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President's Message (Grace Furukawa)
Consensus on Gambling Study
Tax Reduction -- For Whom? (Astrid Monson)
Women's Coalition Package Update (Ina Percival)
League Testifies at the Public Hearing on One Archer Lane
League Monitors Domestic Violence Cases (Suzanne Meisenzahl)
Orientation Meeting (Grace Furukawa)
Campaign Finance
Making Democracy Work

League Testifies at the Public Hearing on One Archer Lane on July 9, 1997

Members of the Hawai Community Development Authority more than a dozen years ago Helen Griffin of the League of Women Voters of Honolulu was your Vice Chair. Along with others, she strongly supported redevelopment of Kakaako including some affordable housing, so that downtown and Waikiki employees could live there A requirement that 20% of all housing units built be at "affordable" prices or rents was adopted by the authority.

As might have been expected, this was not popular with developers. Only a small handful ever actually provided housing. The rest opted for "Payments in Lieu", which were set by a formula and intended to be placed in a housing fund out of which the required housing could be built elsewhere by the Authority or others.

In addition, developers were required to dedicate land for parks or pay a fee "in lieu" to cover a share of the costs of the public facilities needed as infrastructure for the redeveloped projects.

When One Archer Lane's application was reviewed several years ago, the original fees set totaled $7.17 million – $3.8 for housing and $3.37 million for public facilities. These, I am informed, were calculated on a expected total sales price of the 331 units of market housing of $96.8 million. On the average, this would have amounted to about $21,700 per unit out of an average price of $292,400, or about 7.4%.

As time went on, some of these requirements were reduced and applied retroactively One Archer Lane was now obligated to pay only $2 13 million in lieu of housing – 2 2% of the market value of the residential portions of the project. If applied to the 20% affordable housing requirement, this would average only $32,200 for each of the 66 units required to be affordable. Including the public facilities fee, the total requirement of $5.5 million would average about $16,600 for each of the 331 units in the project.

Today you are considering waiving the housing fee entirely and reducing the public facilities fee to $1.80 million. This would mean a reduction of 78% from the original requirements and of 67% from the already reduced present requirements. The amount payable would be down to $5,400 per unit.

Each of us who owns a home has seen its market value drop 10%, 20%, or more in recent years as the so-called Japanese bubble burst and Hawaii suffered a general economic recession. But no money lender has generously offered to reduce our mortgage payments accordingly, and we are held to the mortgage terms we agreed to in terms of our home's value at the time we bought it.

Developer Jack Myers has given as the basic reason for requesting these reductions a decline i on the market prices at which the units can now be sold. This can hardly be a decline of 67% from a year or two ago. We note that in One Archer Lane's June 29 advertisement in the Sunday paper it is stated that "the remaining inventory is priced from $224,900 to $355,00" – not much less than the average $292,400 originally calculated, and well above the current average price reported for condominium sales. if, indeed, present market prices are lower than expected, is this not the normal business risk an entrepreneur takes on in exchange for making a profit? Should the general public be expected to take the risk instead?

We believe that the proposed reductions are not justified. The language in the June 1997 and previous amendments to the requirements is not clear to us and seems to have been tailored specifically to permit retro-active amendments for this project, which we consider to be unconscionable. The HCDA rules do not require higher fees if market prices go up, and should not permit lower fees if they decline. We urge you to require all developers to comply with the agreements they made and the obligations they assumed when their projects were approved, just as the rest of us have to do when we buy property, build a home, or assume any other financial obligation.

Excerpts from the above testimony were aired on Public Radio(KHPR) on July 8 in the morning and afternoon as a public viewpoint from the League of Women Voters of Honolulu.

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