Our Kaka‘ako

On Tuesday, July 30, Tony Ching, the Hawaii Community Development Authority’s Executive Director, stood up in the State Capitol Auditorium and gave his Kaka‘ako Mauka Area Master Plan presentation. Again. The Authority, if nothing else, is consistent in its message and in the information it offers the public.

The politicians whose Senate, House or City Council districts include portions of Kaka‘ako or immediately adjacent areas sat on stage. These included Representatives Dela Belatti (Dist. 24), Tom Brower (Dist. 22) and Scott Saiki (Dist. 26), Senators Brickwood Galuteria (Dist. 12) and Suzanne Chun-Oakland (Dist. 13) and City Councilmembers Ann Kobayashi (Dist. 5) and Carol Fukunaga (Dist. 6).

Senators Les Ihara Jr. (Dist. 10), Will Espero (Dist. 19), David Ige (Dist. 16)—who chairs the Senate Ways and Means committee, Representative Aaron Johanson (Dist. 31)—the vice chair of the House Finance committee, and Councilmembers Breene Harimoto (Dist. 8) and Ron Menor (Dist. 9) were all in the audience.

Let’s go through the topics Ching covered one by one. This should establish a good context for this major development-designated area of Honolulu.

The big idea
The big goal of Kaka‘ako development is to create an “Urban Village” neighborhood. This is in accord with the 1982 goal of creating a neighborhood in which people live, work and spend recreational time. The term is present in the November 11, 2011 Mauka Area Plan, which calls for the creation of residential, commercial and industrial, mixed-use neighborhoods to facilitate the Urban Village idea.

Design principals that go along with this idea include creating an “active” street-front with trees and planters, a strengthened mauka-makai linkage, support for a small-lot, mixed-use industrial pattern in the center of Kaka‘ako, support for Transit-Oriented Development (TOD) and a focus on pedestrian and bike paths linking bus and rail stops.

Again, this idea has been fairly consistent since 1982, with the 2005 rules being based on the 1982 plan. The 2011 plan and rules expand the idea by including terms like “urban village” and the TOD plan, which could be adopted next year, is an overlay which does not change any of the prior rules, but simply adds additional development options for certain areas of Kaka‘ako.

Kaka‘ako projects
Projects currently under construction include: Halekauwila Place (which is nearing completion), Waihonua 1 at Kewalo, 1189 Waimanu Street (under construction) and 680 Ala Moana Blvd (which has been completed and leased out).

Permitted projects include 801 South Street (which is about to break ground), Symphony, 850 Kapiolani Blvd (currently in pre-sale), Waihonua 2 and 404 Ward Ave (Ward Village Land Block 5, Project 1, which was just permitted at the last meeting).

“Pipeline” projects are projects that are expected to be permitted. These include: 690 Pohukaina (Ching indicated that this developer was considering using the opt-in program under the proposed TOD rules for possible exemptions, such as to the height of the building), the 1127 & 1140 Ala Moana Blvd (Ward Village Land Block 2, Project 1) and 1108 Auahi St (Ward Village Land Block 3, Project 1). Other projects listed on the HCDA website under Proposed Projects include 604 Ala Moana, The Collection and Salt, though Ching gave no indication as to whether they were also considered in the pipeline.

Based solely off the above projects that have been approved at this point, HCDA is projecting an additional 4,200 housing units in the district.

Who will live in Kaka‘ako?
HCDA bases it’s Reserve Housing Program and Qualified Income Program on the U.S. Department of Housing and Urban Development (HUD) area median income (AMI) estimates from 2013. These programs are supposed to determine what can be considered “affordable” so it’s important to know where their data comes from. The rounded 2013 HUD estimated AMI for a family of four living in the area is $86,300. For a two-person household, the 2013 estimate is $66,160.

In Kaka‘ako there are several levels of housing being proposed.  At the top is market housing: this is the most profitable and preferable to developers as it includes a willing buyer and a willing seller who simply work out a deal fitting normal capitalist criteria. The cost is based on the market.

Next is workforce, or reserved housing. This means that the unit price is restricted to 100-140% of the HUD-estimated AMI. In dollars that’s $86,300-$120,820. After that comes affordable housing in which the unit price is restricted to 80-100% AMI. In dollars that’s $69,040-$86,300.

HCDA’s Reserved Housing Program is defined in the Hawaii Revised Statutes (HRS) under 206E-33, 8. The article states that an “increased supply of low and moderate income housing may be required as a condition of redevelopment and residential use.” Whenever any developer proposes a residential development on a lot that is 20,000 square feet or greater, this requirement is automatically triggered. The specific requirement is further defined in HCDA’s own rules: 20% of the total residential floor area in for-sale units must be reserved as such. For rental units, it’s 15%. Furthermore, that 20% of for-sale units must remain low and moderate for 5 years. The 15% of rental units must remain low and moderate for 15 years.

The Workforce Housing Program is defined under Subchapter 4 of the HRS 206E-33. Workforce developments must set aside 75% of residential units as for-sale units for families making the workforce 100-140% AMI. The Government doesn’t have to help developers cover costs incurred by that and the development must meet a certain unit-size requirement. The developments are exempt from buy-back, equity-sharing and public dedication fees. Ching stressed that no government money goes in to either HCDA-approved Reserved Housing developments or Workforce Housing developments.

At 60% or less of the AMI (making $51,780) the low-income label kicks in. Typically this would require subsidized-rental housing. “At these levels, the families don’t think about buying a place, they think about keeping a roof over their head,” said Ching.

Very low-income is recognized at 30% or less of the AMI ($25,890 or less) and opens Public Housing options. Further restrictions mandate that very low-income families should only have to spend a maximum of 33% of their gross income on housing costs. So the price of these public housing options can be no higher than a third of the 30% AMI family’s total income. Using that AMI, that maxes out annual rent costs for very low income families at $8,543.70, or roughly $712/month.

According to Ching, HCDA intends to allow for all of these levels of housing in Kaka‘ako and is hoping for a balance of rental and for-sale at a variety of income points. “Any time you provide housing at any particular income level, you create opportunities for others to fill in,” said Ching.

Using the rules to develop the urban village
In the 2005 rules, developers could request variances from the rules based solely off of “unnecessary hardship,” which seems to me to be a bit like “irreconcilable differences” in divorce lingo—who really knows what that means?

In the 2011 rules (and the TOD overlay would be consistent with this), they’ve actually made it much harder for developers to get variances. There are five criteria now: The variance must be unique, not self-created, has to be minimal in deviation, should not affect the character of the neighborhood and otherwise should have no adverse impact. On top of that, certain things cannot be asked for at all, such as a change of zoning, deletion of a roadway, park, open space plan or view corridor, change of land use classification, change of building type or frontage and change to the maximum floor-area ratio-standard.

The floor-area ratio (FAR) is a measure of density. In a 10,000 square-foot lot, using the Kaka‘ako-area mandated density multiplier of 3.5, that would allow for a 35,000 square-foot building.

That density multiplier is universal throughout Kaka‘ako, except for the Sherridan neighborhood, which is already completely built out, and central Kaka‘ako, which can only use the 3.5 multiplier if certain improvements are made on the part of the developers.

The 2011 rules allow for no modifications unless the development is for workforce housing, in which case the Authority may consider modifications to its Reserve Housing rules. “Our Variance Program allows for some flexibility, but we’ve toughened it up a bit,” said Ching.

This seems to be the benefit for developers deciding to create a workforce-qualified development, and shows that HCDA, while unable to tell land-owners exactly what to do in terms of providing housing at levels below market housing, is still trying to steer developers toward that goal of a mixed-use, mixed-income, urban village neighborhood.

Height limits are another tool HCDA has to get developers to develop along the lines of that goal. Currently, the 400-foot limit starts on a minimum lot size of 80,000 square feet. The TOD overlay proposes to allow 3 buildings in Kaka‘ako to be built up to 700 feet. The idea is to have a few “iconic” towers in the Kaka‘ako skyline the way the Empire State Building became iconic of the New York skyline. TOD would also allow for certain other parcels to range from 400-550 feet tall. But there are requirements for this as well. A developer wishing to use the TOD overlay to build to these heights would only be allowed to do so if they made a significant contribution to the community by way of a publicly beneficial development project.

Ching gave the example that he’s given at other meetings before: If a developer wanted to build a 700-foot iconic tower near the Blaisdell, they might be permitted to do so if they offered to rebuild and modernize the Blaisdell center for public benefit.

Infrastructure concerns
HCDA is required to conduct Environmental Impact Statements (EIS) to provide analysis of projected infrastructure needs in the area through 2030 at a planned population level of 30,000 people. The first was conducted in 2010, in preparation for the 2011 plan, and another EIS is being conducted now based off the proposed TOD rules. There are currently 12,000 people living in the district.

The EIS also gives HCDA an idea of what kind of infrastructure will be needed to support that 60% population increase.

Since 1976, HCDA has spent over $212 million in Kaka‘ako-area infrastructure improvements, including the Queen Street extension and renovations to Kamakehe, South, Cooke and portions of Pohokaina, Halekauwila and Hilalo.

Developers will also be required to pay their fair share. New water connections to a development, new traffic studies and mitigation around a development, waste-water facility improvements to support the development’s population and power connection costs would all be incurred by the developer, at least to a certain extent.

Schools are another big issue with preparing for a 30,000 district population. The state Department of Education (DOE) can establish a school district in Kaka‘ako and area developers would have to comply with fees for school district creation. According to Ching, the DOE is currently planning for that and developers already know they’ll have to help with the cost of creating a new school district.

The main thing the DOE needs to do is quantify what the projected school-age population will be. Currently in Kaka‘ako the average household size is only 1.8 persons per household, indicating a lack of families and school-aged population. However, the development of workforce housing units is projected to increase the school-aged population. HCDA, the developers and the DOE will be working together to figure out what Kaka‘ako will need in terms of a school district.

HCDA has more information on their website, including a Frequently Asked Questions page. Unfortunately, this just links you to the powerpoint presentation, which can be hard to process without analysis or explanation. HCDA also hosts community briefings twice monthly and Tony Ching is usually there to answer questions.