WHAT is it about Subdivisions - Q & A

[Carey]

It seems that many people here are totally confused about property subdivisions & what/how they were created & why & what does it all mean..... there are many legal volumes on this & I am sure that there are many that have much more knowledge (heck, any real estate licensed person HAS to know more than I do one this...)

The issues some have are not new, nor are they unique to this county.... these same issues are throughout the country, esp. in areas where medium - large ag tracts were subdivided by land speculators for "community" developments... after both WW1 & 2 there were spats of poorly done subdivisions all over the place.... but it still happens...

Simply put:
Property subdivisions are made when a larger parcel is made smaller
there are many ways to do this, but the most economically is usually to maintain zoning while doing the division & the cheapest is almost always not to do residential, as residential zoning, almost universally, has many more access & utility requirements that add a lot of money on to the price of the parcel.

So for the developer the cheapest way out is to make a private, non-residential zoned "community"

For the land buyer, the cheapest way is is to buy land that cheap... unfortunately, that land may not be zoned for the purpose the land buyer wants...

Here in this county there are subdivisions that are zoned in many different was, there are even multi-acre lots that are zoned "condominium" so when you purchase land or a house on land... it is up to the buyer to make sure that the zoning is what they want....

So if you want the access & utility of residential area, buy residential. However, because there was more infrastructure required at the time of subdivision, these lots are normally smaller & more expensive (this is true anywhere I have lived....not just here)

If you are willing to trade off some of the utility & access for a lower property price, or if you want to do things like raise livestock, then look at other zoning.

Remember that USUALLY the value of a non-residential is lower, even the assessed value, so that a comparable lot MAY be paying less taxes, but also the rate may not be the same, so be aware that may effect your LAND value taxes... your house is assessed at the value of comparable structures, so that may not change based on the PROPERTY zoning (OK, is this getting confusing??)

Now public vs. private subdivisions... if the subdivision is public, access may need to comply with code, so to save money, the original developer may have created a "restrictive" provision (things like an HOA) That is right, a private subdivision is thought of as being MORE restrictive than a public one....not LESS so, but it is CHEAPER to initially create & usually that savings is passed on

Incorporated vs. unincorporated (I do not think we have this issue here) would be whether the parcel is within the limits of a governing body (usually a town or a city) that has separate taxing provisions from the general land taxing body (usually county)

So, usually the cheapest land tax in any area is ranch/range land that is unincorporated in a HOA (and we do have that off of Saddle - but the water & home prices there are wayyyyy off the charts), but the governing body can question a zoning that is just meant to evade taxes (which is why pasture animals must cross the properties in that Saddle subdivision)

Now where do the Post Office fit into this...well really not into a discussion of zoning...but I know that some one will ask, soooo

They have their own standards & formulas for HCR delivery distance, density & road conditions... many areas of the country do not even have rural delivery, sooo...

[kalakoa]

Excellent overview, to which I would add:

Several of the "substandard ag subdivisions" were created in the years before statehood, sold cheap to mainlanders in certain states where pro-statehood votes were needed. As a side effect, there were basically no rules about infrastructure -- not that rules were important when a subdivision was granted as a political favor.

Even where a township has not formally annexed a given parcel, it "belongs" to a ZIP code and/or Telcom service area which is its nominal "town". The local large-scale/low-density means that any given subdivision may be spread across more than one town. (This is somewhat unusual in a more-developed high-density area, where the subdivision is either already "in a (as in, one) town" or annexed as part of development.)

I tend to think that the subdivisions should incorporate; it makes more sense than having everything be "Pahoa".

[Carey]

This "substandard" subdivision is not unique to Hawaii (ie the infamous swampland subdivisions in Florida)

The last place we lived was a private ag. unincorporated with only 80 acres total & covered 2 different postal codes...so this can happen even on the mainland. Some of the reasonings for odd divisions are relic old things... there was a narrow gauge rail line that had bisected the area until the 40's, but the long gone relic was still bisecting the postal codes, so we had 2 different HCR boxes from 2 different Post Offices....

Also there are areas in the country that not nominally included in Postal or Telecom (even rural electrification did not get to all areas of the country... granted these are far more rural than this county, but this is a fairly low density rural county, so much of what people complain about in regards to services would seem like nirvana to many that have lived in low density rural areas....

There are no towns or cities in the state, the governing body is the county (the reason we have county mayors, a nice little relic from days of yore), so there is no incorporation for the subdivisions to do here...

I seriously doubt you will ever get any of the private subdivisions get enough votes, and to do all of the utility & access work to upgrade their services enough to meet county code to meet the requirements for public subdivision, so they will most likely stay private... but there is always the potential....if enough of the members voted to upgrade....

Your analogy of a "town" got me to remembering years ago when Sprint wireless got in REALLY big trouble from the ICC in the early 1990s, as it was charging tax based on zip code...a big no-no when you have vast areas that are not incorporated, and the incorporated areas have a different tax rate....
Those types of issues make nightmares for companies that are more structured to high density service...

[kalakoa]

Funny, I've heard of the Florida swampland subdivisions ... are you saying the Ag subdivisions here are actually a scam?

[dakine]

IMHO the best reference on this subject is the book "Land and Power in Hawaii" by Gavan Daws. This is a must read for anyone interested in just how subdivisions in the Puna district (and others) came to be developed.

[Carey]

Not a scam, just not residentially improved subdivisions (Most of the Fl swampland subdivisions do exist, but may lack things like passable roads, utilities, buildable land... this is not to equate them with the subdivisions here, but there may be similarities....)

As to wether the initial buyers of the land here got what they thought they were paying for from the subdividers... well, here, like FL and many other states, these were land buyers for a speculative subdivision...you can look through the archives of some of the HOA's to see some of the advertisements that were used to make your own determination... I am just saying that speculative subdivisions have been done in many other states, not just Hawaii...

[Rob Tucker]

I have done substantial research on the subject and examined the files at the Planning Department rather thoroughly. At the time the subdivisions were created the the Board of Supervisors violated a number of ordinances in force at the time. I believe they are sill liable for these violations. There were and from that time continuously have been, regulations specific to the subdivision of real estate in the County of Hawaii - especially regarding road standards.

Puna was developed as a tax mine for the county to receive property tax revenues and provide zero infastructure. Millions and millions have been collected. It was and remains illegal.

[kalakoa]

Curious: what rules/regulations were on the books when Hawaii was still a Territory?

Some of the "most worthless" subdivisions were created pre-State...

[Rob Tucker]

The primary ordinance, and this is from memory, is Ordinance 58 later amended by Ord. 1953-128 which is still in effect (see a partial section below). I believe it is titled: "Regarding subdivision of real estate in the County of Hawaii" or something like that. There were others too dating back to about 1948.

It would appear that there was a big rush to exploit Puna just before statehood...perhaps the large landowners and investors weren't sure what effect statehood would have and with the cooperation of the Hawaii Country Board of Supervisors about 80,000 lots were subdivided in a hurry. One survivor of that Board of Supervisors remains... Helene Hale. Ask her, she will tell you... they were setting up a tax mine and didn't think anyone would ever move in.

From Wikipedia: Helen was born in Minneapolis, Minnesota, on March 23, 1918. From 1955 until 1963 she served on the County of Hawaii Board of Supervisors. From 1963 until 1965 she was the County's Chairman and Executive Officer (a forerunner of the mayoral position).

On the books were road standards, county standards, that were not enforced. The subdivisions should not have been allowed and sale of lots should not have been initiated before the required improvements were completed. They never were completed. In fact lots were sold before many roads were even started.

Many local and state politicians were partners in the corporations formed to exploit Puna. A wink and a nod.

The liability of the county is huge.


From Ord. 1953-128:

"COUNTY OF HAWAII TERRITORY OF HAWAII ORDINANCE N0. ~~
AN ORDINANCE AMENDING SECTION 9 AND SECTION 16 OF ORDINANCE N0. SBa
AS AMENDED, PERTAINING TO THE REGULATION OF THE SUBDIVISION OF REAL
ESTATE IN THE COUNTY OF HAWAII

BE IT ORDAINED BY THE BOARD OF SUPERVISORS IN AND FOR THE COUNTY OF HAWAIIs
Section le Paragraph 7, Subsection A, Section 9, of Ordinance
Noe b8s as amended' is hereby further amended to read as follows
7. Pavement of streets and roads within the County of Hawaii.
All streets and roads hereafter constructed within
the County of Hawaii shall have an approved six (6)
inch base course and three (3) inch asphalt macadam
pavement or two (2) inch asphalt concrete pavement
which shall conform to the standards ae set forth
by the Department of Public Works"

Section 2. Paragraph 8, Subsection A, Section 9e of Ordinance No. 58, as amended, is hereby repealed o
Section 3e Section 16 of Ordinance No. 58, as amended, is hereby
amended to read as followss
"Section 16. Penalty.
Any person, firm or corporation, violating or failing
to comply with the provisions of this ordinance, shall
be punished by a fine not exceeding five hundred dollarsa
The continuance of any such violation after conviction
shall be deemed a new offense for each day of such
oontinuance
Section 4e This ordinance shall take affect upon its approvals


I have studied the amendment history post 1953 and there were no amendments effecting the 1953 road standards except (as I recall) one which said that all roads in the county must be to the same standard as Hilo.

[kalakoa]

Okay then: when will there be a class-action lawsuit against County?

What we have currently is a system wherein certain owners of "worthless" land can live a "no-code" lifestyle, which puts them below the exemption, effectively reducing their property tax to zero ($25/year probably doesn't even cover the cost of collecting the $25).

In exchange for tolerating the lack of infrastructure, these people are mostly left alone to live their simple lives in shacks (old schoolbus, tarps, whatever).

But: because the "lifestyle" is technically "illegal", there's an ever-present risk that County might suddenly decide to enforce the rules... anyone who is just barely getting by is effectively bankrupt at that point, with little hope of ever gaining "compliance".

I tend to think that the above "bargain" should be legislatively quantified, because the underlying structural problems are very unlikely to be addressed. Building out real infrastructure and raising property taxes high enough to cover the actual costs might be the "correct" solution, but people at the lower echelons would be completely disenfranchised unless there were a corresponding increase in the minimum wage (back-of-the-napkin says about $18-20/hour) , and the big corporates are unlikely to go along with that.

Realistically, wealth redistribution via repressive taxation regimes does nothing to fix the broken "money = value" assertion upon which our governments are based; as a species, we really need to evolve beyond this flawed thinking. (The rise of "intellectual property" is a symptom of the overall distortion, but that's another thread for another time...)