E-Newsletter: NEW!! City & County of Honolulu Affordable Housing Rules

E-Newsletter: NEW!! City & County of Honolulu Affordable Housing Rules

On March 19, 2019 Department of Planning and Permitting, City and County of Honolulu ("DPP") adopted Rules to Implement the City's Affordable Housing Requirements, effective March 31, 2019 (the "Rules").   A draft of the Rules was published by DPP in October 2018.  The purpose of the Rules is to implement the affordable housing requirements set forth in Ordinance 18-10.

What developments are subject to the Rules?

The Rules apply to projects that: 1) are subject to the requirements of Ordinance 18-10, which includes, among other projects: new construction of ten or more for-sale dwelling units developed as a single project, subdivision of land creating ten or more zoning lots for residential use, and conversions of existing buildings into multifamily dwellings containing ten or more for-sale dwelling units; or 2) contain as a condition by law, or approval issued by the City, the provision of affordable housing.

The Rules do not apply to projects for which an affordable housing requirement is imposed: 1) as a condition of a zone change, which projects continue to be subject to the Affordable Housing Rules for Unilateral  Agreements, as amended in 2010; or 2) by a state or federal agency imposed affordable housing requirement, except if DPP is required to confirm compliance with said affordable housing requirement.

What must I do to comply with the affordable housing requirement?  

Under the Rules, the developer of an affordable housing program is required to: a) prepare and submit to DPP, an affordable housing agreement, between the developer and the City, and an implementation plan for the delivery of affordable housing units, b) execute an affordable housing agreement with the city, c) record a restrictive covenant on the land on which the affordable housing agreement will be imposed, and d) on an annual basis, provide a written status report to the Director of DPP describing the developer's compliance with the affordable housing requirement.

What is required for an implementation plan?

The implementation plan is a document which describes how the project will satisfy the affordable housing requirements.  The implementation plan must include, among other things, the projected schedule of delivery for all market and affordable housing units in each phase of the project and the total number of affordable housing units provided to satisfy the affordable housing requirement.

What is required for an affordable housing agreement?

The affordable housing agreement must contain at least the following provisions:

  • The general purpose of the project;
  • The affordable housing requirement as described by Ordinance 18-10 or approvals issued by the City;
  • The maximum base sales price and/or rents of the affordable housing units as determined by the Rules;
  • A method for reducing the association and maintenance fees for the affordable units as stated in the Rules;
  • A detailed marketing strategy as described in the Rules, including estimated dates and advertising methods;
  • The estimated start date of marketing periods, if stated in Ordinance 18-10 or approvals issued by the City;
  • Details regarding eligibility, income verification, and submittal of forms and supporting documentation for affordable housing units as set forth in the Rules;
  • Annual reporting of project compliance;
  • Inspection requirements and procedures; and
  • Standard clauses that the City determines to be required, including but not limited to: indemnity, severability, termination, and assignability.

Did DPP release samples of the documents required by the Rules?       

No.  At this time DPP has not yet made available samples of the affordable housing agreement, nor has it made available samples of the following required exhibits to the affordable housing agreement: implementation plan, marketing and phasing schedule, marketing plan, application form, eligibility form, and income verification form.  These should be forthcoming.

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