Hawaii law exempts many smaller housing projects from school fees

Housing projects with fewer than 500 homes are exempt from school impact fees. The exemptions also cover certain affordable homes, single-room homes, and studios under 400 square feet without a separate bedroom, along with other listed housing types. Subdivisions and phases count as parts of the same project. A developer may not divide or phase a project to avoid the rules.

The School Facilities Authority decides whether covered developers must dedicate land, pay a fee instead, or do both. The authority gives its determination before approval of residential developments or condominium projects with at least 100 units. For a residential development with at least 100 units, the owner or developer must make a written agreement with the authority before a building permit is issued. The authority considers the available land, school locations, and infrastructure. Its decision is final. These rules apply to land dedication obligations for projects whose approval application is submitted on or after the law takes effect. The written agreement is due before a building permit is issued.

The State must accept dedicated school land within five years and begin construction within seven years after accepting it. These deadlines apply when a developer must dedicate land under an educational contribution agreement or the school impact fee law. If the State does not accept the land on time, the dedication requirement is satisfied and the land remains with the developer. If the State accepts the land but does not start construction on time, the land returns to the developer. The five-year period begins after subdivision improvements and needed offsite infrastructure are complete. The seven-year period begins when the State accepts the land.

Existing educational contribution agreements remain in effect, and remaining balances in eight named impact fee accounts move to school facilities accounts. The agreement protection covers agreements executed with the Department of Education or School Facilities Authority before the law takes effect. The account provision names eight accounts. An existing agreement can be changed or ended only if its parties agree. The remaining uncommitted balances go to the appropriate school facilities accounts and are administered under the school impact fee law. The agreement protection applies to agreements executed before the law takes effect.