 Thank you for joining us at the life of the land is in its real estate and on think tank Hawaii. Today I have an amazing guest. I have Michelle D'Amico here to talk to us about permitting on Oahu. Welcome Michelle. Thank you so much for joining us. It's great to be here Kino. Yeah, thank you. So as you all know, I am a real estate agent here on Oahu and I do conventionals. I do VA. I primarily work with investors. So we deal a lot with permits, but I also have an occasional client who wants to change out of kitchen or add a car port. So this is where Michelle would come in and her architect skills and her knowledge of permits. So Michelle, why don't you go ahead and tell us a little bit about yourself? I moved here to Hawaii about 30 years ago. I am a registered architect here in the state of Hawaii. I do drafting and design services and I also am a certified residential third party plan reviewer with the city and county of Honolulu. So great. So first let's talk about my buyers who come in and they want to change out of kitchen. Kitchens are running between $20,000, $30,000. They want to do a full kitchen. Do they need to get a permit? Yes, they should probably get a permit because they are touching the electrical and the plumbing. But there's different ways about going around getting that permit because they could just go online and get individual permits. There are certain online permits that are allowable today. There's a number of electrical. There's a number of plumbing which just allows you to remove and replace the plumbing fixtures. And then there's a repair permit for upwards of $30,000 that allows you to replace work up to $30,000. But that means it's like for like that you're not moving anything around. You're just taking out and replacing. And I actually had a client who does real estate investment and that's actually how he renovated a house. So we actually had permits on the house because those are online permits. On the $30,000 repair permit, if the building inspector does come out and he deems it should be a bigger permit than what is shown, then he will tell you to stop work and to actually apply for a permit. Okay. All right. So what about my investor clients that want to come in and do a full demo, a full gut job, a new floor, a new paint, new roof, new kitchens, new bathrooms? What kind of permit? What are we looking at with permitting there? You definitely need to go in and get a complete permit because the work is over the $30,000 limit. So you would probably need to get a complete set of plans done. You'd probably have to contact an architect or a drafting company. If the work is over $50,000, it's required to have a stamp from either an engineer or an architect. And then you submit and you just wait until it gets routed and approved. And you're probably looking at a couple of months before you see a building permit. So what is the exact process? If we are starting day one through where our permit is closed, can you walk us through those steps? So say you're a real estate investor, you just purchase the house, you want to go in and got it and redo it. What you should do as soon as you before or after you close on the house is actually get an estimate from an architect. And then normally you start working with them. They'll prepare plans and the plans can take a couple of weeks. It can take a week or it can take a couple of weeks. It really just depends on how fast somebody's able to make decisions on the design and just say, this is what we want, just go in with it. Then once it gets submitted, you're looking at probably about two to three months before you actually see a building permit. And then once you've obtained the building permit and just make sure you don't close up walls because the electrical inspector then is going to want to see what is in the walls. The plumbing inspector is going to want to see what's in the walls and the building inspector is going to come out. So once they've all come out, then you can close up the walls. And then they all need to sign off to close the building permit at the end. And then once the building permit is closed, then you guys are good to go. So then we can close up walls, do our final touches, stage it and put it on the market. Yes. Who applies for these permits? Depending who you decide to work with. A lot of the drafting companies, if you go directly with the drafting company, most of them will not route the permits. They'll tell you to find a permit router. Some architects are the same, some included in their services. So it really just depends on who you contract with if you ask them to include it in the contract. There are also companies out there, that's all they do is permit routing. But the problem is, is if you're not doing it in conjunction, so if the owner takes it and routes it themselves, which they're allowed to do, then just keep in mind, because if you think you're saving money by doing it, just keep in mind that if comments come out of the building department, you're trying to find the drafting company or the architect or the engineer to make those changes. And if they're routing it, they tend to stay on top of the permit more. If you pay their services, if not, you're trying to locate them. They then need to make those changes, then get them back to you and then get them back into the building department. So when you say comment, that is the building department saying they want changes. Yes. So whether it's the Board of Water Supply, Waste Water, Civil Engineering, or the Building Code Plan reviewer, it's whether or not they have comments or they need clarifications to the drawings. All right. And that is something you do, correct? Is that something you do? Yes. Deal with the comments and take care of that. All right, great. So we all know that we can drive around the neighborhood and we see work being done. So what are the ramifications if someone does not get a permit? You need to be aware if you do not get a permit and you are caught doing work that does require a permit that as of July of last year, if you receive a notice of, first of all, the first thing the building inspector will tell you is to stop work. If you choose not to stop work and say he comes back again and you're still working, just keep in mind that two ordinances were passed back in September of 2019, where they can find you up to $2,000 a day or you can be arrested and look at spending a year in jail if you choose not to abide by what they're saying. They have that ability under two ordinances that were passed in September of 2019. The other thing he can do is just give you a notice of violation. If you're given a notice of violation, then you'll have to go in for a building permit within a certain time frame. He will, he gives you the first 30 days, then if you still don't get in, he'll give you a second notice of violation telling you you need to get in for a building permit. If you still don't get it in within that 60 days, then the fines will start. But also keep in mind that once you go in for a building permit after you get a notice of violation, the building permit when it comes out will be three times the original cost. Wow. Oh, so why is that? They just, they raised the fees. It used to be double and last July they tripled it. So if we're doing $150,000 in work, how much are we looking at just for a regular permit before fines? How much can someone expect to stay? So hang on. So you're saying $122,000 plus work is what you require? $150,000 or even $100,000. Let's make the math simple. We'll just make it $100,000. Yeah. So $100,000 permit is about $2,440. So if you don't get a permit, you're looking at close to seven grand with the fines. Yeah. And that could make a huge difference for someone who's trying to flip and even for your regular homeowner who just wants to change out of kitchen. So you're better off getting permits. But what are some of the falls that we're seeing if we're with getting permits? Are there any red flags we should be looking out for things we should watch for after we apply for permits? Well, I mean, if you're touching dirt, any soil. So if you disturb any soil, you now have to deal with the erosion control plans that came into effect in August of 2017 that we now have to submit erosion control plans. So if you disturb round work, that's more than 120 square feet, then it's required to have an erosion control plan. Then as of this September, every plan that goes in that has to do with exterior work, we now have to do stormwater management plans. And you're only allowed now under the stormwater management plans to have 75% hardscape on your property. So if you now buy a property and say the previous owner between the house and then they paved the entire thing because they didn't want to deal with landscaping, you're going to be removing concrete. So if you look at a 5,000 square foot lot, 70% is 3,500. 75% you're looking at probably almost 3,800 to 4,000 square feet can actually become inclusive of the house, the driveway and any sidewalks or concrete area. You're looking at maybe about 4,000 square feet. After that 1,000 square feet of the land has to be permeable. That means that if it rains, the water's going to just soak through the ground into the ground. It can't be just concrete anymore. Okay, so yeah, I've seen a lot of investors who are just putting a lot of concrete. So wow, that's great to know. So let's move on to oceanfront property. That's a huge can of worms. Don't buy oceanfront. So what is the difference in the permitting process if you want to make changes or totally rehab a property that's oceanfront? Okay, so as of September, the governor signed bill, state bill 2060. According to state bill 2060, all properties that are sitting on that are shoreline and if they're all shoreline properties and if they're in the SMA, all now require shoreline management permits. So you're looking at for a shoreline miner because that, so whether you do a minor or major is determined by the cost of how much money you're putting into the project. The cutoff for minor and major is 500,000. So if you're doing something less than 500,000, it's a shoreline miner. If it's over 500,000, it's a major. But to do both of them, you're going to be required to have a certified shoreline certificate, which will run you about $3,500 and it takes about six months to obtain. And you have to have a current one. And a certified shoreline is only good for one year. Okay, then on top of that, you're going to have to get an environmental assessment done. An environmental assessment would mean that you have to hire, there's only a handful of companies that do it here. And you're looking at about a minimum of $15,000 up to $100,000 that you could end up spending for an environmental assessment. So to do a minor, you would do a certified shoreline and an EA, then that goes, then you submit for your permit. So the whole process for a minor is about four to six months. If you do a major, we actually should take that back for a minor, you're looking at a few months. Could be maybe two months. It takes usually the EA takes about 45 to 60 days for them to prepare. But the certified shoreline takes up to six months usually to get because DLNR has to, you have to have the survey or do it, then they submit to DLNR, then it takes DLNR to come out and then they have their whole process. If they're overwhelmed and busy, it can take almost up to six months to get a certified shoreline. And you can't get your SMA permit until you have a certified shoreline. And once you have a certified shoreline, it also determines where you're allowed to build on the property or if you can't extend the house. So from the shoreline, usually on a residential property, you come back 40 feet from wherever the certified shoreline is taken. And that's where your house has to be. If you, if it has shifted, so it's an existing house and the shoreline shifted, then it's considered now a nonconforming structure. So you will not be able to extend the house and you have to be very careful what you do with the home. If you have to go in for it. So say you tear down and rebuild or say you, the work you're performing on the house is over 500,000. Now you're looking at a shoreline measure permit, which, which starts with an EA, then you submit for the shoreline permit. Then you have to, has to have a public hearing. Then it goes in front of the city council. The city council then determines whether or not you get the SMA permit. That whole process can take upwards of six months. And if they don't commit or give you an answer within the, if the city council does not give you an answer within the six states, the 60 days of when it gets submitted to them, then deem the entire application rejected and you have to start all over again. Or they can determine that the environmental assessment is not good enough and ask you to undo an environmental impact study, which then takes another six months to prepare or longer sometimes. And that requires, because what they're looking for, there's no mitigation issues with the property. Like there's nothing with archaeological, there's nothing with any rare species, whether it's plants or animals or birds or foliage. And that if it is found on the property, how are you going to mitigate it and take care of it? So when it gets to that point, sometimes it can cost almost up to $100,000. And that's where you see like why, if a developer gets involved and when it hits that, sometimes they walk away from the project, because it's just not worth it for them to figure out what to do. It's just too much money and too much of a hassle. There are some people that have gone in for SMAs and they're still working on them two, three years later, trying to get through the whole process. So let's go back and clarify for our viewers, what is an SMA? An SMA is a shoreline management assessment. It's a specific permit regarding shoreline properties. And it sometimes doesn't just hit shoreline properties. When you look at a zoning map, it will tell you whether or not you're in an SMA. So when you guys, so as realtors, when you look at everything, if it says the property is in an SMA, now just be aware that you are going to be required to, if you touch the property or your clients are going to touch the property, they will be doing shoreline permits now. I mean SMA permits. Wow. Okay. All right. So we had talked about talking about Bill, sorry, I wrote it down, Bill 110. But I do have one question. SES pools. Now that you're talking about, let me say, I know we deal with along, in Eva, along the beach and out on the on the windward side, a lot of the ocean front have SES pools. So SES pools have to be converted to septic systems. It is now a requirement. So if you buy a home and you're planning just to remodel or add on to the house, you are going to be required by the state health department to install a septic system prior to getting your building permit. They will no longer sign off on building permits until a septic system is installed. So prior to the current director who took over the department, they used to waive that and allow the building permits to move forward. What has happened is a lot of people obtained permits to install septic systems because they were just renovating, but they never installed them. So the new director has turned around and said, we're not signing off on anything until the septic system is now installed. Now, if you're tearing down and building a new house, they will allow the septic system to be installed at the same time the house is being built because you are demolishing and they will go out and check. So on the additions and remodels, they're making the civil engineers who stamp and sign the septic drawings to go out and clarify and submit letters that the septic systems have now been installed. And they will not sign off on the building permits until they receive that letter from the civil engineer now. Okay. All right. Thank you for that clarification. So now bill 110. We know we have been hearing about that bill for a couple of years now. And people refer to them as monster homes. And you said there was a correct term for those homes. So can you kind of give us the correct term and the update on what are we seeing with bill 110? Well, first of all, bill 110 no longer exists. Okay. It's bill 79, which is ordinance 19-3, replaced it in May of 2019. So the current bill that the current ordinance we work under is bill 79. And they're not called monster homes. They're actually referred to as large, detached large dwellings is the correct term for them. So how, so the difference between, so bill 110 was originally approved by the city council in May of March, sorry, March of 2018. When monster homes became a huge issue, that's how bill 110 came into play. Because a lot of people got very upset about people, a lot of investors were buying homes, knocking them down and maximizing them under the zoning codes and the building codes. So they are built according to current codes, and they met the zoning codes of when they got approved. The problem is, is that they were much bigger than what the house currently was there. And then what was happening was these homeowners or property owners were going in and modifying the homes after they got their certificates of occupancy and turning them basically into tenement housing. So instead of it being a single family dwelling, it was now being used by multiple families living in there. So that became the biggest issue with the neighborhoods. And that's how, why the bill came into play. From there, there was further discussion that was done by DP. So after bill 110 approved, the city council came up with a committee between DPP and the building industry and the professional and architects and engineers fulfilled the committee. And they revised bill 110 to bill 79. So under the current bill, once you hit 60 percent floor area ratio, which means it does not include the garage, it's just living area. So if you have a 5,000 square foot lot, you can build a house up to 3,000 square feet. But the thing is, once you hit 3,000 square feet, your setbacks now go from five feet to eight feet. So you don't start at five feet anymore. Your setbacks will start at eight feet. So that means if you add a second floor, the upper floor is now 10 and a half feet minimum from the property line to fit in the building envelope. And you can build upwards to 70 percent floor area ratio on the property. So that means even if you decide that you're doing an accessory dwelling unit above the garage and all of that, all of that is considered part of the FAR on the property. And then there were a bunch of other things that were under bill 79, which had to do with the number of bathrooms that were allowed on the properties. So depending on the size of your property, determine how many bathrooms were allowed. So if you had one, I can remember offhand is if you had a 10,000 square foot property, you could have 9.5 bathrooms on the property. The problem with it being tied to the property instead of the house made it very difficult that if you bought a lot that allowed multiple homes to be built, you were restricted on the number of bathrooms. So if you were a developer and you came across an R5 property that was 35,000 square feet, so basically you could build up to seven homes, you could still only have a total between all of the houses, nine and a half bathrooms. So what they have done since then is bill 57. So bill 57, which goes into effect on March 1st has changed that. So now depending on your lot size will determine the number of bathrooms, but now what they've done is they've added the component that if there's multiple homes on the property, now it will tell you how many bathrooms are going to be allowed in each one of those houses. So if it's 5,999 square feet, if it's a single family dwelling, you're allowed four bathrooms in the house. If it's allowed to have multiple homes on the property, you're allowed two bathrooms per household and it keeps going up. So on a 10,000 square foot property now, you're allowed up to eight bathrooms, but if there's multiple homes allowed on the property, each house is only allowed to have four bathrooms in it. So there's now a chart that's been applied. The other things that changed in the bill also had to do with the setbacks. So now when you hit 60% floor area ratio, the setbacks now start at 11 feet. So you need to keep in mind that if you buy a lot that has an existing home on it and you decide you're adding onto it and say it's a small lot. So say you bought an R5 lot that's only say 4,000 square feet and you want to add onto it, but you hit the 60%. So that would put you at about 2,400 square feet for the house. Your setbacks on the existing house would have to have started at 11 feet. So there's no way you would ever add on to that house. To bring it up to 60%, you could add on, but you'd have to stay below the 60%. Okay. All right. This has been amazing and just great information and we could have a whole other show because I know there's going to be a ton of questions from our viewers on this and I so appreciate you joining us on the live. You're welcome. Real estate. There's so much more I want to know. You know so much of such great information. So I definitely want you to come back. But for our viewers, I just wanted to thank you for joining us on this week's show and thank you, Thank Tech Hawaii for having us and we will see you all in a couple of weeks and I will be sure to bring our guests back because I know she's just opened up a whole bunch of more information that we all want to know. Thank you again and I will see you. Welcome. Yes. I will see you all in two weeks.