Honolulu Mayor Kirk Caldwell is hoping to lure more homeowners into applying for permits allowing them to create second dwellings as rentals by waiving as much as about $10,000 in sewer hookup charges and other fees.
Accessory dwelling units were hailed by Caldwell and City Council members as a surefire way to increase the number of affordable rental units available on housing-starved Oahu by allowing homeowners an easier way to create a second unit on their property, either attached or detached from the original home, without the need to subdivide land.
But the city has issued only seven accessory dwelling unit permits since the first ones in September, the Department of Planning and Permitting reported, while it is in the middle of processing an additional 70 other ADU applications or plans.
“It’s been pretty slow-going,” Caldwell said Thursday. “We should have many more in place.”
Potential ADU applicants cite the high cost of fees as a major reason for not applying, Caldwell said. The city charges a flat $6,624 sewer hookup fee each time a new dwelling is built. A building permit, the cost of which is based on the value of work, as well as plan review charges, grading and grubbing permits, and other fees could add $2,000 to $4,000 more, city officials said.
Meanwhile, the cost to put up the average dwelling, before fees, is between $60,000 and $80,000, city officials said.
“What we’ve been hearing from people is, ‘We’re building something affordable. We’re not going to spend a lot of money, so when you start assessing us for sewer hookup and grading permit fees and all these other fees, and you pile it on top of our capital stack, and it makes it a lot less attractive to build an accessory dwelling unit,’” Caldwell said.
Bill 27, sent to the City Council last week, waives sewer hookup charges, building permit fees and other charges for any homeowner seeking an ADU permit through June 30, 2018.
Greg Thielen, owner of Complete Construction Services Hawaii, said he was scared off from converting the recreation room in his Kailua home into an ADU because of the high city fees.
“I actually prepared a set of drawings and submitted it for an ADU permit and when I was told what the permit fees were, I withdrew the application,” Thielen said, adding that he advised officials at the Department of Planning and Permitting to consider instituting the waivers.
“If this bill goes through, I will go forward with my permit application,” he said. “My hope is they’ll find out that by waiving the fees, it’s going to increase participation in the program.”
Gladys Quinto Marrone, Building Industry Association of Hawaii CEO, said she applauds the proposal. BIA members and their clients have been discouraged by the fees, she said.
The proposal, to some extent, mirrors the building permit fee waivers the city gave to homeowners as incentive to install photovoltaic solar electric power systems from 2008 through 2013. The permit fee was $740 on a typical residential PV system valued at $40,000.
The city ended the program after the number of permits began tripling annually. From July 1, 2012, to Feb. 28, 2013, the last eight months waivers were offered, the city issued 13,321 PV permits.
As for the ADU program, city officials acknowledge the high fee costs haven’t been the only thing affecting the number of permits issued.
Art Challacombe, deputy DPP director, said it’s taking up to four months to receive an ADU permit because it enters the same queue as applications for other building-related permits. “Traditionally, it’s been first-in, first-out,” Challacombe said.
The city is hoping that handing over responsibility for ADU reviews to one plan checker will speed up the processing time, Challacombe said. ADUs are also subject to DPP’s “one-time review” process, in which permits are issued after only one go-around with plan reviewers.
Harrison Rue, DPP community building administrator, said the department has also encouraged contractors and building industry leaders to seek preapproval of any standardized ADU designs they may have, making it easier for them to get their permits approved down the line.
“We’ve talked to a lot of people who’ve said they’re working on models,” Rue said.
An ADU is a second, smaller housing unit, either attached or detached, that can be rented out to either family members or outside parties. Ohana units, similar to ADUs except they are supposed to be restricted to family members, were allowed for many years in some Oahu neighborhoods on a limited basis.
To learn more about ADUs, go to honoluludpp.org Opens in a new tab.
