The Department of Education wants to start levying what it calls its only taxing power to generate funding for new schools in urban Honolulu, where officials anticipate population spikes will require several new campuses along the city’s rail line.
The department has proposed establishing a so-called school impact fee district along a 4-mile stretch of the rail line, from Kalihi through downtown and Kakaako to Ala Moana. Under the plan, builders or buyers of new homes within the district would be assessed about $9,000 per unit to help offset the cost of providing new or expanded public schools.
A DOE analysis of the proposed district estimates future residential development near rail stations will bring with it an additional 8,500 public school students, far exceeding capacity in the 13 existing schools serving the 4-mile stretch. The department anticipates needing up to six new elementary schools and at least one middle or high school to accommodate the growth over the next couple of decades.
To help pay for new facilities, the department is looking to a 2007 state law that authorizes the DOE to collect fees from developers in high-growth areas of the state. The Board of Education in 2009 approved a West Hawaii school impact fee district on Hawaii island; a Central Maui and West Maui district in 2010; and a Leeward Oahu district in 2012.
The proposed Kalihi-to-Ala Moana district will be considered at the board’s Nov. 15 meeting. The law requires public hearings be held before a district can be approved.
“We’re doing this because the DOE is looking more than 30 years into the future,” Heidi Meeker, a planner with the Department of Education, said at a Wednesday public hearing on the proposal at Farrington High School. “We expect tremendous growth of population in urban Honolulu that will be focused on the areas near the train stations.”
She added: “The DOE gets all its money to build schools from the state Legislature; there’s no property tax that’s going to building of schools. This is the only taxing power that DOE has.”
The law requires both a construction fee and either contribution of land or a fee in lieu of land for every new unit. The fees are paid before a project receives a building permit or it can be paid by homebuyers at the closing of individual unit sales. A developer can opt to build a school instead of paying the fees.
The land or fees charged are based on each new development’s proportionate share of the additional demand on public school facilities.
“The law allows us to charge all new developers for 100 percent of our future land needs, and for 10 percent of school construction money needed to house the additional students,” Meeker said. “The other 90 percent of construction money will have to come from all taxpayers through the Legislature.
“Because the law is complicated and detailed, I’m going to put the DOE proposal as simply and as directly as possible: The DOE is proposing a $9,374 fee for every new apartment built along the rail line from Kalihi to Ala Moana,” Meeker continued. “If an apartment project provides DOE with school land or facilities, then the fee amount is $584 a unit.”
Lawmakers earlier this year amended the school impact fee law to give the Department of Education more flexibility in how it spends collected fees. Given the limited availability of vacant land in the proposed urban district, the law now allows the department to use fees to lease space or purchase finished space in a building.
Although no developers testified at Wednesday’s hearing, the city agency that would need to work with the DOE if the proposal advances said it opposes the plan.
Kathy Sokugawa, acting deputy director of the city’s Department of Planning and Permitting, said that while the department supports the use of impact fees, it opposes the proposed Kalihi- to-Ala Moana district because it would discourage development of affordable housing.
“We recognize and accept the DOE is strapped with huge challenges to fix our schools as well as in providing for our future schoolchildren,” Sokugawa said at Wednesday’s hearing. “We represent the transit-oriented development program … and one of the big things we hear from the Legislature and the City Council as recently as last night is, ‘Where is the affordable housing?’”
Sokugawa said that Honolulu Mayor Kirk Caldwell recently enacted an ordinance to waive as much as about $10,000 in fees associated with applying for permits to create second or accessory dwellings as rentals.
“And it’s about the same amount that’s being proposed by this impact fee,” she said. “So where we push this idea to reduce the fees to enhance affordable housing, especially next to the train stations and for young families … this is going to dampen the development potential for that segment of our population.”
Dann Carlson, the DOE’s assistant superintendent for school facilities, said the impact fees are designed to “place the burden on the people that are putting the impact on our future schools.”
“That isn’t something we can deny,” Carlson said of the potential for school impact fees to negatively affect affordable housing developments. “But, from the DOE’s perspective, we need to do it smart. We’re trying to be good stewards of the money we receive. Instead of putting the impact across the entire state and making everyone in the state (pay), we’re placing the impact where it should be.”
A second public hearing is scheduled from 5 to 7 p.m. today in McKinley High School’s Hirata Lecture Hall.
