KEY FINDINGS

allowing identification of underlying structural issues that are thematic and applicable to other sites.

Waipahu was the site chosen as part of a larger study for the UH Community Design Center for several reasons. The Waipahu station has the potential to be developed more quickly than some of the other early rail stations based on market conditions around the station, the amount of infrastructure funding required, and the number of landowners who need to collaborate. Timely TOD site plan implementation is key for the public to see the value of the rail and to support its development. The hope is that a successful project would generate public support for TOD plans that have been overshadowed by controversy associated with the Honolulu rail project.

This study used the Waipahu station site to draw some larger lessons for TOD implementation by identifying barriers to agency collaboration and progress towards development.

METHODS

This project was completed by Colin Moore, Kenna Stormogipson, and Joy Agner from the University of Hawaiʻi at Mānoa’s Public Policy Center. Methods included attending TOD Council meetings from February 2018 - October 2018, attending HHFDC board meetings, talking to local housing developers and Waipahu area elected representatives, and interviewing key agency stakeholders for the Waipahu site. The following agencies were invited to participate in the study: Hawaiʻi Public Housing Authority (HPHA), Department of Education (DOE), Hawaiʻi Housing Finance and Development Corporation (HHFDC), Department of Accounting and General Services (DAGS), Office of Planning (OP), and the City and County of Honolulu TOD Program. Descriptions of key organizations, and interview findings that extend beyond the scope of the main report can be found in Appendix II. For best practices comparison, we also attended the 2018 RailVolution Conference in Pittsburgh, Pennsylvania and interviewed TOD staff from other cities including Los Angeles, Denver, Seattle, Charlotte and Minneapolis. To better understand the CIP funding process and its relationship with TOD prioritization, we examined support for TOD funding priority requests in each stage of the CIP funding process.

1.1 TOD Council members agree on the importance of TOD and are willing to collaborate.

We found widespread agreement that Transit Oriented Development is an important tool for the state to address housing shortage and to create livable communities. Council members understand the value of TOD goals and how they relate to their organization, even if the main mission of their agency is not related to housing. For example, the Department of Education supports TOD principles of denser and more mixed-use development because it can lead to teacher and staff housing on school properties. The benefits and goals of TOD are clear to all government stakeholders, but what is less clear is how to best achieve those goals through the TOD Council.

TOD SUCCESS STORY: POHUKAINA ELEMENTARY SCHOOL

The Pohukaina Elementary School Project is an example of TOD principles and agency collaboration add value to a project. It is a partnership with DOE and HHFDC to build housing on lands originally set aside for a school, which will now result in over 400 new affordable homes. 690 Pohokaina Street is located a few blocks from a planned train station and is in a very desirable neighborhood. These dynamics prompted discussions about making best use of the land and incorporating TOD concepts of higher density and mixeduse.

DOE adopted a vertical design which provides more land for housing. DOE then collaborated

with HHFDC, combining DOEʻs knowledge of educational needs with the tools and expertise of HHFDC to develop 690 Pohukaina into a school with mixed-income housing. The 10-story school will be an innovative educational land use model for the state and is integrated into a forward-thinking TOD development plan.

This partnership between DOE and HHFDC will result in 590 units of housing, 74% of which are affordable at various levels of area median income (AMI) but not exceeding 140% AMI. Over 430 residents will now have access to affordable homes, close to a rail station and downtown jobs. Some of those residents will likely be teachers and parents of students at the elementary school next door. Additionally, a county owned park across the street will serve a dual purpose as both a public park and an elementary school play area. Enormous public benefit is being created through this collaborative effort between state agencies and the county.

TOD SUCCESS STORY: MAYOR WRIGHT HOMES, A PUBLIC-PRIVATE PARTNERSHIP

An excellent example of a higher density, mixed-income, TOD is the Mayor Wright project in Kapalama. Located a few blocks from the planned Iwilei station in downtown Honolulu, Mayor Wright currently provides public housing for 364 low income families. The Mayor Wright redevelopment project will provide one-for-one replacement of the existing 364 public housing units, and over 2,000 units of new housing stock at mixed income levels ranging from to 30% AMI to market rate. The phased redevelopment has a total projected cost of approximately $1.5 billion dollars, which positions it as one of the largest public housing undertakings in Hawai‘i’s history.

Mayor Wright shows how a public-private partnership can effectively create affordable housing solutions. Under this model, the public sector provides land, zoning incentives (height and density), public housing expertise and a portion of the financing, while the private sector provides planning, implementation and most of the financing.

A HIGH IMPACT, HIGH COMPLEXITY PROJECT

The Mayor Wright Homes Project is a massive undertaking. As a public-private partnership seeking federal funding, the redevelopment effort is significantly more complex than a comparable private sector project. The development must conform to strict state and federal regulations guiding environmental review and the HUD approval process. Additionally, existing residents must be relocated, the current building demolished, and the State legislature must approve financing for the project. Beyond the redevelopment site itself, Mayor Wright Homes will require support from the City and County of Honolulu for infrastructure upgrades to accommodate approximately 2,000 more units. Steering a project of this magnitude through city, state and federal review processes will be a complex task with a 10 - 15 year timeframe.

1.2 Agencies collaborate when there are structured discussions and adequate incentives.

There is enough trust and understanding between TOD stakeholders that, under the right conditions, some very productive conversations emerge. For example, at a structured planning discussion called a “charrette” last fall, agencies and private landowners found ways to add value to the UH West Oahu TOD area by leveraging their strengths. For example, some private landowners in the area were receptive to fewer freeway lanes in exchange for a well-designed and less car-dependent TOD neighborhood. In separate but related conversations, the University of Hawaiʻi is exploring how it could partner with HHFDC to build more staff and student housing on UH property.

1.3 TOD Council has strengthened relationships and inspired collaborative

discussions.

Council meetings have spurred efforts to develop ideas and potential agency collaborations outside of TOD meetings. Some stakeholders have begun meeting separately in order to identify strategies to work together. These relationships help break down silos and enhance effective communication across agencies. Without regular council meetings, there would be fewer incentives for inter-agency discussions.

2.1 The council has made planning for TOD areas more efficient; the current infrastructure plan for the rail corridor is one example.

A central reason for the creation of the TOD Council was to create efficiencies in the planning process. The current infrastructure plan being conducted on state lands along the Honolulu Rail Transit corridor is an important investment, which might not have occurred without the council. Even though the request for $1 million to fund the plan came from the Office of Planning, having a TOD Council already in place made the request more compelling and relevant. Creating an infrastructure plan is critical to any large development process, and yet most agencies would not have had the funds to create these plans for their parcels of land. Even if they did have the funds as an individual agency, it would be significantly more expensive for each agency to fund its own plan.

Each agency will acquire critical information about what infrastructure is needed and potential ways to finance the improvements. Also, the needs and plans of various agencies for a particular station area will be compiled into one plan, which allows for important efficiencies and opportunities regarding future development. One agency can more easily adjust its plans to take advantage of other proposals for an area. For example, if the DOE is planning on building an elementary school in an area, HPHA might decide to design an affordable rental property geared towards families with young kids who will place the highest value on proximity to the school. Or perhaps school staff can share parking with apartment tenants who need overnight parking, but not daytime access. Once information is organized and discussed, it is much easier to find connections and add value. In short, the TOD Council can lead to more efficient outcomes by agencies because they can see how their individual needs fit into an overall site plan.

3.1 The role of TOD Council in implementation is unclear.

While some council members felt that important progress towards TOD had been made, others were skeptical that the TOD Council was accelerating development efforts. Sharing information across agencies is useful, but it is not enough to implement a development plan. Ultimately the TOD Council does not have the authority or funding to address many of the obstacles impending development. In its current structure, the TOD Council is more of a public forum than a space for inter-agency collaboration and negotiation.

For example, development in the Iwilei-Kapalama area is estimated to require $700 - $900 million worth of infrastructure investments over several decades. The TOD Council does not have the authority to appropriate funds or to facilitate funding negotiations between stakeholders, so council members must wait for another authority, such as the Honolulu City Council or the Hawaiʻi State Legislature, to assist with implementation.

4.1 The council incentive structure requires modification to align agency interests with TOD priorities and for consensus to be built.

As an advisory group, the TOD Council cannot dictate how agencies use their resources or mandate that TOD become a priority for individual agencies. Instead, the council most often supports agency interests that already coincide with TOD goals, as opposed to shaping agency priorities towards TOD.

In addition, the diversity of agencies represented, ranging from DOE to HPHA, presents a challenge to

building consensus when representatives on the TOD Council hold different levels of authority within their organizations. For example, the Director of HHFDC and the administrator of the county TOD program often attend council meetings, but the DOE is such a large department that the Assistant Superintendent of Facilities almost never attends. Although this makes sense from the agency’s perspective, the designee for some agencies may not have the authority to approve a TOD Council action plan or recommendation. Without the right people involved, decisions that could be made in one meeting must wait to go up the chain of command. This delays decision-making and makes collaboration more difficult.

5.1 The state and the county both play important and interconnected roles in TOD.

The City and County of Honolulu and the State of Hawaiʻi both have important oversight and stewardship roles in the development process. For example, all construction permits are granted and finalized by the County Department of Planning and Permitting, even if a property is on state land or is under the jurisdiction of a state agency. Likewise, the environmental review process is determined by a state agency, the Office of Environmental Quality Control (OEQC) for all projects in the state.

A slowdown or impediment in one jurisdiction affects outcomes for both. The table below shows some of the division of authority between jurisdictions

Development Process

Permitting

City

Construction permits approved by the Department of Planning & Permitting.

Design Review / Entitlements Responsible for lands not under State jurisdiction.

Infrastructure Infrastructure Operations. Manages county roads, drainage, water and sewer.

State

Sets standards for environmental review through the Office of Environmental Quality Control.

Responsible for HCDA controlled lands, and some projects on State lands. Manages State roads. Sometimes funds county infrastructure in special cases.

This table illustrates how important both state and county authority are to any large new development. In fact, it is not possible to go through most large projects without being impacted by both state and county land use regulations.

5.2 Paying for infrastructure: County or State? Both benefit from new development.

The counties are increasingly looking to the state for help with financing infrastructure, especially infrastructure on state properties. The state has a much larger budget than the counties and there is precedent for funding infrastructure. Recently, the state provided significant funds to rebuild county roads and utilities on Kauaʻi and Hawaiʻi Island after natural disasters in 2018. State investments in infrastructure have also supported housing development as was the case with the Kakaʻako neighborhood. In the late 1970s Kakaʻako was a blighted area and needed costly infrastructure improvements to attract development. The state asserted zoning control of Kakaʻako and appropriated tens of millions of dollars for infrastructure.

Regardless of which jurisdiction funds infrastructure improvements, both benefit financially and

politically from development that meets TOD goals. New development increases the property tax base for the counties, which adds to their revenues, while increased commercial activity in a neighborhood generates more general excise tax (GET) for the state. Both jurisdictions are viewed more favorably by the public when projects are completed, affordable housing is built, and vibrant communities are created.

5.3 State and county are landowners in TOD areas, but the state owns the most land.

Although the county and state both own land in station areas, the state is the largest landowner along the Honolulu Rail Transit corridor. Over 1900 acres, or 30% of the total land area, is controlled by the state. Yet the state lands belong to many different agencies such as: HHFDC, DOE, HPHA, DAGS, DLNR, etc. Any development plan for a station area depends on the support of local landowners and often these landowners are state and county agencies.

6.1 The current Capital Improvement Project (CIP) funding structure does not incentivize collaboration.

State CIP funding is the primary funding mechanism for TOD Council projects; however, the current CIP process does not emphasize the role or authority of the TOD Council. The council prioritizes CIP requests for the legislature, but it is not clear that TOD requests are given any more weight than regular department requests. Additionally, council CIP recommendations are submitted after the departments and the governor have determined funding priorities. Consequently, the council functions more like a stamp of approval rather than a process for rewarding collaborative efforts.

For example, if agencies were instructed to come up with a plan to best utilize $50 million to advance TOD goals, they would be motivated to negotiate a plan with the highest benefit for all stakeholders. However, if the $50 million is simply divided between individual agency requests that happen to coincide with TOD priorities, it would not incentivize collaboration. The current funding structure

rewards individual department requests, but not collaborative efforts.

As the graphic below demonstrates, CIP funding is not straightforward, and it is hard to determine the influence of TOD Council requests on funding outcomes.

6.2 Advantages of TOD approved CIP requests vs. other agency requests is unclear.

CIP Funding Process and Timeline Illustrated with Three TOD Council Priorities

Example 1: $1M for OCCC Consulting Services(2017) Agency Request

Public Safety Dept. 1,500,000 November

Budget & Finance Recommendation

0

Governor Recommendation

0 January

TOD Priorities Released

1,000,000 June

Legislative Decision

10,000,000

Example 2: $55M for Pohukaina Elementary School (2017)

Example 3: $17M for Alder Street Affordable Housing and Juvenile Services (2017)

Department of Education 0

Dept. of Business, Economic Development, and Tourism 15,000,000 0

15,000,000 60,000,000

15,000,000 55,000,000

17,000,000 10,000,000

0