Housing panel makes first development decision

Jan. 3—An almost 6-month-old state panel created to accelerate affordable-housing production has acted on its first housing project application, though only to approve a relatively small fee waiver.

An almost 6-month-old state panel created to accelerate affordable-housing production has acted on its first housing project application, though only to approve a relatively small fee waiver.

The Build Beyond Barriers Working Group, established by Gov. Josh Green via a July emergency proclamation that has since been amended and extended several times, granted a school impact fee waiver to a developer converting a downtown Honolulu office midrise into 52 rental apartments.

The action taken during a Dec. 20 meeting represented the panel's first approval for a housing project since meetings began in August.

Under Green's emergency order, the 36-member panel was initially empowered to sidestep many state laws regulating housing development. But that prompted litigation from several organizations and individuals largely concerned with suspension of public notice requirements and environmental and cultural resource protections.

The governor in October amended his proclamation to resolve the litigation, and since then only one housing project application has been considered for action by the panel.

Robert Kurisu of 1060 Bishop Street LLC submitted that application Dec. 4 seeking the school impact fee waiver.

The company led by Kurisu has been working to convert most of the seven-­story office building at 1060 Bishop St. into 52 affordable rental apartments since early 2020 after dropping an initial plan to turn the building into a hotel.

Monthly rent including utilities is expected to roughly range from $1, 800 for studios to $2, 200 or $2, 300 for two-bedroom apartments, and conversion work is expected to be finished in time for tenants to move in by late April or May.

Units would be restricted to households earning 80 % of the annual median income on Oahu, which in 2023 equated to $73, 360 for a single person, $83, 840 for two people and $104, 800 for a family of four.

Kurisu told the working group that the conversion project has been proceeding under a city program to produce more affordable rental housing.

This program, established by Bill 7 in 2019, aimed to produce 500 affordable rental units per year by relaxing development standards and providing financial incentives that include a 10-year property tax exemption and no city application fees.

In November a city official said that only two projects, including one with 26 apartments, had been completed under the program but that 34 applications were under review and could result in nearly 1, 300 more affordable rental units.

Green's emergency proclamation on housing was drafted with a goal to stimulate quicker development of 50, 000 homes statewide.

According to a 2019 state analysis, there is a need for 50, 000 new homes in Hawaii by 2025, including about 36, 000 for households with low and moderate incomes.

Lindsay Apperson, a policy specialist with the Office of the Governor's Housing Team, told the working group at its Dec. 20 meeting that only 8, 000 of the 50, 000 homes are expected to be delivered by 2025.

"So this really highlights the extreme shortfall that we have for affordable housing in this state, " she said.

Apperson also said the team's analysis of affordable-housing projects, particularly those receiving public subsidies and exemptions since 2019, identified over 36, 000 housing units in the pipeline.

At 1060 Bishop St., former tenant Hawaii Pacific University vacated space it had been using for faculty offices, a library and its athletic department, according to Kurisu's presentation to the panel.

The building, which dates to 1954, also has 7-Eleven and UPS stores on the ground level.

A couple members of the working group, which had difficulty establishing a quorum for the recent meeting, expressed frustration over spending what ended up being nearly 30 minutes assessing the school fee waiver request instead of five or 10 minutes.

Sterling Higa, a panel member representing the nonprofit Housing Hawai 'i's Future, suggested that the fee be abolished this year by the Legislature.

Higa said such fees are passed on to homeowners or renters and don't generate much money to fund new school construction. He also said student populations in schools around downtown Honolulu are declining.

"There is no good reason to have this school impact fee, " he said during the meeting. "The schools in this area have shrinking student populations, so whatever impact fee would be paid by the residents of this building isn't actually going to help them get new schools in the area."

Kurisu said the state Department of Education supports the requested waiver. The DOE's impact fee for the area from Kalihi to Ala Moana is $3, 864 per unit. For the 1060 Bishop project, that would have amounted to $200, 928.

Only one person submitted public testimony on the application. Honolulu resident Seth Kamemoto in written testimony questioned the developer's need for the waiver given benefits received under Bill 7.

"Nothing in the justification shows a 'need' for this waiver, nor any additional affordable housing value that wouldn't already be realized without this waiver, " Kamemoto wrote. "Right now it just looks like more profit for the developer, at the cost of educational support for our children."