Senate Standing Committee on Housing

Good afternoon. We will begin today with the 1:00 O'clock hearing of the Committee on Housing and the Committee on Energy and Intergovernmental Affairs. We have a later Housing Committee agenda jointly with the Committee on Water, Land, Culture, and the Arts. This meeting is being streamed live on YouTube.

In the unlikely event that we have to end this hearing due to technical difficulties, the committee will reconvene to discuss any outstanding business at 1PM on Thursday, April 2 in this room, 225, and a public notice will be posted on the legislature's website.

We have a one minute per testifier time limit. If there are temporary technical glitches during your time to testify via Zoom, we may have to move on to the next person due to time constraints. We appreciate your understanding and remind you that the committee has your written testimony. Our first, measure on the joint agenda with EIG is SCR 48 and SR 47 declaring the intent that affordable housing credits are perpetual and remain valid until redeemed and requesting the counties to recognize those credits without expiration dates.

Our first testifier is DHHL in support, followed by OPSD in support.

OPSD stands on certain test cases

for the field of questions.

Thank you.

Thank you. And, NIAF Hawaii chapter in support.

Aloha, chairs, members of the committee. Evan Oue on behalf of NIAF Hawaii. You have a written testimony. We do stand in strong support, and I and, you know, I just appreciate the legislature clarifying the intent for these affordable housing credits to be perpetual until redeemed. I think it really, helps, you know, solidify the intent of what this tool was meant to be from a financing for housing, perspective.

So we appreciate the legislature's hard work on this and available for any questions. Thank you.

Thank you. Anyone else wishing to testify in SCR 48 and, SR 47? Okay. If not, I'll hand it over to the IG chair.

Okay. We're gonna move on to the last two pair of resolutions, SCR 107 and SR 101. And on our testifiers list, We have Grassroots Hawaii Institute. That's all I have for those indicating a desire to testify. Is there anyone else wishing to testify on these two resolutions. 107 and SR 101? If not, members, there's no one to ask questions of and-

Oh, yeah. Can we Wrong place. Found it. Found it.

Can we move into decision making? Okay.

Sure. So chairs having conferred, we'll go straight into decision making. Starting with SCR 48 and SR 47, chair's recommendation will be to pass this measure unamended. Any discussion or questions, members? If not, again for SCR 48 and SR 47, chair's recommendation is to pass unamended, chair votes aye.

Members, SCR 48, passed unamended, chair votes aye. I vote aye. Senator Elefante. Aye. Senator Rhoads.

Aye. Senator Fevella is excused. Chair recommendation's adopted. Thank you.

Board members of EIG, same recommendation. Any discussion? If not, Senator Chang, when you're ready, I vote yes.

Okay. Chair's recommendation for SCR 48 and SR 47 is to pass unamended. Chair votes yes. Vice chair votes aye. Senator DeCoite is excused.

Senator

Okay. Oh, I. I mean, yeah. Sorry. I.

Your recognition is adopted.

Okay. Members, we're gonna move on to the last pair of measures on this agenda, SCR one zero seven and SR one zero one. The chairs have conferred. We wanna make two amendments to this, making clear that this resolution only applies to the city and county of Honolulu, and that it will be done in collaboration with the Department of Housing and Land Management as well as the Department of Planning and Permitting.

So those two entities will collaborate in getting the value that this resolution makes has set as a call.

Any discussion? If not, Senator Chang, I vote yes.

Chair's recommendation for SCR 107 and SR 101 is to pass with amendments of the members present. Are there any objections or reservations? There none of the recommendation is adopted. Thank you. And for the committee on housing, same recommendation to pass with amendments for SCR 107 and SR 101 chair votes aye.

Members noting the presence of all members. Any members waiting with reservations or needs? Without others waiting, any recommendations adopted.

Thank you. There being no further business, the joint hearing with the Committee on Energy and Intergovernmental Affairs is adjourned.

Good afternoon. We're convening joint committees on water, land, culture, and the arts, and housing on our 01:05PM agenda here in state capital conference from two two five.

We have up today SCR 68 and SR 63, which we'll take testimony on together, which urges the DLNR and, excuse me, urges DLNR to transfer processes that make up the East Kapolei transit oriented development project to the Hawaii Housing Finance and Development Corporation urging the HHFDC to partner with HCDA to facilitate the development of non housing community development portions of the project. Testifying first on these measures is DLNR.

Senator, with his testimony with comments.

Thank you. Up next is HHFDC. Thank you. And HCDA. K.

We also have testimony or signed up to testify DHHL. And if not, that is everyone who had signed up to testify. Is there anyone else wishing to testify on these resolutions this afternoon? Hearing none, are there questions? Anyone from DLNR?

Yes.

Hi. Thank you for being here. I I read through your your testimony on this, but I was just curious. You currently are now at an RFP. So what is the RFP going out for specifically, If you're able to discuss that.

I don't think that's our

Is that standard DLNR?

Right. I am. I just transitioned to Oh, you did. Okay. Yes.

Thank you. Position for the locker.

Oh, Seijo Gawa, administrator for DLNR.

I'm sorry. EIS.

Oh, EIS. EIS. Sorry. Right. So we're in the tail end of it.

We're just awaiting a market study. And once that's done, the consultant gets it back to write up the final portion of the EIS, and it should be ready to publish by end of this summer.

Okay. Thank you, CJ. Thank you, chairs.

Further questions? Real quick. Just in your testimony, you note the distinction between the housing portions of the parcels in question versus the non housing Right. Portions. But in your testimony, I think DLNR speaks to the revenue it gets off of some of those lands or the potential for revenue to get off of some of those lands.

The other two agencies, HFDC and HCDA note, at least in one of their testimonies, that the intent is to continue the funding that would otherwise be generated off of those lands to DLNR. Is that your understanding?

Correct. Lauren Yasaka, acting assistant administrator for the land division. Our understanding is that we would do something very similar to what was proposed for the Kaho Kainah site where there were HHFDC would retain enough funds and so would HCA to cover their administration costs, and the rest of the revenue would be towards the SLDF.

K. And that's- that'll be, like, written out in some

We would hope.

Formal agreement.

Yeah. So our hope is, right, if you allow us to do what we've proposed in our comments for you folks on this result is that we would take things parcel by parcel, which would allow us to go before the board with an MOA or MOU in hand to basically solidify that cost share agreement.

Okay. Thank you. So

I've been I've been concerned that a lot of the East Kapolei parcels are being used for non housing development. Is that changing anytime soon?

I'm okay. So I know you've been following this project for a while. So the housing I there has been some changes that I don't think that you were aware of. The TOD parcel, which is the parcel closest to the station, we have developed the front half to be a mixed use development, so housing and commercial component, which is typical of TOD.

The Mauka half of that parcel, so behind the actual rail line area, has actually been land banked for future housing development if the market proves that it's ready for it.

Across the street of Farrington Highway, more Mauka, half of that is affordable housing, and the other half is slated to be a part of a larger business industrial park, which I know you're not a fan of, but that would be our revenue generating portion more so than anything.

So what what changed?

What changed? Yeah. Oh, that we land back that other half of the two d parcel for more housing.

Okay. So that's industrial. How far is that industrial park from the train station?

So if this I don't have a model. It is Kitty Corner. So across from Tokai University.

On the West?

On the West?

On the West? On the West. So Qualakai Parkway, Barrington Highway. Industrial would be here. Station is down here.

And about how far?

So Where

is this? One mile. I think it's, like, three

Is it the right site, Kirycona? Yeah. Crossroads University? Yeah. Right?

But that's actually Deerport Inn, and they're right next to that. Yeah. You are. Yeah. Yeah.

Yeah. You're right. I think it's outside of it says more than a mile away. Because when you draw that radius around the thing, yeah, it's actually right outside.

More than half a mile.

Yeah. More than half a

mile. Yeah.

Yeah. But the the TOD site where the station is, that is supposed to be a typical way you would hope to see in a Tilly, which is the housing and a retail component because, right, it's a walkable community. But that would be on, like, the bottom levels where the majority on top would sit would be the housing component.

I I don't I I don't remember clearly, but the last I checked that those parcels for the industrial park were actually not that far away from the rail station, but they would be within walking distance.

I mean, you could

walk it. You could walk it, but it's still outside of that TOD, you know, half mile radius.

Yeah.

Yeah. Maybe we can note that, you know, that I I would it would be my preference that we would prioritize housing for all of these parcels. And, again, I- I- I still you know, there aren't that many parcels that and you you you folks own a lot of land, and not that much of that land is near the rail station. So I don't know why this land would be so highly prioritized for industrial development like warehouses.

This one was okay. So the ones that are actually TOD are the ones that include the station and the one we kinda requested that the other two be brought in so that we could do density on the Mauka side of Farrington Highway, but, technically, they weren't originally in the TOD zone. We actually asked for them to be incorporated within there just so that our development was within one zoning kind of requirement. I understand that you do want housing on all the parcels.

I mean, we've had this conversation over the years, and I think we still stand by, you know, the market study says what it does and we're following what the market study says.

Ho'opili is right next door. There is lots of housing in the area, so we need to make sure that we work with HHFDC. They're the leaders in housing, not us. And to ensure that whatever housing gets put out there pencils out for everybody involved. Yeah.

Like, you wanna make sure you have enough people to fill that housing. You don't want empty units.

I think it's the first hearing in my entire career that the state has fears that there will be way too much housing.

You have to remember, though, that what this is rental housing, right? This is not people can buy homes. You're renting them. They're not 99 leases. They're not their rentals because the state cannot sell land, so we cannot sell the units.

Why can't they be 99 year leasehold units?

We don't have that permission. The only thing that I am aware of right now is the 9- there's the 99 year pilot project that each city is currently in the process of, I believe, developing. That was the pilot project that would indicate whether or not that was something that people had an appetite for.

But HHFDC has that power.

You have the power. Then if that's what they choose to do, then so be it. That's that's up to the I'm not dictating them.

I'm not gonna continue this line of questioning any further, but it's this this sort of knee jerk anti housing posture at the department that I that I completely disagree. Senator Fevella.

Yes, honey. Oh, I'm sorry. I'm sorry.

You can go ahead.

Okay. I- I understand exactly what you're saying here, but I I live in the area. We're not gonna have a problem filling up houses. Okay. I understand you guys are doing one study, but right now, whole Peely sold a lot of their property for industrial to Costcos.

Yeah. Almost 50 or 11, 21 acres or 51 acres, sorry, to Costco. They're gonna be making cold storages, industrial, all of those things.

So I I kinda agree with Senator Chang If that could have all of this industrial already being prepared and best use for state land to help with the housing crisis, I think that should be prioritized because everybody else is gonna be building these things, and then we're gonna build industrial and you're saying that because whole Peely being whole homes, we're not gonna be able to fill these homes. Right now, there's a waiting list for every single home in our area, and it's not even built yet.

So So if we're gonna have affordable rentals, which right now give online for Airplace Point Elementary, Renton Road, you name them. People are waiting. We're housing across my street where on Renton Road that's being built. It's already filled, and they haven't even finished construction yet. So their rental is a hunger for that.

So I think that would be an ideal for that. Maybe we cannot sell it. But for ideal for renting, because not everybody can buy, especially in that area where the colleges stay, the stores, the the can be the new development, a walking distance to the rail. It would be ideal for rental units to be in that area.

Yeah.

And the industrial area should be the industrial area that 51 acres that Costco's will get to buy to to build out their cold storage and the industrial area. So that, to me, I think that we should really consider because I think we're gonna be we wanna make sure and I- I and I say we. It's all of us, but my community wants to be assured. And I I know they don't like any more billing because traffic.

We wanna make sure that we work, play, and that was the whole logo thing for whole billing.

Yep. Work, play, and shop whatever the whole trip was. How we gonna do that if we don't have enough housing Yeah. In the area, and we will continue to build industrial? We get the areas that is already designated futuristic wise and by the new high school of Ewa Beach and all that.

We already have these designated areas for these things. What I guess Senator Chang is saying and also I saying is that why would state land we wanna prioritize industrial because we wanna, you know, generate a revenue source when if we peel rental units and and get different type of rental units, that would be also a generating way of making income. So that that's just my view.

I mean, I I don't think we should use state land to build any more industrial because we're gonna have a big industrial then. We're gonna have to compete against Costco and all the rest of the guys, Aloon Farms, who building their cold storage going forward.

Then we gotta compete against them for industrial facilities. So I think the housing would be a better fit. So I don't know how we can go about changing that mindset on the industrial part to be housing. If there's something that we gotta do, it would be good to get you guys guidance because we'd rather have housing than another industrial area.

Okay. Can I just clarify? And I'm not Sorry.

I'm sorry. I'm going super we're open. I just wanna be clear. We are open to other options as long as at the end of the day, everything Kinda pencils out and works. I mean, we're not gonna say no to any options on the table.

Sorry. I'm sorry.

What I do wanna clarify, though, is that the thought behind the industrial and business park is not heavy industrial like the Costco and the big warehouses. We're looking at smaller warehouses for that actually support smaller businesses. They use them as, like, you know, like the surfboard shaping stores. Like, they use those types of facilities. So it was meant to be complimentary to the neighborhood and providing an area for businesses to work with where they live.

And in addition, there was, you know, this the office part was supposed to be complimentary to West Oahu so that, you know, if people wanted to somehow do, like, work hubs or that type of thing, they would have to just go across the street, and there would be this facility there for them to use. So it was a little bit more thoughtful than I think you guys think we were about it.

Chair, I have a follow-up. So to that then, have you done any outreach to see what the appetite was in that area? Because there are work live spaces in Hoopili already. There are. So why would they need another similar place?

These were bigger. They were more, like, for the students. So as they progress and as they get, you know, internships or they wanted to do, you know, entrepreneurship out of the university, it was gonna support some of those kind of small business entrepreneurship types of activities.

So they reached out to you and they said they wanted that.

I think we've we've we've been a part of the TOD council since its inception. We have had these conversations in which is a member. We have had numerous conversations with all agencies regarding our plan. We have not had anyone say no, or this is a really bad idea, or can you please look at something else?

But did they say that they wanted it, though? Even if they it was your idea, did they say that they wanted it anyways? Did you ask them? Like, you know, it's like, what would you want on this parcel?

Well, we didn't ask you each what they wanted. They do have a lot of land themselves that they have.

Well, I meant, like, the community. So you didn't

really We've we've gone out. I mean, whether or not they show up to the means, we have had public meetings.

I understand that, but you asked them what they wanted versus proposing an idea and then asking if this is something they're okay with?

I mean, we could have we could have done things differently. We could have done it more as a sure. Right? You are correct. That is not what happened.

But you're so follow sorry. Oh, go ahead. Go ahead. Go ahead. No.

The reason why I follow-up, but don't don't get scared when I say Costco. Because Costco not gonna bill just for them. When I'm talking about the areas and what you is talking about, they're gonna build cold storages for rental, and they're also gonna have warehouses. They get 51 acres. They're not gonna build Costco 51 acres.

They're gonna make it sure that it's providing on a light industrial that we're supposed to have in Ewa by Renton Road that got scrapped for the for the new expansion of the treatment plant. Those are the areas that's gonna have exactly what you're seeing, gonna have little areas where people can be able to do their business and stuff. So it's gonna be a mixed use, not just cold storage, not just all Costcos. I seen their master plan.

You guys gotta go ask them to send you guys their master plan and the idea, because that is what that area will be designed for for an industrial use.

So and and then when you talk about the University of Hawaii coming across the street and be able to use this, well, we gotta worry about the University of Hawaii right now is bringing students

To the campus. Right now, we don't even have students there. So how can we anticipate that they're gonna use this workstation across the street if we don't even have enough students? So those are the things that we gotta pencil into because right now, I can tell you right now, we we need rentals. We need more rentals and affordable rentals.

Yeah.

But again, do we need this possibility we're gonna have enough students or people within the area to utilize the the idea that you guys had proposed that that might be a fit for that community? So I same thing I was saying to Senator La Masa. You guys did you guys have any breakout sessions? Did you guys did you guys reach out to any of the legislators or anybody in the area to have a town hall meeting so you guys can put on people on the ground?

This is what we like, what we like, and they go over there and they put one dot on them, one red dot, purple dot.

You know, those idea, then you gather that and then you guys go back to the drawing board and figure out that's how we did whole Pele. I was part of the whole Pele task force, and everybody would like the misuse team.

So again, I mean, I'm not just telling you guys how to do it, but if you guys gonna present them to a community that right now is hurting for rental units, not so much sales because nobody can afford to buy, that would be the ideal kind of conversation breakout search session you guys should have.

So what I can suggest that we do based on all these comments is I think we should finish let's finish up this is a suggestion. Let's finish up the EIS. Right? Let's let's at least do that. Let's get that done and squared away because that will allow us to at least move on the TOD parcel, which is next to the station, which is the housing heavy parcel with the mixed use development.

Because it is an EIS, we can do supplemental EISs, so we can always adjust. It doesn't have to be set the EIS does not set anything in stone. Yeah. We can always revisit as we go through the different sections. Right?

But so what I would ask is, you know, let us let us do as you're asking, but let us do them in pieces. Let's take away this idea of, like, we have to do this all one time. We'll focus we'll do it on phases, and we'll relook at whether or not we have to do the EIS again or revise or do a supplemental, we will.

And at least at that time, if we're ready to move, the market studies and everything will be reflective of what it is. And that will better at least help us inform you that this is how we're making our decisions along with HCD, along with HHFDC, that this is a partnership, that this is we're involving everyone that needs to be at the table, including you folks, that this is how we're gonna get to the next step.

But I think it's very clear that if we can finish the EIS, we can at least start working on that TOD parcel.

Okay. Senator Elefante followed by Senator DeCourcey.

Yes. A few follow ups. So I was I was looking at the East Kapolei plan, right, that was adopted by the City Council in 2020. And then looking at the parcels that are indicated in this reso. So I don't know if both of you were at DLNR at the time, but did DLNR participate in any meetings to request for whatever specific parcel is listed to be industrial?

My understanding is, yes, DLNR was involved with that. I came I was in DLNR, but I was not with Land Division at the time when these discussions about being included in the TOD plan.

Okay.

That was all finalized. I came in at 2019. So between COVID and everything, there were already things in the works that kind of got solidified, and then it was kind of like I just had to accept it as what it was when I took it.

So of the four TMKs that are listed on the Reso, which particular parcel is DLNR looking at for industrial? Is it the 008, the 014, or the 097? It's on page one.

I'm not even not. It is going to be so the industrial parcel is one and two.

So it'd be 008.

The 008. So that's about close to 41 acres. Right?

Yes.

So all of that is what you're looking at, industrial mix use?

It was that one, and it is half of Parcel 014.

Which is 59 acres.

So, yeah, I believe that is

And this is all around that, that station. Right?

So that yeah. That's all the the Mauka parcels of the station.

Okay.

So the station parcel is the one that is indicated as 097.

Got it. Got it. Okay.

K. Just keep in mind that part of 008, there is a portion that is slated for the land swap with Doctor Horton to make the parcel near the TOD station more applicable to a developer because it's kind of missing a sliver here and it's a weird shape. So that I mean, that is d r fourteen is still interested in doing that. We just have to make it pencil out. Yeah.

That's swapped.

And then the last question I have, Chairs, is part of the reason for the your EIS is you're looking at doing a market study to also see if industrial warrants development on the parcels that you mentioned. Is

that correct? There has to be a demand for the industrial for us to even pursue it. If there's no demand, then it doesn't make sense, and we wouldn't pursue it.

K. Thank you.

K. Any further questions? Yep.

Yep. Thank you. So with the parcels that you folks have kind of designated for mixed use, how much does that leave us for development?

So right now, the whole of Parcel 4 the whole Parcel 97 isn't supposed to be housing and mixed use more heavily as on the housing portion. So that is the parcel that has the station right next door. Okay.

Sorry. How much Acres is that?

That one is

Before the land exchange, that would be 40.2 acres. If we do the land exchange, that would give us 48 acres.

Yeah. That's not much.

And then across the street, there was affordable housing planned within that fifth so about half of the 59.2 acres would go to housing.

Okay. When is your guys' EIS study gonna be completed?

It's supposed to be we're aiming for August. We're I'm hoping it does not get delayed anymore. I just wanna get it done so that we can actually start doing something

like that. So right now, it has 1,200 units of housing on the EIS. But once that's completed, then we can start working with HHFDC to getting housing there. And based on markets based on the market, we can react to it and do supplemental EISs.

Yeah. Okay.

Yeah. The the housing analysis back when we did the original market analysis, the problem was that the housing that was needed according to the study was it was low income housing that would have needed a lot of tax credits to supplement. That's the majority of the need. So, it was trying to find a balance between that and then trying to do the TOD idea where it's workforce housing, right. So, that's kind of where I think there might be a little bit of a struggle and balance.

So, you know, again HHFDC is more well off to handle that kind of issues, and we're more than willing to hand that off to them. Okay.

Thank you. Thank you, chair.

Any further comments, questions? If not, thank you very much. Alright. That is the only set of measures on our agenda today, so we're gonna go into recess. Hi.

Good afternoon. We're reconvening the joint committees on Waterland Culture and the Arts and Housing on our 01:05 p. M. Agenda here in State Capitol Conference Room 225. We just heard SCR 68 and SR 63.

Appreciate the vibrant discussion here. We'd like to recommend, chairs having conferred, moving both these measures forward and with everyone's indulgence, I'd like to be able to vote on both these measures, take them up at the same time. So the recommendation will be passing with amendments SCR 68 and SR 63. We'll make a couple amendments. First, noting the prioritization of rental housing for these parcels as well as

For sale housing? Sorry? As well as for sale housing.

As well as for sale housing. As well as noting that as the discussions between departments move forward, there should be MOAs that are brought before the board for to memorialize all this. So this isn't something that's gonna disappear into the ether and let this advance. Any discussion? And tech amendments.

Thank you. Excellent. Thank you. Okay. Seeing no discussion, acting vice chair for the vote.

Okay. For SCR 68 and SR 63 recommendation of the chair is to pass with amendments. Chair Lee?

Aye.

Senator Inouye is excused. Senator Chang?

Aye.

Senator LaMuscle also is an aye. Senator DeCote. Aye. Chair, recommendation is adopted.

Thank you. Thank you.

And for the Committee on Housing, the same recommendation to pass with amendments for SCR 68 and SR 63, chair votes aye.

Members, chair votes aye, vice chair votes aye. Senator Elefante. Aye. Senator Rhodes. Aye.

Senator Caffella. Aye. Chair recommendation is adopted.

Thank you very much. Thank you. We're adjourned.