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Housing staff: County’s in-lieu fee likely too low to produce required units
Summary
Department staff told the Housing Advisory Board that the current in-lieu fee, set as the cost difference between specified AMI-priced units, often does not cover the actual cost to build replacement workforce housing, undermining the statute’s production goal.
Department staff told the Housing Advisory Board that the in-lieu fee established in Chapter 2.96 is likely inadequate to meet the statute’s intent to produce additional affordable housing. Deputy Director Saumalu Mataʻafa and Director Richard E. Mitchell said the fee is calculated as "the difference in unit costs for a three bedroom, single-family dwelling unit, at one hundred percent and a three bedroom, single-family dwelling unit at one hundred sixty percent of (the area) median income," but in practice the revenues collected rarely cover construction costs.
Mitchell said the County has reviewed a prior project where many workforce units were ultimately sold at market rate and "the fees paid by the developer did not even equal the cost to develop one single family home" for the units lost to market sales. Board members asked staff for comparisons or minimum square-foot guidelines to better estimate unit cost; Member William Curtis suggested specifying a minimum square footage (960–1,000 sq ft) for a typical three-bedroom unit to improve cost calculations.
