Terrance Ware Manager, Transit-Oriented Development City & County of Honolulu

Transcription

1 Strategies for Implementing Transit-Oriented Development Terrance Ware Manager, Transit-Oriented Development City & County of Honolulu Mixed-use Neighborhood Transit Center Walking distance One mile grid (1.6km) 10 min walk 1/2 mile radius (800m) 5 min walk ¼ mile radius (400m)

2 Honolulu Population Density and Distribution Oahu 603 square miles 953,207 population.25 % developable land area 80% of population location in the primary urban cooridor

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7 Rail Corridor Population Density

8 Honolulu High Capacity Transit Corridor Project

9 Plan Areas & Special Districts

10 Honolulu Real Estate Market Construction Costs New real estate development in Honolulu is challenged by high construction costs which result from: Strong labor unions and associated high cost of labor High cost of land Premium cost of materials which usually must be imported Hawaii does not have plentiful natural resources that are generally used in traditional building materials Other factors Expectation that developers pay for infrastructure upgrades Length of time required for permit and entitlement review timeline Zoning considerations (i.e. green space and parking requirements) Sources: Hawaii Housing Organization / University of Hawaii Economic Research Organization 10

11 Honolulu Real Estate Overview - Construction Costs Source: Rider Levitt Bucknall

12 Market Summary Honolulu Commercial Property and Condo Market Key Performance Indicators Vacancy Rents/Sale Prices New Supply Comment Multi-Family Apartment Unchanged The multi-family market has fared better than other commercial property markets, but vacancies continue to inch up albeit slightly Multi-Family Condo N/A The condo market is primarily concentrated in Wakiki, Ala Moana and Downtown. Like the rest of the country, sales prices have dipped slightly. Office Unchanged The office market is one of the weakest property types in Honolulu. Retail Despite steadily rising vacancy rates in some areas, retail continues to perform well overall and new supply continues to come on-line especially in the Pearl City Aiea area.

13 TOD Implementation Incorporates Livability Benefit Concepts Downtown & Neighborhood Rejuvenation Metropolitan Sustainability & VMT Reduction Social Equity for Jobs & Housing 1. Route Alignment 2. Station Location 3. Station Area 4. Land Assemblage 5. Infrastructure 6. Vertical Development 7. Livability Benefits Economic Growth with Environmental Quality

14 Proposed Approaches Strategic public investment identify and invest in strong markets and use returns to invest in emerging markets (Community + Market based approach) Develop tax policies that capture value region-wide for site specific investment Assessment District, Tax Increment Financing, Tax Rebates, Impact Fees & Joint Development Agreements Utilize public programs such as the Clean Water and Natural Lands; Affordable Housing Fund; CDBG and CIP to strategically invest and leverage foundation and private dollars

15 Breaking the Cycle of Unintended Consequences in Transit-Rich Neighborhoods

16 TOD Coordination between the public agency and private development is difficult because of the differing timeframes TOD Coordination

17 TOD Performance Criteria Efficient Regional Land-use Patterns Location efficiency Value recapture Livability Financial return Choice

18 Neighborhood Oriented Regional Retail Greenfield Educational Military Functional Designation Employment Tourism

19 Public Investment / Value Capture Tools Public Investment Does Not Make a Bad Project Good; Instead Investment Should Make Good Projects Better Up Front Investments - Pay as you Go Creates much needed capital to pay for infrastructure and other horizontal costs Incentive Based Useful in Geographically Weak Real Estate Markets such as Waipahu Tax Increment Financing ( Up Front or Pay as You Go ) Real Property Tax Abatement (Can be Up Front if securitized by Developer / Lender) Fee Based Well Suited for Geographically Strong Real Estate Markets such as Ala Moana in 2007 Assessment Districts (Typically Up Front ) Impact Fees (Typically Pay as Go ) Business Improvement Districts Incentive and Fee Based Tools Can (and usually are) Used In Concert with Development Agreements

20 Value Capture District (s)

21 Transit Economic & Financial Study conducted by Jones Lang LaSalle

22 Effectively Deploying Value Capture Resources Priority Analysis Strong Market Forces (Rents, Vacancies, etc) Indirect Fee Based Indirect Incentive Based Direct Weak Low Priority City s Station Area Vision / Strategy (i.e. Affordable Housing, Regional Retail, Employment, Medical etc.) High Priority

23 Project IRR Sensitivity - Residential Parking Space Ratio 60.00% 50.00% 40.00% 48.23% 43.89% 42.03% 38.17% 30.00% 23.08% 24.34% 20.00% 10.00% 15.51% 13.60% 6.04% 4.32% 6.38% 6.95% 17.46% 18.67% 16.23% 17.01% 10.17% 10.94% 7.98% 9.56% 0.00% % Ho 'opili -0.58% West Loch 0.09% Pearlridge Kapalama -1.40% Iw ilei 0.31% Ala Moana Project IRR - 1 space / unit, with Affordable Housing Project IRR - 1 space / unit, without Affordable Housing Project IRR - 2 spaces / unit, with Affordable Housing Project IRR - 2 spaces / unit, without Affordable Housing

24 High Capacity UH West Oahu Ho opili East Kapolei Land Opportunity Long-term Development Aloha Stadium Leeward Community College Kalihi Static Market Lagoon Drive Middle Street West Loch Short-term Development Pearlridge Waipahu Iwilei Ala Moana Emerging Market Pearl City Low Capacity Pearl Harbor Airport Chinatown Kapalama Downtown Low Activity Market High Activity

25 Catalyze Market Driven TOD Tier 1 Tier 2 Tier 4 Tier 3 Directing Neighborhood Change Tier 1 Tier 2 Tier 3 Tier 4 Pearl Ridge Ala Moana Ho opili Downtown East Kapolei UH West Oahu West Loch Kapalama Pearl City Leeward CC Waipahu Chinatown Kalihi Middle Street Aloha Stadium Pearl Harbor Airport Lagoon Drive Critical TOD Priority Stations TOD Stations of Regional Importance

26 Policy Spectrum Development Design Land Use Type of Policy Site Standards Transit-Oriented Development Zoning Urban Growth Boundaries Public Purchase of Land or Development Rights Transferable Development Rights Urban Services Boundary Design Subsides and Taxes Performance/ Flexible Zoning Externality Charges Public Services Services Provided to Code Development Impact Fees Full-Cost Pricing Regulation Pricing/Market Source: ECO Northwest Allocation Mechanism

27 Neighborhood TOD Plan Status 3/11/11

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34 Kapālama Station Area Opportunities One mile from the Central Business District Station will lie directly East of Kapālama Stream Honolulu Community College 6,200 enrolled students Strong industrial and vocational programs Active Industrial and retail uses High residential population Developing high tech industrial campus Opportunities for residential development Interested major institutional land owner City and State owned land Kapalama Station Area Central Business District Mayor Peter Carlisle City & County of Honolulu

35 Kamehameha Schools Vision for Kapālama Kamehameha Schools had formulated a strategic plan for redeveloping the area The plan includes: Developing a Technology Park A linear park along the stream New multifamily housing

36 Development proposal by Robertson Properties for the former Kamehameha Drive-in site.

37 Development proposal by Robertson Properties for the former Kamehameha Drive-in site.

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39 PARTNERSHIP APPROACH: Collective, long-term, sustained, and strategic investments are needed in order to produce important community development outcomes. In addition to brokering a common agenda, these partnerships are building the capacity of community-based groups and other stakeholders to ensure strong local leadership. These coalitions help increase the flow of resources into neighborhoods, define and execute market-based strategies, and develop new approaches to creating and seizing neighborhood development opportunities. regional connections partnership approach targeted neighborhood planning sophisticated market analysis marketing neighborhoods aggressive land assembly housing development/ rehab tools economic development procedures that measure impact

40 Transit-Oriented, Employer Assisted, Workforce Housing Strategy Project Scope and Work Plan Build on existing federal, state, and county housing programs through public-private partnerships Compliment current Neighborhood TOD Plans and future policy updates Provide programming capacity to support integrated housing and transit projects Identify housing units and land along the transit corridor for preservation, rehabilitation, acquisition and infill development. Coordinate funding to secure property for workforce housing and provide and provide TOD housing finance tools for pre-development, land banking, rehabilitation, and other activities. Revise regulatory processes. Proposed Project Budget $4 million total: $3m from HUD grant, $1m from Honolulu s Housing Development Special Fund Additional in-kind contribution of staff time and partners (Kamehameha Schools [$2m in Land) & Pier Management [$5m equity]) Initial Budget $3,500,000 seed money for housing $500,000 for staffing, consultants & research $10,600,000 million Total Project Budget

41 TOD Housing Strategies 1. Focus on creating mixed-income workforce housing opportunities near transit. 2. Engage employers and employee unions to expand employer assisted rental housing programs; 3. Focus on preservation of existing housing units and; opportunities for acquisition and rehabilitation/adaption of existing structures, vacant and underutilized land; 4. Actively pursue modifications to state and local regulatory policies to reduce impediments to create more affordable, energy-efficient housing.

42 Multiple Approaches to Support TOD Revitalization & Intensification Increase density/development Revitalize commercial corridors Develop affordable housing Assist existing residents economically (workforce development) Enhance economic/job growth Neighborhood Preservation & Stability Prevent displacement of vulnerable households Preserve historic buildings Preserve single-family neighborhoods Enhance community activities (parks, schools, etc.) Maintain and enhance a particular local identity Access & Connectivity Increase transit ridership Overcome barriers to walking/biking Improve safety Improve urban design

43 Summary TOD Efforts Completed Station area plans for 8 stations Value Capture and market analysis for transit corridor First community-wide meeting held on July, 2007 at Leeward Community College. Second community-wide meeting held on April, 2010 at Farrington High School. Over 50 public meetings held in association with TOD planning efforts. Proposed 4 bills to the legislature in 2009 In 2006, toured cites with successful TOD program. In addition to city staff, participants included elected officials, state representatives and private sector representatives Held 2 Symposiums featuring national experts In Progress/Future actions 11 station area plans underway Land Use Ordinance review & revisions Transition to Honolulu Area Transit authority Awarded Community Challenge Grant form the Department of Housing & Urban Development to implement a TOD-Affordable Housing project

44 What Cities Can Do? Have a clear, common vision Know the market Do the hard work with the community first Have zoning and design guidelines in place Insist on quality Set density minimums Create value through a collaborative planning process Collaborative land assembly Assistance with project economics Direct investment to create public benefits Financing assistance tied to public benefits Co-investment and co-development