STAR-BULLETIN / 1998 The building of schools and libraries doesn’t always keep pace with home construction. A patch of red dirt, at top of photo, shows the preparation to expand Mililani Mauka last year.
Infrastructure
-- who pays?
Our taxes pay to maintain schools and build new ones, but when Castle & Cooke asked the Land Use Commission to approve a big new subdivision, it was told to build a school and pay for it, too. The Price of Paradise wondered, is this new policy arbitrary or is it fair and legal? Even if it's legal, does it make sense?Approvals can be shell game | Empty libraries, schools, heads
The Price of Paradise appears each week in the Sunday Insight section. The mission of POP is to contribute lively and informed dialog about public issues, particularly those having to do with our pocketbooks. Reader responses will appear in Thursday's paper. If you have thoughts to share about today's POP articles, please send them, with your name and daytime phone number, to pop@starbulletin.com, or write to Price of Paradise, Honolulu Star-Bulletin, 7 Waterfront Plaza, Suite 210, 500 Ala Moana, Honolulu, HI 96813.
John Flanagan
Contributing EditorBACK TO TOP
|
CASTLE & Cooke wants to build more houses in Central Oahu and recently applied to the Land Use Commission to build 3,237 homes on 763 acres of land. The LUC said sure, but we want you to build some schools. City development approval
can be a shell gameBy Don Clegg
Understandably, Castle & Cooke was upset. Building schools costs a lot of money. It also knows full well that the LUC is only the first of the many trolls that will want to exact a toll before letting it proceed along the road to build and sell houses. There are other state agencies, the mayor, city agencies and the hungriest troll of them all -- the City Council.
It also knows that the road is not smooth or straight. It will have to negotiate around neighborhood boards, community associations, activists of all kinds, neighboring residents, the Planning Commission and even the federal government.
ALL OF THIS costs a lot of money, but why should Castle & Cooke care? It won't pay these costs. The people who buy the houses will pay because, of course, Castle & Cooke will merely pass the bill to the new homeowners.
Well, Castle & Cooke does care. It wants to make as much profit as it can and still stay price competitive. However, this does raise an interesting question: Who should pay for the school and all the other community facilities that will be needed for these new homeowners?
The zoning buzzword is "rational nexus," or reasonable connection. If the construction of the project creates the need for a public service or facility, then there is a rational nexus justification to charge the project developer to build it.
Government has a legal right to take an action, but does that mean government should take that action?
IF THE government pays for the facilities, then all taxpayers foot the bill for the new homeowners. The homeowners say to the taxpayers, "That's true, but years ago someone else paid for your schools and I have been paying taxes for other people's schools. So why should I be singled out to pay for both other people's schools and mine?" A good point!
Too often, however, our local government has not applied the rational nexus test to its actions. The city has a cute thing called a Unilateral Agreement. This is an agreement that a developer makes with himself to pay for services and facilities that the City Council wants him to provide in return for approval.
It sounds like a great way to cut the cost of government, but alas, it's a shell game. The pea has not disappeared, it's just under a different cup.
For example, for years UAs, as they are known, have required developers to provide up to 30 per cent of their units as affordable housing. These are not necessarily less expensive houses but market houses sold at below-market prices. This means that those who buy the market-priced houses pay more and subsidize the community's need for affordable housing.
There is no rational nexus here. Building a market-priced housing project does not create the need for affordable houses. Personally, I think it's illegal, but no one has ever taken the city to court. This doesn't mean we don't need affordable housing. This just isn't the way to pay for it.
Is there a price for paradise? Of course, but you pay a price even if you don't live in paradise. Given the options, I'm staying with paradise.
Don Clegg is president and owner of Analytical Planning Consultants Inc., a land use and planning company. He formerly was the director of the Department of Land Utilization and the planning director for the City and County of Honolulu. BACK TO TOP
|
STAR-BULLETIN / 1998 A new classroom awaited students at Mililani-Mauka Middle School in 1998. STATE GOVERNMENT has found a new way to stimulate Hawaii's economy: build empty buildings. Empty libraries, empty
schools, empty headsBy Nicholas Ordway
The state's second-largest public library may open as early as December 2003 in Kapolei, but no money was appropriated for books. There is a plan by the state Land Use Commission to require schools to be built even if they will not be staffed and will remain empty for years. Empty libraries and schools create problems.
On June 20, the Star-Bulletin reported that the LUC wants Castle & Cooke to build schools before any houses in its proposed Mililani subdivision are occupied. The Koa Ridge subdivision will have 3,237 housing units offered for sale starting in 2007.
It also was reported that the Department of Education estimates that in that year there will be net excess space for 1,019 students in Mililani's elementary and middle schools. Mililani High School, however, will be overcrowded with an excess of 277 students.
It could be years before the empty elementary schools required by the LUC are even used.
PROBLEM No. 1: Requiring unnecessary front-loading of infrastructure on a large real estate project before revenues can be received is a prescription for bankruptcy.
This bitter lesson was learned by the U.S. Department of Housing and Urban Development. Under the 1968 New Communities Act, it provided funds for 13 "new towns." All but one of these projects went belly-up.
One of the biggest reasons for the failures was the up-front construction of too much infrastructure, including schools and libraries, before it was needed. Proper timing and coordination of expenditures and revenue is the key to development success.
Reasons for this are explained in Berkeley Professor Wallace F. Smith's book "Urban Development" (1970).
PROBLEM No. 2: The LUC's policy may not meet the "rational nexus" test of the U.S. Supreme Court's Nollan vs. California Coastal Commission (1987) and the "proportionality" test of Dolan vs. City of Tigard (1994).
It's not clear that the LUC complied with the decision-making criteria required by law. State law requires the LUC to consider the Hawaii state plan and the adopted functional plans as well as provisions for housing opportunities for all income groups.
The ad hoc nature of the LUC's action suggests it failed to do this. Empty schools increase housing costs and do not immediately and directly benefit the housing development.
Many books by University of Hawaii Professor David Callies provide the most authoritative advice on the appli- cation of the Nollan-Dolan rules. Particularly useful is his "Preserving Paradise: Why Regulation Won't Work" (1994), which should be read by everybody who is concerned about doing what is constitutionally right.
PROBLEM No. 3: The LUC appears to be at odds with the DOE.
Instead of requiring the developers to pay school impact fees to the DOE so it can use the money to build new schools at the right time and place, the LUC is making the developer build the schools before there is a need.
Providing the DOE with additional schools to staff at a time when it is forecasting excess capacity and having difficulty meeting its other financial responsibilities is working at cross-purposes.
Perhaps the real issue is that the LUC doesn't trust the DOE to spend the money correctly. Leadership is required to overcome this lack of trust. A book the LUC should find time to read is Kenneth H. Blanchard's "The One-Minute Manager" (1983).
Many future financial flops and regulatory planning disasters can be avoided by learning the lessons of the past. One of the best storehouses of knowledge about past experiences may be found in books available at the public library.
Oh, I forgot -- no books.
Nicholas Ordway is Hawaii Chairman of Real Estate and a professor at the University of Hawaii College of Business Administration.
