interest in the land, who lawfully reside on the land, or who otherwise can demonstrate that they will be so directly and immediately affected by the proposed change that their interest in the proceeding is clearly distinguishable from that of the general public shall be admitted as parties upon timely application for intervention;

(4) All other persons may apply to the commission for leave to intervene as parties. Leave to intervene shall be freely granted; provided that the commission or its hearing officer, if one is appointed, may deny an application to intervene when in the commission's or hearing officer's sound discretion it appears that:

(A) The position of the applicant for intervention concerning the proposed change is substantially the same as the position of a party already admitted to the proceeding; and

(B) The admission of additional parties will render the proceedings inefficient and unmanageable.

A person whose application to intervene is denied may appeal the denial to the circuit court pursuant to section 91-14; and

(5) The commission, pursuant to chapter 91, shall adopt rules governing the intervention of agencies and persons under this subsection. The rules shall without limitation establish:

(A) The information to be set forth in any application for intervention;

(B) The limits within which applications shall be filed; and

[~~(f)~~] (h) Together with other witnesses that the commission may desire to hear at the hearing, it shall allow a representative of a citizen or a community group to testify who indicates a desire to express the view of such citizen or community group concerning the proposed boundary change.

[~~(g)~~] (i) Within a period of not more than three hundred sixty-five days after the proper filing of a petition, unless otherwise ordered by a court, or unless a time extension, which shall not exceed ninety days, is established by a two-thirds vote of the members of the commission, the commission, by filing findings of fact and conclusions of law, shall act to approve the petition, deny the petition, or to modify the petition by imposing conditions necessary to uphold the intent and spirit of this chapter or the policies and criteria established pursuant to section 205-17 or to assure substantial compliance with representations made by the petitioner in seeking a boundary change. The commission may provide by condition that absent substantial commencement of use of the land in accordance with such representations, the commission shall issue and serve upon the party bound by the condition an order to show cause why the property should not revert to its former land use classification or be changed to a more appropriate classification. Such conditions, if any, shall run with the land and be recorded in the bureau of conveyances.

[~~(h)~~] (j) No amendment of a land use district boundary shall be approved unless the commission finds upon the clear preponderance of the evidence that the proposed boundary is reasonable, not violative of section 205-2 and part III of this chapter, and consistent with the policies and criteria established pursuant to sections 205-16 and 205-17. Six affirmative votes of the commission shall be necessary for any boundary amendment under this section.

[~~(i)~~] (k) Parties to proceedings to amend land use district boundaries may obtain judicial review thereof in the manner set forth in section 91-14, provided that the court may also reverse or modify a finding of the commission if such finding appears to be contrary to the clear preponderance of the evidence.

[~~(j)~~] (l) At the hearing, all parties may enter into appropriate stipulations as to findings of fact, conclusions of law, and conditions of reclassification concerning the proposed boundary change. The commission may but shall not be required to approve such stipulations based on the evidence adduced."

SECTION 4. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	741
THIRTIETH LEGISLATURE, 2019
STATE OF HAWAII