More perspective on several Kaua‘i projects

In response to Debunking the House Bill Myths By Laurie Quarton — while the author of the Aug. 4, 2020, TGI article ‘Debunking the House Bill Myths’, has identified several projects on Kaua‘i that were constructed over the past few years, the author seems to be misinformed as to how these projects actually came about. While these projects were physically developed after the current housing ordinance (Ord. 860 effective as of December 10, 2007 without the mayor’s signature became Chapter 7A) these projects had nothing to do with meeting requirements imposed by this ordinance.

• Koa’e Makana – the project came about as a part of the conditions for approval of the development of Kukuiula, had nothing to do with Ord. 860. The project was essentially developed by the County with free land from A&B. Not an Ord. 860 project.

• Kaniko’o Phase I & II – the land was purchased by the County and the project was developed by a developer of affordable housing projects including outside funding sources. Developed because taxpayers (we the people) paid for the land and it is not an Ord. 860 project.

• Pa‘anau Village Phase 2 – also came from Kukuiula…. free A&B land.

• Waimea Huakai Phase 1 (Field 14) – This is a partnership with Kauai Habitat for Humanity, the Ahe Group and the County of Kauai. This is not an Ord. 860 project.

• Courtyards At Waipouli – Prior to Ord. 860, this project was required by the County as a zoning condition in exchange for approving 750 luxury condos next to the Kaua’i Marriott. The developer was required to build 82 affordable rental units having a 10-year expiration on the affordability requirement. This was required for Kauai Lagoons development approval before Ord. 860.

• Kalepa Village – The KHDC is among the partners in the Kalepa Village expansion, a U.S. Department of Housing and Urban Development project on County land (again, we the poeple). This property has received funding in part through the Low Income Housing Tax Credit (LIHTC) program, a certain number of units are set aside for lower income households. Not an Ord. 860 project.

• Kolopua (Princeville) – This project was required as a condition of approval for Princeville Development and the Princeville Shopping Center back in the 1980s. The Princeville Shopping Center has additional land for future expansion but there could be no expansion of the shopping center until the condition was met to provide this affordable or workforce housing project. The developer was basically given free land the new urgent care project came from this as well… certainly not a project that came from Ord. 860.

• Kamamalu – Has only 8 units and is not a project that falls under Ord. 860 because it has fewer than 10 units.

The author uses these projects in an effort to connect the dots to an end conclusion that Ordinance 860 has produced 451 affordable housing units when in fact this conclusion is abundantly false.

It has been nearly 13 years that Ordinance 860 (or Chapter 7A) has been in place and it is a documented fact that it has directly resulted in ZERO new housing units on Kaua‘i. The truth is, Ordinance 860 has resulted in precisely the opposite outcome as what was intended or stated by the authors of the ordinance.

It does not “encourage that a range and variety of workforce housing types and occupancy are made available” and fails copiously “to preserve the affordability of workforce housing for the future”.

While these are honorable ideals, the ordinance is written in such a way as to financially penalize a would-be developer rather than to incentivize a would-be developer to produce housing in a certain price range and effectively results in a near moratorium on new housing development of any significant scale.

Based on my analysis of several proposed projects on Kaua‘i over the past economic cycle, Ordinance 860 essentially takes the potential profit away from a project by forcing the sale or rental of units at a price point that is less than the cost to build. In other words, the project is not financially feasible and does not get built. Ordinances like 860 and other restrictive land use policies are a direct factor in the lack of housing on Kaua‘i and specifically at the lower end of the housing market.

Older homes at the lower end of the market have been increasing in value over the past several years at a significant pace primarily due to lack of supply and strong demand. While Bill 2774 attempts to provide relief from Ordinance 860 outside the VDA, Bill 2774 only further proves that Ord. 860 was ill conceived in the first place.

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Curtis J. Bedwell, MAI is a real estate appraiser with Kaua‘i Valuation, LLC having specific experience and expertise in land valuation, land use planning, residential and commercial development, and is a resident of Po‘ipu.

3 Comments
  1. RSW August 11, 2020 7:07 am Reply

    ” Ordinances like 860 and other restrictive land use policies are a direct factor in the lack of housing on Kaua‘i and specifically at the lower end of the housing market.”
    Curtis:
    You are absolutely correct. The poor supply of residential units of any category will never improve as long as the government continues to meddle with and interfere in land-use & housing issues. Governments at all levels need to get out of the way and let the market work. Unfortunately, county and state politicians/bureaucrats are sadly ignorant of just how markets can solve problems of supply and the subsequent affect on prices of increased supply.
    RSW


  2. james August 11, 2020 7:26 am Reply

    All I can say is “nice job passing Ordinance 860”, whomever was responsible. Whether or not the intended effect was to limit rampant building and, thus, further tax our overcrowded roads and infrastructure, that goal was apparently the one that was actually accomplished. We need to solve the traffic and infrastructure issues before building more housing developments, low income or not.


  3. Wa Hine August 11, 2020 12:01 pm Reply

    I think Kamamalu had 30 units…..? It too was part of the Kauai Lagoons requirements for development as far as I can remember (not part of 860)


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