The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Honolulu City Council Committee on Planning and the Economy on Oct. 22, 2024.
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Oct. 22, 2024, 9 a.m.
Honolulu Hale
To: Honolulu City Council, Committee on Planning and the Economy
Esther Kiaʻāina, Chair
Radiant Cordero, Vice-Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: Bill 64 (2023) — RELATING TO USE REGULATIONS
Aloha Chair Kiaʻāina, Vice-Chair Cordero and members of the Committee,
The Grassroot Institute of Hawaii would like to comment on the portions of Bill 64 (2023), FD1 that would address “miscellaneous” permissible uses in the county’s land-use ordinance.
Specifically, the section of Bill 64 that deals with miscellaneous permissible uses discusses the creation of a “transfer of development rights” program to assist with historic preservation.
In this testimony, Grassroot will address the proposal that would allow innovative, incentive-based mechanisms to assist in historic preservation, as well as several other of the proposed amendments relating to this section.
>> Transfer of development rights
A transfer of development rights occurs when the owner of a parcel moves that right from one parcel to another. The right concerns the authority of a property owner to add a second dwelling, a business, a second story or some other density to an existing property.
Transfer-of-development-rights programs can create powerful incentives for the preservation of historic properties. A commercial building constructed 150 years ago is typically about only three or four stories tall, yet the zoning might permit as many as 10 stories, depending on the district.
Allowing the owner of the historic building to transfer the unused floor area permitted by the zoning from the historic property to another lot they own — or sell to the owner of another lot — could generate tens of thousands of dollars to help cover the cost of maintaining the historic building.
Bill 64 thus proposes to allow transfers of development rights for Honolulu properties listed on the Hawaii Register of Historic Places, the National Register of Historic Places or both.
An owner of any of these properties would be allowed to sell, give or otherwise transfer unused floor area from the “donor” historic property to a “receiving” property, so long as neither property is in the preservation or residential zoning districts.
A transfer under this proposal would need approval from the Honolulu Department of Planning and Permitting, which would have to be provided the plans for developing or redeveloping the receiving property, the plans to maintain the donor historic property, and the agreements that would bind the donor and receiving owners to to comply with those plans for a minimum of 60 years.
This is all good so far as it goes, but Grassroot suggests three amendments.
First, the draft should explicitly indicate that a receiving lot does not need to add additional parking spaces to accommodate the new floor area. Because land in urban Honolulu is so expensive, adding the costs of new parking to the transfer could make it financially infeasible to add the new floor area.
A comprehensive 2007 review of transfer of development rights programs in 10 cities found that stringent regulations on the transfer and use of development rights often meant that fewer transfers occurred, undermining program goals.[1]
Second, the Council should remove the following language from subsection (d) of the TDR section of the draft bill: “The transfer of floor area to the receiving lots will not cause the density of any of the receiving lots to exceed the maximum floor area ratio permitted under this section.”
This is currently listed as a condition for approval by the department, but this would undermine the flexibility of the program. Why would a receiving lot pay for development rights when it could add new floor area allowed by the zoning code for free?
According to that 2007 review, “If developers are allowed to build beyond baseline density limits using means other than TDRs … then they have little incentive to incur the costs of purchasing TDRs to get that extra density. This reduces TDR sales and the amount of land preserved through the program. We saw strong evidence of this problem in St. Mary’s County, Maryland.”[2]
Finally, Grassroot suggests increasing the maximum floor area that can be received. The current draft of the bill would cap the floor area that could be transferred at only 15% of the floor area normally permitted on the receiving lot. A higher cap would increase the monetary value of the transaction, assisting both the seller and the buyer.
>> Joint development
Regarding proposed changes to the county’s joint-development programs — where developers can build on two lots in the same zone as if they were the same lot — the current land-use ordinance allows two of them: one for adjacent lots and one for non-adjacent lots. Bill 64, however, proposes to delete both.
Instead, Grassroot supports an amendment being proposed by Councilmember Weyer that would leave in the joint-development programs for adjacent lots, since it gives builders flexibility whenever they happen to own two adjacent lots in the same zoning district.
>> Aquaculture
Regarding aquaculture, Grassroot supports Committee Chair Kiaʻāina’s amendment to allow aquaculture as a permitted use in industrial zoning districts.
>> Dedications for farmworker housing
Regarding farmworker housing, Grassroot has concerns about Councilmember Weyer’s amendment that would require all farmworker housing to be dedicated to farmworker housing for 50 years.
Farmers and ranchers might opt against building farmworker housing if it were subject to this requirement, which seems to assume there would be no changes in either the agriculture industry or the laws surrounding it over the next half-century.
If a dedication is to be imposed, Grassroot suggests a shorter time period, such as 10 years.
>> Home-based childcare
Home-based childcare is another miscellaneous permitted use that would be affected by Bill 64. In particular, Grassroot urged the Committee to adopt the two amendments offered by Councilmember Weyer that would allow a second non-household employee to assist with childcare if the principal caregiver is unavailable because of a sickness or other emergency.
The current draft of the bill allows only one non-household member to work in the home in addition to the household childcare provider.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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[1] Margaret Walls, Virginia McConnell, “Transfer of Development Rights in U.S. Communities,” Resources for the Future, 2007. pp. 124-125.
[2] Ibid, p. 124.
