Housing and Land Use Committee (2025-2027) - Regular Meeting

Thank you. you Bye. you you

Good morning, everyone. Will the Housing Land Use Committee of June 3rd, 2026, please come to order. It is 9.08 a.m. And if you folks were tuning in just a minute ago, you heard the conversation between Chairmember Johnson and Keone. We're obviously making big plans for tomorrow. Chair Lee, one day I would love if you could hold a roast for us, honestly. You are so quick, it's hilarious. Anyways, I am the chair of this committee, Nohelani Uuhajens. Members, in accordance with the Sunshine Law, please identify my name, who, if anyone is in the room, vehicle, workspace with you today. Minors do not need to be identified. Committee Vice Chair Kawanoe Batongan is excused for today, so we will begin saying good morning to Council Member Tom Cook. Good morning and welcome back.

Aloha and welcome. I mean, aloha and good morning to all. Thank you.

Good morning. Councilmember Gabe Johnson, aloha.

Aloha, good morning, Chair, Councilmembers, community members. There's no testifiers here at the Lanai'i District Office. I'm alone on my side of the office and I'm here and ready to work. Thank you.

Thank you. Council Chair, Alice Lee, good morning.

Good morning, and if you're in Montana, Northwest Montana, you would say oki if you run into the Blackfoot Nation.

Oki. I'm home alone.

Sorry, I'm home alone in my workspace. Thank you. Thank you. Council Member Palten, aloha oki.

Thank you. Thank you. Council Member Rollins-Fernandez, aloha, good morning. I am at my private residence at the kitchen table.

It's summertime, so I have my husband, McKenna Fernandez, here, and my two children of minor ages also will be around, and no testifiers at the Moloka District Office. Mahalo, Chair.

Thank you. Council Member Shane Senancy, aloha and oki.

Aloha, Kayaka, Chair, and oki.

Okay. Member Sugimura is excused from now from the administration. We have with us Planning Director, Administrative Planning Officer Gregory Post, and Jackie Tucker, sorry, I didn't say her name. The Director of Housing, Remy Mitchell, Fire Captain Voss, which I'm sorry I didn't call you back yesterday during lunch. I totally spaced it. The Director of Finance for HLU 10 will be joining later, Deputy Corporation Council Nunakawa and Deputy Corporation Council Wiggersworth for HLU 10 as well. We have with us our HLU staff. Good morning, everyone. Please see the last page of the agenda for information on meeting connectivity and let's proceed with testimony at the beginning of the meeting. Do we have testifiers? No. Yeah, please do last call and then we can do testimony again at the beginning of Bill 78. So if you could just do a last call, thank you.

If somebody would like to testify in the chamber, please let staff know or on Microsoft Teams, please raise your hand. This is the last call. Three, two, one. Chair, it appears that nobody wishes to testify at the beginning of the meeting.

Thank you very much. Let's move on to Bill 78. So members, the first item on our agenda today is Bill 78, 2026, which would allow at least two accessory dwelling units for residential use on residentially zoned lots. Thank you very much. Consistent with state law. We had had this item posted for our last meeting, but we were unable to discuss it. This bill was referred to the Planning Commission last year. The Council did not receive the Commission's report within the 120-day period following the bill's referral. So the bill was referred to this committee without the report. Since then, though, the report has been submitted and is in your committee files. Assisting us with this item today is Director Takakura, Mr. Post, Director Mitchell, and Fire Captain Voss. The Department of Planning has a brief presentation for us on this bill. Before they present, I would like to give Council Chair Lee the opportunity to provide any opening comments as she is the one who reintroduced this bill. Chair, you have any comments for us before we begin with planning?

I think you covered all the bases. I just wanted to say that I believe, I'm asking for everybody's support, but I believe some members may have a couple of ASFs, which I haven't seen.

Okay. Thank you very much. Planning, would you like to begin either your presentation or if you have any comments?

Good morning and thank you, Chair Uhuha-Jens. I just wanna say we support providing more opportunities for housing, especially in the residential areas where there is typically adequate infrastructure. And of course, we would like to comply with state law. So now I'll pass it over to Greg, who will walk you through this bill and the commission's decisions and proposals, thank you.

Thank you, Jackie. Good morning, committee members. I have a brief PowerPoint presentation here to give you some background on accessory dwelling units and this law and what the planning commissions did. So next slide, please. You may recall that the council adopted resolution 25203 back in November, referring this item to the planning commissions. The planning commissions heard this item in February and March of this year. The main purpose of this bill is to comply with Act 39 which is a law signed by the governor in the legislative session of 2024 And it's now codified in HR section 46 dash 4.8. Next slide, please A little bit of background on Act 39. As I mentioned, it became effective on May 28th, 2024. It allows for two accessory dwellings per residentially zoned lot within the state. The county must adopt an ordinance by December 31st, 2026. And that's why we're here today. There are certain requirements and exceptions built into the law that the counties can consider, and those are, and I'll roughly just real quickly go through those, that accessory dwellings must comply with the underlying development standards required in the district that they are located, such as height requirements, setback requirements, parking requirements, and so forth. The county may deny any permits if insufficient utility infrastructure is not available to service the demand caused by the accessory dwellings. It defines a residentially zoned lot as being exempt in rural or low density residential developments and open space preservation areas. It does not apply to areas outside of the state urban district and it allows for the county to still have their powers related to issuing SMA permits and so forth. It also does not apply to any areas in the urban state district that are at high risk of flooding, lava or fire. Also, private covenants that were recorded prior to the effective date of the act may still restrict accessory dwellings. Next slide, please. A little bit of background on accessory dwellings and how we treat them in Maui County Code today, prior to this bill, prior to the act, is they're permitted in a variety of zoning districts, mostly our residential, of course, but a variety of other ones as well. We regulate them according to the underlying development standards within those zoning districts, as I mentioned, regarding to height, building setbacks, and so forth. But they're also regulated in relationship to chapter 19.35, which is a chapter within our code that specifically addresses accessory dwelling units. And within that chapter, it talks about how many accessory dwelling units you can have in Maui County and also some other standards that are applied to them specifically. And you'll note on this slide that currently the number of accessory dwelling units that are allowed per lot on Maui is one per every lot that is less than 7,500 square feet. and two for lots that are 7,500 square feet or greater. On Lanai and Molokai, only one is permitted on lots 7,500 square feet or greater. That is current law within our code. Chapter 19.35 also then has a variety of standards that apply specifically to accessory dwelling units. They have a maximum size requirement, and you may recall there was a recent change that the council approved increasing that size requirement on some of the smaller units. While they can be attached or detached to the main dwelling unit on a lot, they have to have a separate entrance and they can have no interior connection to the main dwelling unit. They cannot be used as a bed and breakfast, short-term rental home, or a transit vacation rental use, so they're only for long-term rental or ownership. They are required to have parking spaces, and those are required based upon the bedroom count, and that actually, you may recall, is also a recent change that the council did in applying residential developments to bedroom count as opposed to size of residential dwellings. And importantly, they must have adequate public facilities, and this is already within 19.35 related to, they must have adequate sewers disposal, fire protection, and street access related to fire access as well. Next slide, please. So that's all within our existing code that we implement today. The amendment that's before you is pretty straightforward, although it is 30 pages in ordinance because it affects a lot of our project districts. And so we've had to change a lot of our project districts because some of our project districts did not previously indicate that they had allowance for accessory dwelling units. So we had to add that in because some of our project districts have residentially zoned lots by state law. So we had to now allow those project districts to have accessory dwelling units. That's why the ordinance But mainly what the proposed revision does is it increases the number of accessory dwelling units per lot regardless of the lot size or regardless of island location. So now it's up to two accessory dwellings per lot. Next slide, please. As Jackie had mentioned, when the department reviewed this bill, the department was recommending support of the proposed bill to the planning commissions because the department felt that it was consistent with state law and Maui County General Plan, which has a variety of policies that encourages more housing through the provision of accessory dwellings. When the department did review the ordinance that was prepared and forwarded to the Planning Commission, we had 13 recommended modifications to the Planning Commission. Six of them, one, two, three, five, six, and seven were non-substantial recommendations. I don't think I need to go through those in any detail here. All of these recommendations are within your packet, within the reports of the Planning Commission defined in more detail, but briefly, regarding recommendation number four was removing lanai project districts one and two because they are low density and state law does not apply to low density residential subdivisions Excuse me. Recommendations number eight and number 11 affect currently in our code zero lot line districts do not allow for accessory dwellings, but they are residentially zoned lots. So we had to amend those two sections and recommend that zero lot line districts now allow for accessory dwellings. Regarding recommendations 9 and 10, those affect the Waikapu Country Town District and the Maui Research and Technology Park District because those two project districts have residentially zoned lots. And so they had limitations on the number of accessory dwellings that can be placed in those project districts. But because of state law, we're removing those limitations and that's a requirement. Regarding number 12, affecting our rural districts. So currently in our rural district, we permit accessory dwelling units. However, as I mentioned, state law excludes rural districts from the state act. And so what the department was recommending that in rural districts, we maintain the same requirements of one unit per lots under 7,500 square feet and two units for lots 7,500 square feet or greater. So taking more of a conservative approach in keeping with the existing code. Additionally, in Lanai and Molokai would only allow for one unit of lots 7,500 square feet in rural districts. So that was a recommendation number 12 that we were making to the department. I might note that the amendment summary form that is before you that made some minor modifications does not include that, but I've been talking to OCS staff and we recommend that making those changes to reflect that rural change. And then finally, the last recommendation, number 13, that the department was recommending was to add a section D to section 19-35090 that would require that a determination of adequate water supply be added to the infrastructure requirements in addition to sewer, in addition to fire access and so forth, so that before accessory dwelling units would be allowed, there would be a surety that there would be adequate water supply before we'd issue permits for those. Next slide, please. Within your packet, there is a comment letter from the Department of Fire and Public Safety issuing some comments. Their letter is dated December 22nd. While the Department of Fire and Public Safety did not believe that there was a conflict with the current fire code, they did have some concern about the increase in units will increase fuel load to properties and surrounding community. that the increase in units should consider infrastructure improvements water supply and roadways. Maintaining building separation and setbacks from property is important and should be applicable only to those neighborhoods that already meet or specifically designed to meet this density level. So those are concerns expressed by the fire department. As I noted some of the changes and provisions that we were recommending in the department's recommendations such as addressing water supply some of the existing infrastructure requirements requiring proper street access and fire for fire concerns have already addressed in the existing code or proposed code. So I think some of these concerns are addressed and we can discuss those further if you like. Next slide please. As I mentioned, we took this to the Planning Commissions in February and March. All three Planning Commissions recommended approval of the proposed bill with the department's 13 recommended modifications. The various Planning Commissions did have some comments. For example, the comment to Council for the Maui Planning Commission was to ensure that departments have the ability to provide or opportunity to provide property owners who are seeking early consultation regarding the availability of public facilities that are required to service a lot prior to their permits submittal so that folks can come in and actually talk to somebody in the department, hey, do I have enough water supply? Am I gonna get a permit before they actually start preparing plans? So that was a comment from the Maui Planning Commission. The Molokai Planning Commission, while they recommended approval, they expressed some concerns about impacts to existing septic systems and wastewater impacts due to the additional units and potential increased runoff due to development and whether or not this would lead to more short-term rentals and not enough enforcement. The Lanai Planning Commission, while they recommended also approval of the department's modifications, they had a comment to the council that the council consider the comments provided by the Maui and Molokai Planning Commissions. That concludes my presentation with the exception of one minor change that I would recommend that if it's okay, I would like to read into the record. There was a, as I mentioned regarding parking of accessory dwelling units, it's now by bedroom count. The existing parking requirements within the accessory dwelling section of 1935 indicate that accessory dwelling units only, or it implies that they're only required to have one accessory dwelling unit, one parking space per accessory dwelling unit. Whereas Chapter 19.36B, the parking regulations that we just changed, changed that to bedroom count. So in order to make sure we're clear on exactly that it's to the bedroom count, the department is recommending that there be a change to 19.35070 that would read as follows. An accessory dwelling shall have a carport garage or other off-street parking space to be used by residents. of the accessory dwelling and adding in accordance with chapter 19.36b in other words referring to the parking requirements section and then continue with the existing language the carport garage shall not exceed a total floor area 500 square feet and that concludes my presentation thank you thank you very much um

Do we have any other, I mean, Director Mitchell, did you wanna make any comments? Did you have any comments before I move on to testimony and discussion?

Thank you, Chair, for the opportunity. No comments from the Department of Housing. We did submit our comments in writing. Thank you.

Thank you. Before moving on to discussion, let's do some testimony for this item, HOU 12. Staff.

Chair, there is currently no one else who signed up left to testify.

I see somebody raising their hand now.

Chair, there is one person signed up to testify by the name of Jonathan Johan Lal.

Go ahead, Mr. Lal.

Aloha, I'm Yohan Lal. I'm testifying on my own behalf. One of the things that was brought up in the planning department's presentation was cesspool capacity or septic capacity. And I'm not too familiar with the state law and what restrictions you guys have or what freedom you have, but one way to deal with that would be, I guess, when these permits are going in for approval, that the planning or the public works departments would send them to DOH. for review because they manage those permits so maybe they're already part of that process i'm not sure but that would be my one comment thank you thank you any clarifying questions seeing none do we have any other testifiers

Chair, there is currently no one else who has signed up left to testify. If somebody would like to testify in the chamber, please let staff know, or on Microsoft Teams, please raise your hand. This is the final call. Three, two, one. Chair, it appears that nobody wishes to testify.

Thank you, and we will begin discussion with a three-minute round, but before we do, I'm going to introduce Member Sugimura. Good morning.

Good morning. Sorry for my tardiness.

Oh, yes. Good morning. Sorry, before we move on to discussion, actually without objection, I will now close oral testimony. Written testimony will continue to be accepted. Thank you very much.

No objections.

Thank you. Members, if you have any question, please feel free to raise your hand. The ASF was passed out. It's unfortunately not necessarily highlighted. There was a lot of changes to go over, but if you have any questions, please raise your hand. Member Cook.

Thank you, Chair. My question for planning for interpretation, because of lot sizes and the setbacks to have individual structures, is it possible to add two connected units as long as none of them have common access? Would that be one way to basically be able to get three units on one of these lots? Yes, they can do that, yes. Okay, and the one-story to two-story aspect, the one-story, two-story setbacks would... yes those would still apply yes they'll apply and my next question I guess is also the planning the mandatory state requirements for additional dwelling units to have adequate infrastructure how will that come into play for projects that are being proposed would they be looked at for potential maximum density or would they be proposed for simply what they're proposing to build?

Thank you for the question so anytime a building permit comes through to Public Works DSA It's routed to all the departments including water supply wastewater and so forth and they do make that determination about adequacy So that's already existing in the process. So if there if it was inadequate then They I don't think the permit can move forward Okay for clarification

One of the things that's occurred in the past when I was talking to a previous director of water supply subdivision in Wailuku, where they had all single family residences, and then half of them successfully could build in Ohana. And then when the other half started coming in, they said, you have to upgrade the water line. And I didn't understand that. And he clarified to me, well, they put in an eight inch water line, the water department requested 50, they did put in a contingency, but they didn't plan on everybody having an ohana, even though technically they could do it. So I'm just wondering as far as clarification with the public and also for the departments not to get pushback, we're making this roll, but then potentially we're approving projects that don't enable it. I'm just wondering if that's being thought of at all.

Yeah, it's a really good question in that actually that same issue came up during the discussion at the Maui Planning Commission, and we actually had Department of Water Supply there available as well. And it really was like when you when you reach that threshold of not having enough water supply to be able to service. And I think that example is a very good one. And It's kind of like the Department of Water Supply is gonna have to, when it reaches that point, it then will have to indicate that we can no longer issue additional accessory dwelling unit permits in this particular area. And that was basically the response. And so that was, we added Part of this proposal is adding the requirement that adequate water supply be provided or shown. So when it gets routed to those departments, those departments will have the ability to review that before a permit is issued. So I think that issue is going to be addressed, but it will be more of a broader announcement if there is lack of water supply for any particular reason, such as maybe the line's not large enough or there just isn't enough water.

Thank you, I heard the bell. I'll wait for my second round, thank you.

Thank you, Member Cook. Members, do you have any other? Member Palten, followed by Member Johnson.

You know the cesspool conversion situation, so if they are wanting to build an ADU but they still have a cesspool, will that need to be addressed first?

I'm not exactly sure. I know that within the existing code in 193509 of public facilities required for accessory dwellings, the first section just says adequate of sewage disposal system. This kind of gets at the speaker's comment as well that this will be secured in writing from the Department of Environmental Management for public sewer system and the State of Hawaii Department of Health for individual wastewater systems. It requires their review, so whether or not they have to replace or not, I'm not sure.

The chair says they will. And then, I mean, what they were saying about septic systems, a lot of times it's based on bedrooms. And so if you're adding another ADU, that's going to be more than the bedrooms that your system is designed for, and so that'll have to be addressed as well?

That would have to be addressed before permit issuance.

Okay, and then the part about private covenants prior to May 2024 may still restrict ADUs, so there's no private covenants going forward that could restrict ADUs?

That would be correct. So it's just the ones that are prior to the act being effective that would restrict ADUs.

Okay, and then... the change that you said for 19.35.070 that would refer to 19.36B, we won't have to go to the Planning Commission, back to the Planning Commission about that? Was that already... addressed by the Planning Commission the first time or no because it was only recently passed prior to it going to the Planning Commission? Or how does that work? Because sometimes we're not allowed to add things that the Planning Commission didn't consider.

I think I'd have to maybe ask council to apply a bit. All this amendment that I read in the record is more of a clarity, just clarifying that.

For the ease of understanding.

Yeah, because 1936B that was passed by the council applies to accessory dwellings. And it's just that this section in 1935 So it's kind of non-substantial. Yeah, it's kind of little, it doesn't really say, it says actually a parking space shall be provided, but it doesn't, I prefer that it references 1936B for clarity to make sure that we're talking about the same thing.

Okay, so non-substantial.

So I think it's non-substantial.

I think I had an ASF would now be the time to distribute it.

My plan was to exhaust some of this discussion and then do that afterwards and then either work off of probably my ASF because it had a little bit more changes and then incorporate your language. Okay. Then discuss some of the changes as the planning department just proposed. Okay, um if that's okay, but you're welcome to speak to some of it.

Okay. Um, I introduced an ASF because um, I Remember called a project that we didn't keep that specifically prohibited ad use and I guess the advice was that the county Would supersede on that and so it's just seeing like, you know County whatever supersedes, not saying that we couldn't amend the condition of the change in zoning that limited to no ADUs, but just saying that our condition of zoning supersedes the state mandate. And we can go into further detail when we go to the ASFs.

Okay, sounds good. When I needed to do permits, Member Poulton, when we had to do a project that was on assess pool, we had to send it to DOH because it's a private wastewater system. And then they review your plans for an IWS. So you have to make that change in order for them to approve and for the rest of everybody to approve. And then typically when you have your IWS, you do accommodate for bedrooms. But the standard advice is to go bigger than what you need if your space can allow it, especially if you have the least field capabilities. So hopefully... that was considered, you know, to have some space and then yes, they will, they will need to comply with state law because I think we have until 2050. Um, and that's how they plan on doing it. It's a incremental as people adjust their house. Um, member Paul, I'm sorry, member Johnson, did you have questions?

Yes. Thank you. Thank you chair. Uh, thank you department for, being with us today. I got some questions in regards to Lanai. Now I understand that you guys said that they're taking away the lot size but then number 12 says we're going to keep Lanai's lot size. Can you clarify on that? I know you're going in blazing speed Mr. Post but if you've been to Lanai you know some of our old plantation houses are like 600 square feet and very small and the lot sizes on Lanai I mean, 5,000 square feet is a lot of our lot sizes. So if it keeps the old one, then we're missing the mark. But I'd like to hear Mr. Post on that because it sounded like we're, I'd like to hear what you say.

Yes, thank you for the question. The modification number 12 specifically was focused on rural lots. And Jackie and I were just looking whether or not there actually are rural lots on Lanai'i. We actually weren't able to find any. I'm not sure if there are rural lots on Lanai'i. But this only affects rural lots. And what we were indicating is, or what the department was recommending was that state law does not the two dwelling units does not apply to rural lots. It only applies to lots that are in urban districts. So the department was taking more of a conservative approach and then keeping the existing standards that we have right now for rural lots, which would be one dwelling unit per less than 7,500 square feet or one dwelling unit for 7,500 square feet or two for 7,500 square feet or greater, as opposed to just allowing two blanket is what what would happen in all the other residential zoning districts. So I'm not sure if number 12 actually applies to Lanai, if there are no rural lots of Lanai anyway, so.

So we're not urban lots, are we? I mean, if it's not rural, then what are we?

Mostly residential district in Lanai City. Residential, yeah. Yeah, and then project district, a significant portion of is obviously conservation and agriculture on Lanai, but within Lanai City, it's mostly residential and other areas, but I don't think there are any rural areas.

So that's good news. I just wanted to make sure that we were hitting that mark because of how small our lot sizes are online. But our houses aren't big, right? So I think there's room for us to have that really work well. Okay, thanks for that. That was my big question. I wanted to sort that out. Thank you, Chair.

Thank you, Member Johnson. I see Captain Voss's hand up, so I'll let him go. And then I see Chair Lee's hand up as well.

Hi, good morning, everyone.

Good morning.

You can hear me okay?

We can, thank you.

So just before it gets washed over, I just wanted to make a comment on the back of Council Member Cook's comment about infrastructure and what happens when we reach that limit. So planning did a great job of considering our comments and basically saying, like, as long as the infrastructure for public safety is there, they're good. I think what can happen is at one point they get this tipping point. After there's so many units, all of a sudden fire says, now the infrastructure isn't good anymore. One of the things that may happen in the future in a code change from us, and I'm just giving a heads up, is that the original access was for 20 parcels. At 20 parcels, you need a second access. and that was you know back in the day where we had two units possibly per parcel so as we now allow three and four units we're gonna be revisiting that second access requirement especially in light of you know what happened in in lahaina so If we were to equate that before, 20 parcels equaled about 40 dwellings. Now, 20 parcels could be 60 to 80 dwellings. So what I'm talking about here with the tipping point is as we make these amendments based on dwellings, not parcels, you could have a street where you're good, you're good, you're good, and then all of a sudden you're saying, no, sorry, you don't have a second way out. You can't build that second or third dwelling. So that that could be coming down the pipe and it's something that we just want to make sure that that's how the fire department would look at it when we review about access and the same goes for water supply. Most of Lahaina for you know a lot of areas we're trying to get to 1000 GPM with cooperation from the water department and that's the minimum for typical house. So I think we'll be OK there until they tell me no, we no longer have the 1000 but. Just another note that in areas that are sure with less than 1000 GPM, which I don't believe they're the type of lots you're talking about, they also wouldn't meet the requirement. So fire department does have the ability to help some people by doing alternative things like setbacks and sprinklers to overcome some access issues. but we certainly would never develop an entire neighborhood based on that. That's more for our rural people who don't don't have the means. You know, we typically review a subdivision. Conditions are set. Their limitations are set there and then we just review individual building permits after that. What we're doing with this is we're changing the limits of that subdivision without reviewing that subdivision. So now. it falls on the individual owner or person who introduces that permit to, and they won't have the means to improve the infrastructure. So that's just one kind of caution that I think we need to consider. I don't know if it'll change this bill at all because we are saying it needs to meet it. But again, like Mr. Cook said, There'll be circumstances where people are convinced they can do this or possibly even invest in a property with thinking they can put three or four dwellings and then come to find out when they do their permits, maybe they're not gonna meet it. So I think we need a little transparency there for people. That's all.

Thank you, Captain Voss. I appreciate those comments. Chair Lee.

I have a question for planning. I think Mr. Post, You mentioned the R0 zone. That's something for your information was created back in 1989, 1990 by my committee. And those lot sizes are very small, 3,000 to 6,000 square feet. So did you say they were exempt or? where people are still allowed to add two dwellings to something as small as that.

Yes, thank you. Yes, on the R0 districts, whether it's the overlay or the existing district, both of those actually do not allow accessory dwellings right now. It stated that in code. But the problem is that state law applies to all residentially zoned lots, and both of those districts are on residentially zoned lots within our R1, R2, or R3. So the proposed amendments in before you are to change those to the overlay district and the R0 district to now allow accessory dwellings, allow two accessory dwellings just like any other residentially zoned lot. I agree that those lots, typically you are correct, are relatively small, and so that may create a problem for the property owner whether or not they can get accessory dwellings on that property. But we have to at least, in my opinion, per state law, have to at least allow it to occur. Whether or not they can do it or not, I'm not sure, given the size of the lot.

Okay, thank you for that clarification. And the other clarification is, although the state law and county law allows for Ohana dwellings or these ADUs on certain size lots, I think it should be noted for everyone that CCNRs prohibit ADUs in many of the new subdivisions. So I think this, what we're passing now applies to the older subdivisions like Dream City, Pukalani, those where they have 10,000 square foot lots, 12,000 square foot lots, et cetera. But as far as any subdivision that was built in the last 10, 15, even 20 years, probably prohibits Ohana dwellings. And that's a contract that we signed as buyers into the subdivision. So I think, I hope that's not gonna be a problem because we knowingly signed, volunteered to prohibit ourselves from adding ADUs or Ohana dwellings. Do you have a comment on that?

Thank you. You're exactly right in that the state law, and importantly, the state law does not apply to any subdivisions that have CC&Rs that restrict accessory dwellings. So you are correct that those subdivisions, the newer subdivisions within their CC&Rs will still prevail over state law.

Thank you. Can I ask a question, just a follow-up, and then I saw Member Cook, his hand was up. I think that's what Member Poulton was discussing earlier. Now, going forward, when we continue to permit homes and projects to provide homes for our local people, is that a condition we can no longer apply anymore because of the state law?

That's correct. It's really that subdivision when they create their CCNRs that they should not be putting that requirement within their CCNRs because that would be a violation of state law.

Okay. So the subdivisions in the last 20 some odd years, we're going to acknowledge that, you know, we cannot retroactively change those conditions, but moving forward, that's no longer an applicable condition.

That is correct.

Okay. Thank you. Member Cook, sorry to interrupt.

no no thank you chair thank you little sidebar I think for the zero lot lines they might be able to do a second story and pull that off over a carport or something as an option so Addressing like the infrastructure aspect of it and this is really I'm looking at it from a policy perspective And I'm really glad we're having this discussion and I'm hoping that these questions will help us address the input the impact from all of the different departments like so To account for and enable plan density requirements for new housing that this is basically striving to encourage the density is going to require new infrastructure be accounted for that'll add additional cost but if we account for it early it eliminates delays and costly further upgrades so is this a possible we policy possible use of affordable housing g e t funds to cost share public policy. And the discussion of this is basically. for the community to how much are we buying into this additional density and how much are we supporting this additional density policy if we're going to cooperate with the additional cost for potential infrastructure that's not necessarily needed but the law technically allows for it and the law encourages it but you don't have to do it, and a developer probably wouldn't do it because of the cost factors, so I'm just proposing that that's something that we consider in these discussions that the county utilize affordable housing funds to enable people to put in bigger, what it is is bigger pipes, bigger valves, and it's a lot cheaper then than later. Has there been any discussion of that with the departments, and what is your feedback?

I think that it is definitely a policy issue on how the council would like to move forward in helping to support the production of accessory dwelling units, especially in those areas that perhaps don't have the infrastructure, like you mentioned, that example of the water line not being large enough, whether or not the council wants to take that on and do something about that in order to provide that. I can't comment on whether or not the use of affordable housing funds can be used towards that. That's, I think, another department probably, housing department might want to comment on that. But yeah, I think that's definitely a bigger policy issue and the council should consider how to support this and allow them to further.

And I just wanna add, this is one step in the process for allowing more housing, but another step would be when you consider the annual budget and the infrastructure to work with the department. They're gonna know where the inadequacies are, and if those could be funded, then that will open up the opportunity for more housing. Thank you.

The Department of Housing have any comments?

Thank you, Chair, and thank you, Member Cook, and thank you for your observation. It's sort of a two-phase issue. When a project's being initially developed, that's the time the developer would anticipate the number of units that could be on a lot that go beyond just the number of lots and seek affordable housing funds for the infrastructure component. The second is after the project's finished, the developer's gone, and then you have the problem of some number of homeowners discovering belatedly we have inadequate water infrastructure. That's a different challenge, and I think that requires a different solution because one would need to have what is typically called a participation agreement for all the homeowners to participate in the cost related to expanding the system for the entire development. It shouldn't really fall on one or two or three of the homeowners who happen to have hit that wall where they can no longer build their ohana because now they've maxed out the infrastructure. So that's a slightly different discussion that I think is a policy issue. Thanks. Thank you. I heard the bell.

Members, does anybody else have any other questions? Member Allens-Fernandez.

Hello, Chair. I don't think I heard this yet, but along the same lines, so then, and this will also be a different discussion for later, but should be on our radar because of the state law requiring us to do this. We'll In future subdivision approvals, will the infrastructure that will then be required envision two ADUs on all the lots that have main dwellings? Is that something that was discussed? Yeah.

Member Cook is nodding his head.

So I don't know if that was like something that was also discussed.

I think that's kind of what Member Cook was alluding to and then how we're going to support that policy moving forward. But if you guys wanted to acknowledge if it was previously discussed, maybe in planning commissions, if at all.

Right, because Member Cook is talking about the challenge of the subdivisions that were already approved without the necessary infrastructure to support that level of development.

Yeah, sounded like you meant a little bit of both. Yeah. Okay.

Yeah.

Was that previously considered in any planning commissions or from you folks as well? I know you just said it's a policy issue.

Thank you for the question. The planning commissions were really concerned more about that individual property owner trying to come forward, at least the Maui Planning Commission, trying to come forward and wanting to do an accessory dwelling unit. and then being told after they draft their plans and had a consultant get on board or an architect that being told by an agency within the county that, oh, sorry, so sorry, we don't have enough water or enough sewer to be able to accommodate your. So the Maui Planning Commission was just, I think, moving forward or requesting that the council consider that, that the departments be available to meet with property owners in advance of them doing anything in regards, even before they decide to draft plans, that the departments be available for people to come in and be able to talk about whether or not there's enough water resources or sewer resources on their property or fire-related resources. So I think that's really a comment to the council in whether or not those departments, and I'm sure those departments are available to speak to people that come in to talk about those issues. But we did not get into the discussion of future subdivisions and whether or not those future subdivisions now need to account for a single family dwelling and two ADUs on every lot. I'm not sure how that, I think that's really a point of the developer wanting to do that on how much commitment to infrastructure the developer's willing to put forward, whether or not that can support that exactly, that density or not. So that's an interesting, it's an interesting discussion point of how future development will occur, but that was not discussed on the Planning Commission.

All right, for another day then, I guess. Mahalo, Chair. Thank you. Member Palten.

The comment, or I'm not sure if it's a comment or recommendation from, I think, the Maui Planning Commission about having the water department be available to confirm or deny if they have the water infrastructure to build two EDUs on a lot. How do we determine if we hit that or if we need five or six votes? Is it just a comment or a recommendation?

It was just a comment from the Maui Planning Commission. It's nothing within the code that was actually structurally put in the code. It was just that, and I'll read the comment, that the departments responsible for reviewing permits for accessory dwellings should provide an opportunity for property owners to seek early consultation regarding the availability of public facilities that are required to service the lot prior to permissible. So it's just a comment that they were concerned about it. Hey, just wanted to make the council aware of that concern. that I'm sure that the departments will have to then, theoretically they should be meeting. I know the planning department meets with folks early on in the process to hopefully help them along with their process.

I guess then my comment would be that whenever if this bill becomes a media story, it shouldn't be that. or anybody in residential or urban can have to use, it would be like the caveat, like you need to have enough space for your setbacks, you need to have enough space for your parking, you need to have enough entrances and exits depending on what the fire code becomes, you need to have water, sewer taken care of, because same thing, like people just need just read the headlines and be like, oh, now I can have two ADUs. They start buying the stuff already and they don't know of the caveats or situation. And I don't know whose role it is to fashion the story in that way. But I think... all of the great minds in this room working together could probably put together a little cheat sheet, like make sure you have this, this, this, and this taken care of before you contract with someone and order lumber and put that out with the press release of this bill if it passes first and second reading or whatever.

Did you want to answer that? I know we discussed that in our pre-meeting meeting.

I was just going to say that is a really good comment. The more advanced notice that we can let people know about accessory dwelling units and what they may face to build them would be great. I know of other jurisdictions that actually put out pamphlets and stuff like that on their website that actually inform how to do it. I know jurisdictions that actually create actually plans that they could use to actually implement. So it may be that kind of movement in that direction. Importantly, I just wanted to say that what is really great about the state law and our existing code is that we have the section 193090 that actually says public facilities required. So if you want to do an accessory dwelling unit, you're going to go to this section in 1935 first, and then you're going to see this section that says you need these public facilities. So it is kind of a forewarning of that you should consider this before you actually do this. And so I'm sure that will kind of at least cause folks to actually come into the county and go, hey, do I meet these requirements? So at least that's in the code. But you're right, a press release that-

some sort of like friendly thing that says, and then even like maybe about recent changes, like prior it used to be, you could have only a 500 square foot. Like you can have up to, what is it? 720 now or something. yes that's 720 max on the smaller size and then as your lot gets bigger you can have larger ones yeah because i mean we're plugging away here but i don't know if the guy on the street knows like all these new things which are meant to make it better and easier or whatever safer but like some sort of lay persons like did you guys know this just happened or whatever but make sure you check this this and this yeah thank you in our pre-meeting we discussed like

limitations to certain areas, like upcountry, we have a water shortage, so it's very difficult to have it. For you folks in Lahaina, you're gonna have to get sea worm involved. For Central Maui, there's wastewater infrastructure concerns, and so, Until we get some of those things figured out, where we're going to see the potential use for these ADU lots, it's not going to be like a big boom. But I think people, yeah, I don't want to burst anybody's bubble, but it's going to be quite limiting for a little while. But the fact that we are even allowing it in majority of the areas is good news.

Yeah, and also maybe depend on how your existing house and ADU are set up so it may be better suited for people with empty lots to try and design now if they're gonna go vertical. I mean, there's more potential. But if you already have an existing ADU and an existing house and it takes up majority of your lot, then you're a little SOL unless you go vertical on an existing thing and then have parking and whatnot.

Thank you. Member Sinensi?

Mahalo, Chair, and yeah, for East Maui, I guess our limitations would be the cesspool conversions. We had a family that wanted to do an accessory dwelling but did not have the cesspool capacity, so they were even considering knocking down a wall in the main house so that they could potentially have another another room in the accessory dwelling. But to those concerns for Hana, I mean, if we don't have the capacity, we just can't. to do an accessory. Chair, you mentioned the leach field.

Oh yeah, with your septic tank, you're required to have a leach field.

So you do, I mean, at times you would have to increase the leach field?

Depending on the amount of bedrooms, but yes.

Got it. And this is not just for accessory dwellings. Even if you want to expand your main house and add more rooms, you would still need the capacity for your cesspool.

Yeah, and conversion if you have a cesspool.

Got it. Okay, thank you.

Yeah. I have a quick question, Member Cook, one second. So for the language related to the carport and garage, are we envisioning a individual carport and garage special to the ADUs or is there an existing carport and garage that can be utilized with the ADUs?

Thank you. The ADU does not need a carport or a garage. It can have an open parking space to meet this requirement. So this section just talks about if you did have a garage or a carport for an ADU, it has to be no bigger than 500 square feet. So it does indicate that. But the problem with this section, the reason why we wanted to amend it, because it implies that you only need one parking space when actually you need more per 1936B. And that's why I wanted to just insert in accordance with 1936B, so it's clear.

Okay, I'm probably gonna take a quick recess and we can discuss where that's gonna go after Member Cook if we've exhausted discussion before we move on to voting. Member Cook.

Thank you, Chair. Kind of building upon or addressing Captain Voss's comment, and it integrates in with what my earlier one was, is foresight. fire water for fire mitigation has been is kind of like the stickler that prevents a lot of things from happening and I found working with the fire department they're very pliable and flexible as far as when you can do sprinklers and when you can do things but what's okay under three conditions and then all of a sudden you change it to a fourth condition and those things no longer apply because they have a different guideline for that density and whatnot so this is me plugging again the county and the departments upgrading and becoming more progressive and our infrastructure so that when we're doing these things and we're required like for fire that should be pretty easily justifiable public partial public funding to upgrade pipe size to enable fire prison fire prevention and that's one of the things that in a development the developer is always going to be like trying to make it pencil out so i'm just sharing with us when we're striving to enable affordable housing and density etc one of the ways that we collectively as a the local government and the council can enable that is to basically identify some of these cost factors that are really beneficial for the community as a whole and see if that's something that through policy we can help pay for. Thank you.

Thank you. Member Palten. To follow up on Member Cook's point, I would say if we're seeing the public benefit being affordable housing for our people, then we would need to ensure that if we're putting in public affordable housing money to upgrade the infrastructure that the rental is then affordable for at least a set amount of time. Because in West Maui, we're seeing like, you know, $5,000 one bedrooms and stuff like that. You can rent one room in a house for $2,000 or things like that, which is not affordable, which I would not support putting affordable housing monies to do that because then they're raking in like five grand or two grand for a bedroom, which doesn't necessarily help the rental market. So it's gotta track. and be enforceable and things like that before we're releasing public funds for people to make money.

You can have a quick response, but it is a future discussion we can have in the future.

I totally concur because exactly what you're saying. And in my optimism, we're going to find a balance in some time where these stupid abusive rentals won't be justified because maybe we'll have more places and people will get more heart thank you for bringing that up i concur

I think what's also important to note as it relates to fire safety is, as you know, now we have fire rated walls. If the homes are close together, we have the requirement for fire extinguishers in certain places. And so we are a lot more safer now than we were before. And if you're going to permit it now, then you have to follow today's codes and you're going to need to provide, you know, fire rated walls and, and do those sorts of things. Does anybody have any other questions before I take a quick recess so I can figure out where we're gonna make those amendments and include Member Palten's amendment as well? Okay, seeing no further discussion, I'm gonna take a five-minute recess. See you in a few. Good morning and welcome back to today's HOU meeting. Thank you for allowing us a recess as we kind of navigate all the changes we need to do to pass this bill. So before I make or request a motion, I'm gonna just ask our members if we have any other discussion before I move on. Okay. Seeing none, thank you. Members, I will entertain a motion to recommend passage on first reading of Bill 78-2026, including any non-substantive revisions. Thank you. I have a motion made by Member Cook. Second. And a second by Chair Lee. Thank you. Members, if you don't mind, we do have to make a couple changes if you wouldn't mind saving some discussion for a bit. So at this time, I am going to also entertain a motion to amend Bill 87 by replacing it with the CD1 version attached to my ASF that was distributed at the beginning of this meeting. So moved. Thank you. I have a motion by Member Palten and a second by Chair Lee. Thank you and then we're gonna have one more amendment and then take a vote and then two more amendments. Member Palten.

Thank you, I move to insert right before section 21. On page 39. On page 39, I move to amend bill 78 CD1 to add before section 21 and renumber the following as follows. This ordinance does not affect conditional zoning agreements that were, executed under section 19.510.050 Maui County Code before its effective date. It's posted on Granite Kiss with a little separate wording that Corp Council different wording that Corp Council advised that I amend to say instead of conditional zoning ordinances, conditional zoning agreements, and instead of enacted, execute it. So that's the amendment. And it's not to say that we couldn't go back and amend those agreements. Oh, thank you. Amend those agreements, but just to assert council authority.

Thank you, so I have a motion by Member Palten and a second by Chair Lee and she in part did her discussion during that motion. Any further discussion? Okay, so this, I'm gonna do a vote now and it's gonna include the ASF and the changes for the ASF and Member Palten's change. So, oh, I'm gonna wait one second till Member Cook gets his camera on. Thank you. All those in favor of the two motions made, please raise your hand and say aye. Aye.

Chair, you have seven ayes to excuse members Butongan and Sugimura.

Thank you very much. I do have a couple changes, amendments I'm gonna propose as well for the Planning Department. So members on page three, I move to amend section 19-35050 to include the restructuring to insert the language as discussed for the rural zoning. and thank you, I'll go do both at one time, and as well as including a new section for 1935-07-0 to accommodate the parking language as discussed in planning's discussion as well. I have a motion by my member Senancy to have a second by member Paltin. As for my discussion, we discussed this. We're just making it consistent with rural as it's currently allowed in the Maui County Code and to accommodate the new parking language. Any further discussion? Seeing none, all those in favor, please raise your hand and say aye.

Aye. Chair, you have seven ayes to excuse members Batonga and Sugimura.

Thank you. Members, does anybody have discussion on the main motion as amended? Member Johnson, go ahead.

Thank you, Chair. I support this bill as amended. And the fact that we can now open up the door for more ADUs for our people in a housing crisis, I think this is with the swipe of a pen in many ways that we are now unlocking, untying the knots that some of our bureaucratic processes left our small homeowners without any options. I think this is a good way to do it and I rise in full support. Thank you, Chair.

Thank you, Member Johnson. I appreciate the comments. I agree. Member Rollins-Fernandez. Mahalo, Chair.

I'm supportive of this. because we have to be, because the state is forcing us to be. And for that reason, I resent that. I strongly believe in home rule, and I resent the state for eroding our home rule authority regarding land use and zoning. I'm happy that the planning commission and the administration have, including the fire department, found ways to ensure that there are guardrails and safeguards in place since we no longer have that authority because the state took it away. And yeah, support this.

Okay, thanks. Thank you. Sorry, I didn't know my mic was on. And I'm so glad you tell us how you really feel all the time. Member Palten.

I don't know if it would be committee work or a PAF, but reiterating the desire to have more education onto the nuance, whether it's clearly spelled out in the committee report and then the committee report sent as a press release or something, because I don't want anyone to just read the headline and go out and buy some stuff without their lot is eligible and their infrastructure is adequate. That happens a lot with people that just been through fire or flood or a situation like that. So I just want us to make every effort to fully educate the county residents on how, where, what details. Thank you.

Thank you, I think that was heard and acknowledged by Planning Department and my HOU staff can help as well and we can do a press release. Any other discussion? Seeing none, all those in favor of the amended bill, please raise your hand and say aye. Aye.

Chair, you have seven ayes to excuse, members Patonga and Sugimura.

Thank you very much, members. Moving on. We have before us the second item on our agenda today is Bill 84, which would set the cap of five allowed bed and breakfast homes on Molokai and specify where they can be located. The bill also restricts the proximity of one bed and breakfast home to another on Molokai. The Molokai Planning Commission discussed this matter earlier this year and recommended approval. Their recommendation and the department's report are available on Granicus as item number two. Assisting us today from the Department of Plan Air, planning, I'm sorry, is again, Director Takakura and Mr. Post. Before I ask for their presentation, I'd like to give Member Rollins-Fernandez an opportunity to provide any opening comments as the introducer of this bill. So Member Rollins-Fernandez, if you please.

Mahalo, Chair. So this idea came from the community members that were requesting a cap because there was no cap prior to this, as I mentioned, before we sent this bill to the Molokai Planning Commission. I think Planning Department will go over in their remarks the situation. Aloha, Director Mitchell. But anyway, so I did attend the Molokai Planning Commission meeting. I encouraged them to discuss the number as the cap of five, the areas that would be considered and the density. And so they did have a discussion on that and have transmitted their recommendation that the planning department will go over. And I'm fully supportive of that. Mahalo, Chair.

Thank you, Member Rollins-Fernandez. Planning department, do you have a presentation? And then we'll go to testimony. Thank you.

Yes, thank you, Chair. I have just a real brief few slides presentation here that was really more or less discussed in the opening remarks. As a way of background, next slide, please. A way of background, this was Resolution 25-190 was adopted by the council forwarding this to the Molokai Planning Commission back in October. The Molokai Planning Commission heard this on January 28th. The purpose of the bill, as mentioned and as discussed at that October council meeting, was to establish a density requirement for bed and breakfasts to preserve character of neighborhoods in Molokai and really seeking the commission and community input on what that density of B&Bs would be. Real quickly, just current code requirements, if you're not familiar with B&Bs, they are permitted in a variety of zoning districts through approval of a permit, either from the director or the planning commission, and meeting various certain requirements within section 19.64, which is specifically focused on bed and breakfast home permits. There's a maximum number of B&Bs permitted within section 1964 per community plan area But Molokai is unique in that it has no cap on the number of B&Bs that can be issued Permits that can be issued on Molokai all other community plan areas do have a cap Currently there's been one bread and breakfast permit that has been issued on Molokai and that was issued back in 2018 Additionally, within the requirements in 1964, there's no separation requirements for V&Bs except for on Lanai, which has a 300-foot separation and does not allow more than one on a block. Next slide, please. When the department reviewed this proposal, the department, well, actually, let me talk about the amendment first. The proposed amendment establishes a max cap of no more than five B&Bs on Molokai, so that would be establishing a new cap. And then it would establish a requirement that B&Bs on Molokai not be located within 1,000 feet of each other. When the planning department looked at this bill, we didn't have any comments. We did not see any specific impacts. We believe that it's generally consistent with the general plan, but we really felt it was more of a policy matter for the community of Molokai to determine what that cap may be and would encourage the Molokai Planning Commission to make that determination on behalf of the community and hear community input. Next slide, please. So at the Molokai Planning Commission, which was held in January, they recommended approval of the proposed bill with some amendments. They did agree with a maximum cap of five B&B permits issued island-wide, and it would be allocated to specific areas on Molokai, and that's noted within the slide that I have here. They also indicated within these areas, bed and breakfast homes must be at least a minimum of 3,000 feet apart as measured from the property line. So those were the recommendations that the Molokai Planning Commission had. and the department would support those as well. And that concludes my presentation, and if you have any questions, hopefully I can answer them for you. Thank you.

Thank you. Before we get into discussion, staff, is there anybody wanting to testify on this item?

Chair, there is currently no one signed up to testify.

Thank you, members without a, yeah?

We have one testimony.

Oh, I see, yep, I see their hand. Go ahead.

Chair, the only person signed up to testify right now is Keopuni Kahawaiipai'aina.

Aloha.

Aloha, this is a representative of . And any other decisions that is being made today, so the lands that are being decided on and having you guys make decisions on the royal patent descendants of all the lands have not been notified. have not been notified from the decisions that are being made. And I think, and I'm pretty sure that's a violation, and a violation on an international level, because the Royal Patent descendants should have been notified and they weren't. And how is that possible making decisions on royal patented lands um and if it it's not the people's land it obviously is the king's land and you guys cannot be making decisions on it um because it's crown lands government lands and regular royal patented lands and um Again, please notify the descendants of all the lands that you guys are making decisions on. Because all the decisions that are being made are all on Royal patented Elodio titled lands recognized already in the TMK. And a bunch of the TMKs, so you guys are changing the zoning and stuff like that. It's supposed to be showing the Royal patent also on everybody and every single person's TMK. It's being changed illegally right now, and that's a very great concern. And I request that you guys please call the descendants of the Royal Patented Lands because those are the specific families that belong to all the different specific lands that you guys are making illegal decisions on. And please, with the TMK part, please check that. That's one of my biggest concerns, because why is it being changed again? And yeah, change it back for where it shows the royal patent, because it's supposed to, yeah. Mahalo.

Thank you for your testimony, members. Any clarifying questions? Seeing none, thank you. Next testifier, please.

Chair, there is currently no one else signed up to testify. Would you like me to issue a last call?

Yes, please.

If somebody would like to testify in the chamber, please let staff know. Or on Microsoft Teams, please raise your hand. This is the final call. Three, two, one. Chair, it appears that nobody wishes to testify.

Thank you, members. Seeing there are no other individuals wishing to testify without objection, I will now close oral testimony. Thank you, and as a reminder, written testimony will continue to be accepted. Members, any discussion? I don't really have much either. Okay, great. Just double, triple checking before I move on. Okay, well, at this time then, I will entertain a motion to recommend passage on first reading on Bill 84-2026, incorporating any non-substantive revisions. So moved. Thank you. I have a motion made by Member Rollins-Fernandez and a second by Member Cook, sorry. Any further discussion? I love how quick this is going. Yes, go ahead, go.

Well, hello, Chair. Okay, so the motion that we're considering includes or does not include the recommendations from the Molokai Planning Commission?

I believe it does include... it includes...

I think I drafted it so that it...

It does, and I had to just look at James to double, triple check, but yes, he said yes.

Okay. I fully support the recommendations from the Molokai Planning Commission. I think, you know, learning from the past of, like, not having a cap, like with short-term rental homes, and then having to kind of do it by attrition to a zero cap in residential areas. And then for bed and breakfast, because it requires the home to be owner-occupied, So then the owner would live on the property that it was something that was supported by Molokai, although there's only one right now. And so this is the perfect time so that we're not affecting folks who may have made investments into their property to do B&B and then, you know, claw them back and, you know, do what we're doing to get it to a more appropriate level to preserve our housing inventory. And the other thing that we learned with the short-term rental home cap in other areas on Maui, for example, is that it didn't include density. So like in Paia, where entire neighborhoods, well, maybe not entire neighborhoods, but significant portion, many houses on one street, you know, were taken over by STRHs. And it it undermines and, you know, destroys basically the character of the community and, you know, that specific neighborhood. And that's what we saw on Molokai in Pukou area and I think like Wailua on the east end of our island. So in learning from that, I'm happy that the Molokai Planning Commission provided the density recommendations that they did, and mahalo to you all for supporting that. Mahalo, Chair.

Thank you, Member Rollins-Fernandez. Members, all those in favor, please raise your hand and say aye. Aye.

Chair, you have eight ayes, one excused. Committee Vice Chair Patangan.

Thank you. Moving on. Last item of the day, unless anybody needs a short recess. If not, I'm happy to continue. Okay, great, I see everybody saying no. Members, the last item on our agenda is Bill 37, to create a real property tax exemption for developers of qualified residential workforce housing developments. Assisting us today is Director Martin and Director, oh, Mitchell just left. I'd like to ask Council Chair Lee for any opening comments she may have before I ask Director Martin for her comment. Chair Lee? Chair Lee, your mic is off.

I recommend that we file this item because I did not get the support of the finance department for one. And what I'm actually trying to do is not create so much of a break for developers. What I was trying to do was not charge workforce housing owner occupants, new owner occupants, through no fault of their own, missed the deadline to file for an exemption. So in other words, They have to pay for, I think, non-owner occupied or some other high category. And it's not fair because it wasn't their fault. So I've been trying to figure out a way to do that. And I still need more time.

Okay, then I will go to testimony before we get into discussion, because I see your hand, Member Johnson, and then we can continue to discuss. I don't think we have Director Martin on the line, but we did get her letter if anybody wants to review it. So I see somebody's hand is ready to testify. If you have any testimony on Bill 37, you're welcome to go.

Chair, the only person we have signed up to testify right now is Keaupuni Kohawaiipai'aina.

All right.

Aloha. This is a representative of Keaupuni Kohawaiipai'aina, and I hope my testimony, like, I hope you guys is really taking this. I'm the only one that's testifying, okay? And I do not, I don't support anything for the developers, for real, because it's... our royal patented allodial title and the descendants of the royal patents and allodial titles have not been notified or either the beneficiaries of the crown lands have not been notified um because um the descendants and the beneficiaries to the crown lands are all the royal patent holders, descendants and all the royal patent holders anyway. And they have, we have not, none of the other Kanaka, all the Kanaka never been notified at all about any of these, any of these decisions. Um, and we, and, um, they really need to be notified and, um, Making decisions on Royal Patent to the Low-Yield Title lands are a violation on an international level. And the TMKs also are being illegally changed. So change the TMKs back to showing the Royal Patents and the Land Commission Awards in the legal information, which is illegally being changed. And them changing all their legal informations are all illegal because the royal patents supersede all of anybody's claims and exemptions, whatever. If any of the developers are over here getting exemptions, I don't think that's really fair because the first people that should be getting exemptions are the Kanaka people, which they are being frauded, literally frauded. Please correct me if I'm wrong. And yeah, that's a really great concern. And I request for you guys to call up all the Royal Patent beneficiaries of the Crown lands and the said lands to whoever owns that Royal Patented lands that is having, being made, you guys making decisions on top of them. Yeah. Because the Royal Patent holders' descendants are supposed to be making the decisions. And to let access to other Royal Patent descendants to the Royal Patented lands. It's Royal Patented Elodio titled. So, yeah. That's a really great concern. And I request you guys say something about it. at all like but because we literally are getting frotted and yeah the royal parson's are the true titles mahalo thank you members any clarifying questions seeing none next testifier so we have mr crowley sign up

Aloha Council, Tom Crowley. I heard the chair say that she'd like this filed and I understand her attempt, but I just want to point out that this is the larger issue that we were not able to resolve in the real property tax you know, committee that we put together, which is there is such a huge difference between what someone's property taxes would be at homeowner and what their taxes would be if they don't get homeowner. You know, it goes up by three times, sometimes even more than that. And particularly in this situation, this was the greatest frustration I had when I was chair of the Real Property Tax Appeal Board, that when some folks who were new, affordable homeowners came forward and said, hey, we had to be homeowners to buy these homes, right? But now you're treating us in taxes that were not. And we had to charge them, I don't know, in their case, it was $3,000 to $5,000 in tax that year that they didn't have, that these poor folks didn't have. So this was an attempt to kind of piecemeal the fundamental problem that we have, which is that The taxes sometimes are out of whack for as much as 18 months. When someone is a homeowner, they have met all the criteria, but because of our process, because we have a process that says you have to apply by this date and you have to have your tax returns done by this date and so forth, or if they just forget, they get tagged with this much, much higher taxes. This problem continues. We made a small fix to it, you know, with the late filing thing, but that really didn't fix the fundamental problem. So I just bring it up because I don't want this to get swept away and not addressed. This item, as chair recommends filing it, it doesn't address enough of it. It doesn't address the big picture, but I hope someone will pick it up and that we can address this. And you have the finance director there. with the cooperation of the finance department that we can come up with some solution to make the homeowner classification fit the use that's taking place at the time that they're paying the taxes. Thank you, Chair.

Thank you, Mr. Crowley. Members, any clarifying questions? Seeing none, thank you very much. Do we have anybody else signed up?

Chair, there is currently no one else who has signed up. Would you like me to issue a last call?

Please.

If somebody would like to testify in the chamber, please let staff know, or on Microsoft Teams, please raise your hand. This is the final call. Three, two, one. Chair, it appears that nobody wishes to testify.

Thank you, without objection, I will now close oral testimony. Thank you, written testimony will continue to be accepted. We do actually have Director Martin here, so I'm gonna let her speak. I would love to, if we have to, Chair Lee, I will follow somewhat of your recommendation, but I would prefer to defer it, because I actually fully support this concept, and I'm unwilling to give up on the conversation just yet.

but Director Martin. Thank you, Chair. So yes, the finance worked with the Raptor Committee and Chair Lee and staff in drafting this and we, made it in tandem with the program that already exists for our low income apartments. So they are afforded the exemption when they receive their restrictive covenants. So we know that we can implement this bill in a similar fashion by creating an exemption. And you know, when they do those affordable apartments, we do get advanced notice. So one way that would help us just be working on this is that as developers begin to create these affordable projects, that they let the Real Property Assessment Division know what they're doing, when they're doing it, and what land will be impacted by their covenants. So thank you. Okay.

Thank you. Chair Lee, did you have anything to add to that before I move on to Member Paltin and Member Johnson, who I saw they had their hand up earlier?

I just want to thank the finance department, Marcy and Carrie, for their cooperation and also Tom Crowley for encapsulating exactly what we were thinking and trying to do. Thank you.

Thank you. Member Paltin, you have any questions?

I was wondering, I know you said you're trying to model it after low-income affordable apartments, but I wanted to inquire about modeling it after Hawaiian homes. I think they're exempt for the first seven years, and if the issue is missing the deadline, What if they had it modeled after Hawaiian homes with a one-year exemption for any affordable housing under Residential Workforce Housing Policy 2.96?

Okay, so when we start with the Department of Hawaiian Homes, it starts as government property, so it starts as non-taxable. So when the new owner comes in for their seven years, already non-taxable. So in a way, this kind of does that. It kind of sets the benchmark of how the property starts before the new owner gets in. If that was the desire for the program, you can do it for the full year, which means that the new owner would get the benefit for their portion and the prior owner would get it for their portion. Which isn't really much, financially wouldn't be a big difference from what's being proposed because I think what's being proposed here was minimum tax for the developer. And the financial impact, calculated would be about $325,000 a year. So without that minimum tax, it would increase it by about 30,000, the financial impact.

And then I guess why did Terri say that you don't support this bill? Go ahead.

I didn't hear that. I must have been when I was walking. I think you were. Walking up. It's not that we don't support the bill. We are working on the half-year exemption right now, which is requiring... We're accepting the applications, but we have to do some... computer system modifications and staffing and all that. We are open to discussing this bill.

Oh, okay. I don't know if Chair Lee wanted to say something, but I'll yield. I don't know what's going on.

Okay, I do have Member Johnson waiting to speak, Chair Lee, but I can give you a quick minute to just address that comment and then I'll move on to Member Johnson.

Yeah, I think we must have had at least four or five different meetings together, separate meetings with finance. And they didn't like the timing of this bill. They didn't feel that they had the correct software to deal with it and that they were looking into it. And that's kind of where we left it.

but overall they were supportive but not now at this point thank you oh thank you that's much clearer okay thank you member johnson well yeah i guess that's where i was leading to and thank you chair lee for clarifying that thank you uh director uh martin for explaining that side i i think We do need cooperation with finance if we're going to do this, and I totally support policies that the department's on board with. If you're saying it's a staff issue, if you're saying it's a software issue, okay, well, let's work on that. I'm here to help the departments if that's what they're saying. I'm just curious, though, because it sounds like is it only us that deals with this problem? What about the other counties within the state? Do they all say you have to wait X amount of months and charge all this extra tax? I mean, or is it just us? I'm curious, what software are they're using? Can we look at other counties is what I'm saying. Maybe that's for Director Martin.

Director Martin.

Thank you, Council Member Johnson, for bringing attention to that. All four counties share the same software. We do so so that we gain the economic benefits and the resources. So this does exist for all of the counties. The difference really is that we should be proud of this, that the County of Maui does have a large benefit compared to some of the other counties for the home exemption. We have the larger exemption and the lower water occupied rate. But for example, for the half year, we are gonna implement the Big Islands software changes. That's why it helps to have us all on the same program. But the other counties do not, so what you're talking about really is assessing and billing on the day of acquisition. And so I'm not, even DMV assesses on the date that it was purchased year after year, they don't assess daily. So that is the problem, but I do agree that we can work with the other counties to see how we would address this. And in fact, I know that, Carrie has put this on the all county agenda to discuss with the other administrators. The problem does exist statewide, it's just because of our pricing is more.

the difference is significant like what mr crowe was mentioning so okay fair enough i i just think that you know we're pushing for more housing for our people and then they get this big chunky bill that sometimes that's just enough to wipe them off where they can't qualify i mean it's i really worry about those bills coming to the people's dinner table you know what i mean so um i guess uh Chair Lee, you went from filing to maybe deferring. I'm not sure, but if this bill is dead on arrival and we got to start from scratch, whatever, I just want anything I can do to help, anything we can do to make this go forward, I don't know the best path, but I'd like to hear from you.

Thank you. I think I'll leave it up to the chair of this committee. It sounds like there's enough interest in keeping this alive, and she's willing to take this on. That's super. That's terrific. The one point I want to make, and I've tried to make with the various departments, is that when we approve an affordable housing project, and we approve the various ranges. And we're saying you have to qualify income-wise and you have to be an owner-occupant, okay? All of that is done well in advance. Why can't the housing department notify the finance department that these are coming up and that they qualify for automatic exemptions? See, to me it's simple, but to them it's not. So God bless you, Nohe, and good luck to you.

Well, thanks, Chair. I was going to give you the opportunity to massage it, but we can continue to massage it.

Godspeed. I could do it too, whatever you want.

Thank you.

Yes? Oh, yeah, go ahead. Chair, thank you, and I'm gonna reiterate what Council Chair Lee has said, that that is an area that we can improve on, and I think if it's communicated to us in advance, just like we did with the deed-restricted properties, right? If we know that something's deed-restricted, we can already be, you know, massaging the value to where it should be. So advanced notification, we would be happy to receive advanced notification and we would do our best to value it as it should be given the type of use that it is. So thank you for bringing that up. Thank you.

I have one quick question and then I see Member Rollins hand is up. When do you think this software that you need is going to be available? The software that's been referenced in discussion.

So, okay, the updates for the half-year exemption, we hope to get it in time so that the people who are applying right now can get it when it's due. If we can't, we think we can manually make that work. But as far as... billing and valuing real property daily um i'm not it's not just a software pro okay it's uh also a um systematic kind of notification and a very large um code change so okay we'll we'll continue to work with you then thank you very much remember rollins fernandez i saw you had your hand up

Hello Chair and Aloha Director Martin. Mahalo for your comments. So the bill that I introduced and was passed unanimously by this council to adjust the valuation of a property based on the deed restriction that caps its resale value could apply now to the new housing projects so we and because the county holds would hold the deed restriction to that and enforce it so we would just transmit to real property tax division the houses that would be price capped via deed restriction and then their the valuation would be adjusted and not only would it provide that more appropriate property tax to the future owner, but would also limit the carrying cost to the developer so there isn't as, yeah, the carrying cost to developer as well.

Please, thank you.

Yes, it would be a similar process, but it would be the county instead of the land trust type applicants.

So we can already do this? We don't need additional legislation to do that? Yes.

Okay, mahalo, Director. Mahalo, Chair. Of course. Any other discussion? I'm going to defer this at the request of Chair Lee and continue to work on it with finance and get housing involved in this conversation as well. So any objection to deferring this item? Seeing none. No objection. It is deferred. All right, members, this concludes the HOU meeting for today. Before this meeting ends, though, I would like to wish my husband a happy anniversary and my cousin Casey a happy birthday. I will tell my husband that it is our ninth year, so it either is pottery or leather, so I guess a new Le Creuset pot or a nice purse is accepted. Just joking. Happy anniversary. Thank you. I appreciate that. Thank you. He is a sweetheart. I won the lottery with that one, so I guess I shouldn't ask for anything else. At this time, it is 11.09 a.m., and this HLU meeting is adjourned. See you folks later. Bye.