 episode of Kondo Insider and my name is Jane Sugimura and I am your host for this episode and Kondo Insider is the show for people who live and work in condominiums or who have anything to do with condominium association and today we're going to talk about a topic that I've been talking a lot about and maybe writing about and it's an issue that people keep grumbling to me about and that's the city ordinance, the fire safety ordinance 19-4 and as my guest today is our champion in the city council, council member Carol Fukunaga. Aloha. Hi Carol. How are you Jane? Thank you for being my guest today. We're here on almost my favorite topic because we keep getting comments from associations as to how did we get to this place? We have this ordinance that is creating all kinds of issues and when the ordinance was first drafted it came about because of the condo fire at Marco Polo in 2017. Absolutely. Right and over the years the implementation has been spotty and it's just become unmanageable and it's created a lot of stress with condo associations because of the deadlines, the cost involved and so you know what is the status of it now of this ordinance? Okay well the ordinance is still in existence. We have tackled this ordinance many times over the last five or six years and the bill was amended this year to extend some of the deadlines at least by five years in each instance and so for those who choose to pursue improvements, fire safety improvements rather than installing fire sprinklers, they have up until 2030. However, unanticipated challenges over the last two to three years have really turned this what we thought was going to be a pretty straightforward you know you could either take one route or you could take another route. We have found that there have been so many issues and problems. Number one the deadlines were unrealistic at the outset and so as we have faced new challenges they've had to be modified and pushed back over time. The pandemic created supply chain issues you know which also contributed to increased costs for regular repair and maintenance and it makes it more difficult to obtain estimates for life safety evaluation upgrades in order to get a passing score. So on top of all of that really things that we had absolutely no control over there was a Florida condo collapse several years ago and so last year you know you and others alerted us to the fact that the federal what is it HUD issued directives that took effect on January 1, 2022 to member banks that they ought not to make loans to condos who had any kind of significant deferred maintenance or unsafe conditions or had you know failed to make appropriate repairs or take corrective actions in their buildings. So you know Council Member with that I just heard you know and I would I don't want to mention the bank but I just heard you know from some of my constituents that there's a local bank that's not making loans because of that directive and you know when we're talking about loans we're talking loans to association to do repair maintenance loans to unit owners if they want to do you know if they want to do renovations or if they want to refinance except in this market who would want to refinance they probably have three percent mortgages but you know and you know it's going to affect prospective buyers who want mortgages right and so we're being told that you know that issue about you know having deferred maintenance that's this bank is saying that a failed LLC constitutes grounds to deny a loan because that failed LLC is filed it's public record it's filed with the enforcement agency which is the Honolulu fire department wow that is I think maybe if you're going to be working on an amendment we need to clarify that so that you know it takes that out of that realm of maybe this is you know an issue regarding deferred maintenance that's going to trigger the HUD directive that you don't make loans we can't have that we we really do have to bring you know all the parties to the table and you know the the other condition that was unexpected was the fact that the insurance industry started increasing the premiums on residential high rise what is it premiums for multifamily residential buildings and so I have been receiving complaints about insurance increases that are more than 50 percent almost you know in some instances may be more than double you know within the last year and so many buildings even those that have pursued you know corrective action to life safety evaluation improvements but have not completed that process yet they're being hit with higher and higher premiums so I think everybody within you know the 309 condo properties that are subject to this law all have some really difficult challenges to face this year and and I think that's why we're all receiving so many concerns well you know when you talk about getting the you know the players together you might want to include the insurance commissioner who has allowed these insurance increases to go up and and remind him that that ordinance 19-4 expressly exempt high rise buildings with open exterior quarters from putting in fire sprinklers they're exempt so if you have an ordinance that says hey you know and and this would be I know what is it I think it's a while a lot of one building and the yaharba tower right right they have open exterior quarters their insurance went up yes I mean they got huge increases and you know you have one ordinance that says oh no your exempt you don't have to do it and then you have the state saying hey no you don't have a fire sprinkler so you now you got to pay higher insurance that just doesn't sound right that's absolutely correct and so part of what we did was we sent letters to 309 condo high rise buildings and shared with them the contents of the fire department's august 2022 report which did list you know of the I guess of the buildings that had filed their life safety evaluations it listed the scoring within a variety of categories you know six of the most troublesome categories and it reflected a very low acceptance rate of only 20 buildings out of the 275 condo properties that had submitted their life safety evaluations only 20 received acceptable scores so that means you know 255 high rise buildings are sort of stuck trying to address or correct or improve their scores by putting in either more improvements or changing what they were planning to do and I think that is a huge huge problem as we also have many many challenges at the department of planning and permitting right and you know with that issue with 255 buildings and you know with and our building is one we are one of the 255 buildings that didn't get a passing score and our nicest professional is telling us you know just upgrade your fire alarm system but that's about you know which is cheaper than putting in fire sprinklers it's about a million dollars but it requires a building permit and so if you know if at least 200 of the buildings of the 255 building permit are we going to get them I mean it just seems to us the public I mean I read the newspapers and it seems like the department is in disarray I mean their administrator left his right hand left so you know who's running the show I know it's very troubling especially now when the city is poised to start implementation of its illegal vacation rental enforcement program starting next week so I am very concerned we you know we have not heard exactly how they're going to address some of the backlog I know that some of the industry design professionals and you know construction industry leaders have met with the mayor and among some of the ideas that have been tossed around to at least tackle the immediate you know backlog was to allow for those projects that were being you know submitted by licensed architects you know where the plans and everything else were pretty much ready to go that they be allowed to proceed that you know the city not kind of force everyone to dot every I and cross every T before allowing them to get into construction because typically in a lot of the renovation or construction processing you know the the permit review portion is just the first step actual changes and corrective action can actually be taken once a project is underway and you actually see how things are happening on the ground so you know we have a lot of residential property owners and others who have been calling us to find out how do we you know move our our projects up in line and we receive the same answers that um everyone else does so I think everyone is equally concerned and you know with respect to these projects we what kind of what what is the backlog we like and if they do implement this process by allowing architects to sign off on things how soon will they implement that so that we can start getting our building permit that I I can't answer that question but uh we're we're happy to put it in writing and send it off to the department and see if we can get something concrete but we are looking to uh schedule you know schedule meetings with condo stakeholders condo managers etc as soon as we can get kind of the the city agencies together to talk about the areas of concern that were identified by many of the people who responded to the um the fire department report that we circulated among all of the affected buildings so I I'm pretty confident that you know as we get closer to um the fact that the city is um imposing a lot of requirements on individual properties and condo associations without having any kinds of solutions in place I think they are going to have to either relax some of the requirements or they're going to have to be willing to change the law so I think that's you know really our goal during this next few weeks is to find out specifically you know what the city is willing to do whether they're willing to modify the life safety evaluation types of criteria or eliminate you know the process entirely and allow for a lot of the life safety types of improvements to be considered under the regular state condo regulatory framework because that would seem to be the more appropriate place in trying to address these kinds of issues and then on top of that you know I think there's still the insurance issue which would need to be worked out as between you know the fire department the city and um state insurance commissioner have you heard back from the fire department I know you said that you contacted them have you heard back from them yet um yeah we did hear from them but we said you know we um wanted to make sure that we had all of the relevant city agencies at the table and after we set the uh the letter and you know outlined what many of the uh responses were uh they did uh circulate a press release to say that the deadline for the tax credit for uh fire sprinklers condo fire sprinklers uh the deadline is September 30th but that was the first time I had ever seen the city send out a notice ahead of the deadline to talk about that tax credit of course that only that only uh that only means is that only is uh you only get the tax credit if you've got the fire sprinklers and I know I know and so it's really not a solution but you know I think this is the first time we at least receive some indication that city agencies realize that this whole thing is a ticking time bomb and that they have to really uh step up to the table and join with the affected parties to craft the solution because I think they were waiting for people to come to them but you know everybody is sort of stuck in the same queue and now that we are aware of all of the building permit delays at DPP we don't want to just add another 255 plus buildings to that mix without a solution ahead of time and you know one thing that you know if you have a hearing on this new bill uh we're going to be testifying that you know out of all the municipalities that have a fire sprinkler ordinance and there are they are municipalities they're not state laws you know Honolulu by far is the largest yes that has one and they're the only one that's mandating the fire even Chicago that's correct has an ordinance but if they're not mandating kind of like voluntary that's correct that's correct in our you know so so I don't know if the Chicago bill offers incentives we're installing it but you know to to to the condo associations at least if it was voluntary that means that we we are in charge of our own fate yeah gives us time to raise the money you know and without doing special assessments and and and if it's going to take us four or five years then we can do other stuff you know to to to remedy like in my building you know for the vertical openings every time a plumber comes into the building and breaks open the wall and they see you know open you know vertical openings they're told to fill it up because I'm told it's less than a hundred dollars and I said fine tell them to build the association see but that's like random like whenever they open up a wall to do plumbing repairs they see the vertical opening so yeah maybe after 10 years we'll have most of them filled but you know at least we're not breaking open the wall just to do you know one thing the vertical opening right which is one of the big deals one of the big issues regarding the life safety valuation well that's where I think having a much more comprehensive discussion you know among all the people that are affected and the city agencies is really step number one because you know when we adopted this legislation I don't think anyone envisioned that we were going to face so many different worldwide global you know kinds of conditions that affected the implementation of this ordinance you know it was it was just unheard of to imagine that the world could change so dramatically and so I think for the city it's really important to reconsider you know what is the most practical way to achieve fire safety for everyone in a manner that's reasonable you know because where we are now is really putting a huge huge burden on many property owners for the 255 buildings or the 309 buildings total that are faced with this requirement and you know that's a lot of people it's over 50 000 units so if you assume that you know there's at least one person per unit sometimes two sometimes more that's a big chunk of Honolulu's population right and you know and and you know the fact that you know like I said this local bank and I don't know if the rumor is true but if they're if they're looking at you know LSEs that are recorded with the Honolulu Fire Department as indicative of the building's failure to do deferred maintenance that means those buildings are going to be denied loans you know yeah that's that's really not um not a fair assessment of what the ordinance requires and so perhaps if uh if there's a way that we can confirm that you know I would be happy to follow up with the particular financial institution because what I'll do is I'll email it to you because I don't want to make it public I guess if it's a rumor okay and it's one of the bigger one okay because I think if we can bring them into the discussion and show them how you know this whole life safety evaluation process was never intended to take on a life of its own in the manner that is is happening today right and it may be too and and for our audience I mean I know you're working on another bill yet another bill to amend the ordinance and one of the amendments is going to be changing you know the deadline again because you know there's not any real way that the buildings can realistically meet these deadlines we might want to clarify that the failed LSE reports that are filed with the LSE do not you know constitute a defective report relating to deferred maintenance that would trigger the HUD directive you know just for clarification okay well that's where a lot of the comments and feedback that we have received from condo associations you know as a result of seeing that fire department report have really some good recommendations and so if we can put all of them together I think you know it's time for the city to sit down with condo owners and condo managers and we really do have to take a much different approach to what was envisioned then as having choices you know of different types of approaches whereas today it's it's locking everyone into a one-size-fits-all type of solution right and I think that's what's you know so frustrating for a lot of the association mainly because you know they don't have the funds and yeah this is a common problem with the older buildings they don't have funds because as it is because they're old they're doing repairs and maintenance and now with the supply chain problem it's costing them more money so you know even if they have the money you know to put in the fire sprinklers it's getting used you know things to do their regular maintenance and repair and then you know that that insurance increase I mean that hit us I mean we didn't have anything budgeted and you know for my association I think the first four or five months we were running negative luckily we were you know my property manager and site manager they worked really diligently to you know to work on costs and so now we're in a surplus situation again and you know so but you know it's just you know these things keep coming at us and it's not like you know condos have a lot of money right and when we do the annual budget it's a zero sum gain in other words the budget is what you know is what you know the operating budget is what it should cost you to run the the building and if you comply with your budget at the end of the year you have zero in your account right and you know the whole and then and and and if you start raising maintenance fees you know you get people mad at you because all of a sudden you're raising double digits and you know with an older building you have to do that otherwise you have a condo collapse situation again in Florida right well I definitely think that there's ways that you know this problem can be solved and I think it's going to take city and state agencies as well as legislators working together because we now have the perfect storm oh and I mean I don't want to say that you know lightly but you know the things that have been happening this year are all things that were never contemplated at the time ordinance 19-4 was adopted so it's a good time to revisit it and if we cannot come to some you know kind of common consensus as to the best way to go forward then I would say it's time to repeal it and does your bill have a provision for the repeal of the ordinance we have various drafts so some drafts the simplest way to address this issue from a drafting standpoint is to repeal the requirement because the fire code the applicability of the fire code within city laws tends to be very broad based and so if you're going to amend the you know the requirements of the fire code that pertain to residential high rises it becomes a very tricky and cumbersome process you know and so from a drafter's standpoint they said it would be simpler to repeal the law and then start over with things that you wanted to allow people to proceed with as an incentive and so for that process you want to bring everybody together right either to talk about a many existing bill or repealing it and starting all over again right right and in that type of environment I think part of what we would want to have is the city and state work together much more proactively because the insurance components are really an important part of what is making it very difficult either to sell to buy or you know otherwise transfer interest in these condominium properties and that's a that's a really big concern okay for the people who are listening to our listening audience if they want to help and you know this bill has not yet been introduced right you have it's in that's correct that's correct and you don't expect to uh uh uh introduce it until we have this meeting with the city agencies and right and and and stakeholders right but so when when this bill comes out and naturally we're going to broadcast it to everybody we can how can my the listening audience help get this bill passed well um for those that you know have given us comments and feedback you know on the fire department report that was a big help for anyone else who is reviewing the issue if they share or let us know some of the issues and concerns they have had to face all of that becomes very valuable because the more that city agencies see just how difficult this whole process is the more they begin to realize that it's not something that is an easy task for you know thousands and thousands of property owners it's it's really a lot more cumbersome than than we originally envisioned and would it help for the listeners to contact their their council members and let them know that they have a concern sure we would love that we would love that okay so so that's that's one thing to our listening audience is that you know when we finally get a copy of this bill that gets introduced we will broadcast it to everybody and every and and their your job would be to contact your council member and let them know and you know and and for planning purposes do you have like a range of time when you think you'll be able to introduce this bill at this point it's a little hard to say because i think we want to get the meetings underway immediately and so the sooner we get those underway then we'll have a better sense of what's an appropriate time frame you know for legislation okay well you know council member i'm so grateful for you you know being on my show today to talk about this and like i said you've been our champion on this issue you know for for condos and we really really appreciate it and um and and and we really are grateful for all the work that you've been doing on this issue well i think it's it's really um it's been a very eye-opening experience because for everybody anyone who lives in a condo property you begin to discover that most people have no real uh idea of just how many challenges condo owners face you know whether it's a matter of bulky item pickup types of issues whether or not it's a trash collection issues and so this fire safety issue was something that i think people thought would be as simple as installing fire sprinklers you know in their own homes but they didn't realize that when you're talking about multifamily high rises that have hundreds of units and thousands of owners it's a very different animal very very different from what you know they thought okay well we we've run out of time i you know i'm so grateful that you agreed to be my guest today and like i said we're always so grateful for the work that you've done we're the and you have a lot of condos in your district and that may be why but that's that's okay the rest of us really love you for that well we have good you have good condo owners and you actually have a lot of really good condo advocates you know who have been participating for years on condo issues so i think that makes a big difference thank you okay but we need you know we we also are grateful for champions like you and because sometimes you know that's not always the case so i just wanted you to know that you know i've been hearing some good things and people are very grateful for what you do i want you to know about it okay well thank you so much jane and thanks so much for giving me an opportunity to uh join you today and talk a little bit about the next day the next step rather in tackling these condo fire sprinkler challenges okay and you know to our listening audience um please uh tune in next week for another episode of condo insider and thank you for joining us today uh mahalo and aloha thank you so much for watching think tech hawaii if you like what we do please like us and click the subscribe button on youtube and the follow button on vimeo you can also follow us on facebook instagram twitter and linked in and donate to us at think tech hawaii dot com mahalo