Mar 28, 2010

Case Study: Nonconforming Rental Units in Residential Zone


My Client is looking for a residential property in town. A property that offers room to expand and has character.

Subject property is in the Moiliili neighborhood ("metro" region Honolulu)
  • List Price: $695,000
  • Zone: R-5
  • Lot Area: 5,000 sf
  • Liv Area: 962 sf
  • Bed/Bath: 4/2

FEATURES: Of particular interest was that the property is in the Ohana Zone, so it could potentially have a 2nd dwelling unit. Lot is level and rectangular shaped. Expansion potential at rear. Potential city/mountain views if building a 2nd story addition.

ANALYSIS from Realtor-Assoc: Subject property's List Price seems on the high end and may therefore be on the market a while. Price may be justified due to Low Inventory of avail homes. Here's what I figure as the Sold comps when i ran my market analysis in early Feb 2010. The main house is a 3 bed / 1 bath. The rear structure contains 2 bed / 1 bath.
  • sold comp #1: (McCully St) Listed for $499K, sold for $477K, 52 days on market (DOM). Approx 2 blocks away,similar age of house, similar lot size, zone, but larger living area. This property abuts a commercially zoned lot that built up to the property line, so light and ventilation is blocked from that side. However, short time on market suggests this property was well priced.Also, view is the McCully Bridge overpass and high traffic area. However, as a recent sale in the neighborhood, this will adversely affect an appraisal.
  • sold comp #2: (Koali Rd) Listed at: $549K, sold at $525K, 172 DOM.Although 2,374 sf lots size and 2/1.5 bed/baths are substantially smaller, this is on of the few sold comps in area.
  • sold comp #3: (Kamakini St) Listed at $725K, sold at $644K, 16 DOM. This property has 7,200 sf lot size, R-5 zone, but similar living area at 816 sf. Quiet neighborhood. Looks like a stream runs behind property.

  • Listed in order from top to bottom, 
  • comp #1,
  • comp #2 and 
  • comp #3

Analysis from Architectural Drafting Service:
  • Siting of house makes it difficult to add to. House is located towards front of property. Although there appears to be plenty of room, any structure must be setback a min 10' from the street. Consequently, there is insufficient room for a covered Carport or Garage in the front of the house. It may be possible to squeeze one in front, but it will alter the character of the front entry and possibly block the bedroom/living room windows that face the street.
    • Existing Carport on the left side of the house is within the 5' side yard setback. It was probably built without a permit and therefore cannot be grandfathered. Thus, there may be no existing legal space for covered car parking. 
    • If there is a complaint or a new permit application, the examiner will likely question the permit status of the existing carport structure in the side-yard setback. This is a fire-hazard. Historically, structures may have been allowed along street frontages since no other structures could be built there but not along side yards, where fire could easily spread to neighbor.
  • Rear detached structure consists of two bedrooms and a full bathroom. This structure is likely the original Carport that has been converted into bedrooms without a permit. The structure is rather poorly constructed and appears to be partially within the 5' side yard setback.
  • 1975 City Zoning Report indicates that a connecting patio connected the main house to the rear bedroom structure. However, that patio has been demolished and the City does not allow detached bedroom structures.
  • In 1968, a City Inspector, responding to a complaint that the property was being used as an illegal boarding house for 10 people, noted that a building permit could not be found for the 3 bedroom structure on the left side. At that time, the City issued a Notice of Violation and required that a 3rd detached structure be demolished. It allowed the left detached bedroom structure to remain, as their research was inconclusive. Today however, the zoning ordinance is clear when it comes to Nonconformities: ROH Sec 21-4.110 "...In other than criminal proceedings, the owner, occupant or user shall bear the burden to prove that a lot, a structure, as use, a dwelling unit or parking or loading was legally established as it now exists...."
    • Therefore, even if the inspector did not require proof of a permit in 1968, today, the inspector may decide it is an illegal structure. 
    • This will be an issue if there is a complaint or a new building permit application is filed.
  • There is potential for a rear attached Ohana unit. It would require a 2nd-story addition to peek out above the rear neighbors, who are built-up quite close to the 3 adjacent side property lines.
  • As is typical for older homes, the Buyer should budget for Electrical re-wiring, re-Plumbing and misc termite repairs.
  • a New Building Permit will be required for any significant repair work to this property. It will need to show the floor plan and indicate the use of the rear structure. At that time, these issues will need to be resolved.

When Buying or Refurbishing a home, it's important to know what you're getting into. 

And if you are brave and still decide to take the leap into a new Property, we can help avoid potential problems and offer design solutions to satisfy Your unique requirements and meet City Planning & Permitting approval.