BOE OKs school impact fee zone along rail in town

To accommodate an estimated 10,000 students expected to enroll in urban Honolulu schools as development swells along the city’s rail route, the Board of Education on Tuesday unanimously approved establishing a so-called school impact fee district from Kalihi to Ala Moana.

But unlike previous proposals that included fee amounts, the board voted only to establish the district and did not consider how much homebuilders will be charged for units built in the new zone. Previously proposed amounts — which ranged from $5,858 to $9,374 per unit — had proved controversial among advocates for affordable housing, including city officials.

Some board members had also questioned the legality of imposing a one-size-fits-all fee across a diverse district, where fees collected in Kakaako might be used for schools in Kalihi.

A 2007 state law authorizes the department to collect fees from developers in high-growth areas of the state to offset the cost of building new schools. The law requires both a construction fee and either a contribution of land or a fee in lieu of land for every new unit. The land or fees charged are supposed to be based on each new development’s proportionate share of the additional demand on public-school facilities.

The Department of Education was told by the Attorney General’s Office that when the department simultaneously sought approval of proposed fee amounts and designation of the district’s boundaries, it did not follow the process laid out in the law, according to Dann Carlson, assistant superintendent for school facilities.

“It’s the same district that we went out to public hearing already on. We’re just taking the fee part of this out of the discussion now,” Carlson said Tuesday. “The AG came back and recommended that the first step that we should have been doing all along is getting board approval to establish the boundaries of the district. From there we will reassess the fees and continue to work with stakeholders and the AG.”

The relevant part of the law says, “Upon designation of a school impact district, the department shall prepare an impact fee analysis.”

The BOE 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 DOE has so far collected roughly $800,000 in fees in Leeward Oahu and about $2 million on Maui.

The new Kalihi-to-Ala Moana district will run along a 4-mile stretch of the rail line, from the Middle Street rail station in Kalihi through downtown and Kakaako, and end near Ala Moana Center. Residential development in the Kalihi-to-Ala Moana area is expected to add some 38,700 new housing units, according to a DOE analysis, with about one-fifth for affordable or low-income housing.

The 13 existing schools serving the area can handle only about 1,500 to 1,750 more students. The DOE anticipates it will need to build up to six new elementary schools and 1-1/2 middle and 1-1/2 high schools to accommodate the growth, at a cost of about $750 million.

BOE member Bruce Voss voted in favor of the district but said that if the subsequent fee is anywhere near the $9,000-per-unit amount previously proposed, it will stifle affordable-housing ­development.

“I think this law was passed with the best of intentions … but there will ­almost certainly be unintended consequences,” Voss said. “This impact fee, if it’s enacted in the $9,000 or $10,000 range, will have the most unfortunate effect of killing off affordable-housing opportunities for our most needy, including, by the way, some of the parents of our students.”

He added, “The fact is that equity and excellence in our public school facilities is going to require hundreds and hundreds of millions of dollars in taxpayer commitments. We are kidding ourselves to pretend that this impact fee is going to make any material difference in that.”

Under the previously proposed impact fee of $9,374 per unit, the department ­estimated it could collect $365 million over the next 20 to 30 years to help pay for new schools.

Corey Rosenlee, president of the Hawaii State Teachers Association, testified in support of the impact-fee district. Having previously taught at Campbell High School, the state’s largest high school, Rosenlee said he’s seen firsthand the consequences of failing to properly plan for population increases. Campbell and other area school campuses are bursting at the seams.

Rosenlee said that while school impact fees have been collected in recent years in West Oahu, “think about how many houses and developments went up before we starting collecting that money. If only we had foresight to know that all these new houses would require more schools and that we would need the money to be able to build these schools.”

“The same thing is going to happen with Kaka­ako-to-Ala Moana school districts, where the rail will be increasing the amount of residents living in that area,” he added. “Given the length of time needed to build new school facilities, the continuous collection of impact fees over time will make ongoing construction more ­manageable.”