When the Land Use Commission approved the redistricting of the property to be developed by Kona Vistas, the very first condition concerned affordable housing.<\/p>\n\n\n\n
Condition A required 10 percent of the housing built on the property be \u201coffered to residents of the state of low and moderate income.\u201d <\/p>\n\n\n\n
The Hawai\u02bbi County Council then included Condition J in its rezoning ordinance, requiring compliance with the affordable housing condition in the LUC order, as determined by the county Housing Agency.<\/p>\n\n\n\n
For the last 40 years, finding a path forward on affordable housing has proven to be difficult. Multiple agreements between the developer and the county have been signed, only to dissolve for one reason or another.<\/p>\n\n\n\n
The most recent was signed in January 2022. But just 11 months later, the county Office of Housing and Community Development (OHDC) asked that new conditions for affordable housing be imposed in any rezoning amendment.<\/p>\n\n\n\n
The first agreement lasted much longer, although it required numerous extensions. That agreement, signed in December 1992, called for the developer to purchase about 12 acres makai of the redistricted land, make drainage improvements and donate it to the county for development of affordable housing by a third party.<\/p>\n\n\n\n
Not until 2015 did the county receive title. Drainage improvements, however, still had not been made, prompting the county\u2019s then-housing administrator, Susan Akiyama, to demand performance in July of that year. At the same time, she informed the then-owner, Kona Vistas, that on the advice of the county corporation counsel, it would not be able to \u201cuse excess affordable housing credits to satisfy their obligation\u201d under the LUC\u2019s redistricting order. Should the developer have any questions, Akiyama advised it to call Alan Rudo of her office.<\/p>\n\n\n\n
Barely two months later, Akiyama completely reversed her position. The conveyance of title to the 12 acres to the county \u201cor our designated non-profit will fully satisfy Condition A\u201d of the LUC order and the county\u2019s affordable-housing condition as well, Akiyama wrote on October 7. Again, questions were to be directed to Rudo.<\/p>\n\n\n\n
The drainage improvements had still not been done a year later, when the county planning director advised the new landowner, Kona Three, LLC, that it was still on the hook for them. <\/p>\n\n\n\n
Richard Wheelock, one of the members of Kona Three, replied, noting that developing the drainage improvements was difficult. An environmental impact statement had been done in 1996, since county property would be affected by them. \u201cThen it was discovered that the drainage design to link into the county ditch at Kupuna Street would need to be routed through some land owned by two separate homeowners\u2026 [I]t took another six years to negotiate a deal between the county, the two property owners, and Kona Vistas LLC.\u201d<\/p>\n\n\n\n
But what seems to have killed the plan was a hydrological analysis that found the increased flows in the Holualoa Ditch brought about by the planned changes would result in the channel overtopping both Queen Ka\u02bbahumanu and Kuakini highways in heavy rains. \u201cTherefore,\u201d he wrote, \u201cthe plans for drainage improvements \u2026 will need to be altered.\u201d <\/p>\n\n\n\n
Also, Wheelock wrote, the 2015 transfer of title to the county was an error. It was only to be recorded after the county completed an environmental assessment for the transfer, Wheelock said, but, \u201cfor unknown reasons, escrow recorded this deed before the EA was complete.\u201d<\/p>\n\n\n\n
A meeting was held in the Planning Department on September 22, 2016, involving Wheelock, Daryn Arai, then a county planner, Alan Rudo of Housing, and Ron Kim of the Corporation Counsel\u2019s office. They agreed that Kona Three would work with the Corporation Counsel to reverse the conveyance of the property and work with Planning to update the SMA for the drainage improvements. In addition, Kona Three would work with Housing to arrange to convey the property to a third-party developer. <\/p>\n\n\n\n
In 2019, the OHCD again addressed the affordable housing issue. On October 31, then-administrator Neil Gyotoku informed Robert Williams of Kona Three that \u201cno affordable housing agreement exists\u201d between the county and Kona Three. \u201cA new agreement must be developed and signed by the owners and the county before the Kona Vistas project in Kailua-Kona may move forward.\u201d<\/p>\n\n\n\n
The previous agreement, involving the land transfer, signed in 1992 and amended seven times, \u201cultimately expired almost 13 years ago on December 31, 2006,\u201d Gyotoku wrote.<\/p>\n\n\n\n
While the county was willing to negotiate a new agreement, he continued, it \u201cno longer believes acquiring [the 12 acres] are in the best interest of the taxpayers \u2026 as it would free Kona Three LLC to pursue the development of hundreds of market-price homes without any guarantee the third party will be able to develop the affordable homes.\u201d<\/p>\n\n\n\n
\u201cKona Three LLC should reveal how it will satisfy requirements of 10 percent affordable for the development of the completed increment\u201d of 210 single-family homes, Gyotaku wrote, observing that the previous developer had not built any homes in satisfaction of the affordability requirement. In addition, \u201cthe county also believes that since there is no affordable housing agreement in place, any agreement with Kona Three LLC must comply with the current requirement of 20 percent affordable to meet the requirements of Chapter 11 of the County Code. Should Kona Three LLC build 465 new homes \u2026 93 of the units must be offered as affordable.\u201d The total number of affordable housing credits required stood therefore at 114.<\/p>\n\n\n\n
\u201cIn the spirit of moving forward, \u2026 the OHCD will agree to allow construction of 114 affordable units\u201d on the 12 acres, Gyotoku wrote. Alternately, he added, the developer could satisfy the agreement by purchasing excess affordable housing credits.<\/p>\n\n\n\n
With the election of Mayor Mitch Roth in 2020, Susan Kunz (formerly Susan Akiyama) returned to head the OHCD. She proceeded to work with Kona Three on devising a complicated plan to satisfy the affordable housing requirement by having the developer purchase about 10 acres mauka of the Kona Lowe\u2019s store. Kona Three would then convey the land to a third party developer that would build 100 affordable rental units on the site. Kona Three would obtain 67 credits in this deal that it would then surrender to the OHCD, thus satisfying Kunz\u2019s determination that Kona Three needed that number \u2013 and not the 114 Gyotoku had proposed \u2013 to comply with the county affordable housing law.<\/p>\n\n\n\n
Kunz signed off on the agreement in January 2022.<\/p>\n\n\n\n
Later that year, the scandal involving former housing employee Alan Rudo\u2019s abuse of the affordable housing credit system broke, with Rudo and three of his partners in the scam facing federal charges of fraud. County Council members expressed dismay on learning how the market in credits allowed developers to avoid having to build any affordable housing at all.<\/p>\n\n\n\n
Wheelock reported the fallout in his August 2023 report to the state Land Use Commission, noting that \u201c[O]ne of the Kona council members expressed dissatisfaction with the fulfillment of the Kona Vistas\/Royal Vistas affordable housing requirements by the use of affordable housing credits.\u201d<\/p>\n\n\n\n
That wasn\u2019t the only problem. \u201cThe Planning Department and the Office of the Corporation Counsel approached Kona Three with a legal position that the agreement couldn\u2019t be used to fulfill the affordable housing obligation,\u201d Wheelock wrote, adding that they maintain that the LUC condition requires the affordable lots or houses \u201cto be developed on the subject property.\u201d<\/p>\n\n\n\n
Omitted from Wheelock\u2019s report was any mention of a letter that housing administrator Kunz sent to the Planning Department on November 30, 2022, in response to a request for comments on the rezoning amendments.<\/p>\n\n\n\n
\u201cThe OHCD entered into an affordable housing agreement with the applicant on January 10, 2022,\u201d Kunz wrote. \u201cThe applicant desired to satisfy this requirement through the purchase of 67 excess housing credits\u2026 To date, the applicant has not satisfied the agreement.<\/p>\n\n\n\n
\u201cSince the applicant intends to amend Ordinance 02-131 \u2026 the OHCD kindly requests \u2026 that the condition be updated to reflect the current housing conditions \u2026 requiring the applicant to earn housing credits equal to 20 percent of the number of units or lots.\u201d<\/p>\n\n\n\n
\u2014 Patricia Tummons<\/strong><\/p>\n\n\n\n For Further Reading<\/em><\/p>\n\n\n\n Some of the principals of Kona Three \u2013 Roland, Jan, and Laurie Higashi and Robert Williams \u2013 have developed other properties subject to affordable housing agreements. For details, see the articles in the March 2023 edition of Environment Hawai\u02bbi,<\/em> especially \u201cAffordable Housing Gets Short Shrift as Developers Devise Work-Arounds<\/a>.\u201d<\/p>\n\n\n\n Our June 2023 edition includes an article on a development in Kea\u02bbau by a company led by Roland Higashi and Laurie Higashi. See \u201cKea\u02bbau Subdivision Gets Final Approval with No Affordable Housing Agreement<\/a>.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" When the Land Use Commission approved the redistricting of the property to be developed by Kona Vistas, the very first condition concerned affordable housing. Condition A required 10 percent of the housing built on the property be “offered to residents … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":15461,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[338,517],"tags":[7],"class_list":["post-15463","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-land-use","category-november-2023","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/15463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15463"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/15463\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/15461"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}