Maui scores high on ‘least affordable’ list

Island comes in fifth on Forbes’ list of places with expensive housing

Online real estate sites show this three-bedroom home at 349 S. Kihei Road listed at $749,000, or $7,000 below March’s median price of $756,000. Maui ranks No. 5 out of the 20 least affordable housing markets in the nation, according to a recent listing in Forbes magazine that used data from RealtyTrac for the first quarter of this year. The Maui News / MATTHEW THAYER photo

Online real estate sites show this three-bedroom home at 349 S. Kihei Road listed at $749,000, or $7,000 below March’s median price of $756,000. Maui ranks No. 5 out of the 20 least affordable housing markets in the nation, according to a recent listing in Forbes magazine that used data from RealtyTrac for the first quarter of this year. The Maui News / MATTHEW THAYER photo

Maui has joined the ranks Los Angeles, New York and San Francisco, cities famous for their movie star residents, company tycoons and the wealthy. The Valley Isle is one of the least affordable places to live in the United States.

In a recently released list by Forbes, Maui is No. 5 out of 20 least affordable housing markets, even beating out Los Angeles.

On Maui, the percentage of average weekly wages required to pay down a median-priced home is 92.8 percent, according to the list presented in a slide show on Forbes’ website.

According to the Realtors Association of Maui, in March the median price of a single-family home in Maui County soared to $756,000, one of the highest monthly benchmarks in more than a decade. (Members of the association could not immediately be reached for comment Tuesday because they were attending a conference in Washington, D.C.)

On the top of the Forbes’ list of most expensive is Kings County, otherwise known as Brooklyn, N.Y., where a buyer would use 121.7 percent of average weekly wages to pay down a median-priced home. At No. 20 is San Diego, Calif., at 64.6 percent.

Honolulu also made the list at No. 13, with residents using 78.4 percent of their average weekly wages.

San Francisco was No. 4, with residents paying 94.6 percent of their average weekly income. Los Angeles was No. 18 with residents paying 67.8 percent, and in New York City, residents pay 77.4 percent, the list said.

Forbes looked at RealtyTrac’s least affordable markets based on the percentage of average wages needed to make monthly house payments on a median-priced home. The RealtyTrac report looked at first-quarter statistics for 2017.

It assumed a 30-year, fixed-rate mortgage and a 3 percent down payment, including property taxes and insurance.

Maui’s top five listing didn’t shock the island’s affordable housing advocates, who said residents are able to pay for housing because many pull extended family in to live with them to help pay the rent or mortgage.

Also, Carol Reimann, Maui County’s director of Housing and Human Concerns Department, said much of the housing is being gobbled up by out-of-state buyers, limiting housing for residents and creating higher housing costs.

Alice Lee, president of Go Maui, a nonprofit organization that tries to empower residents to obtain housing, educational opportunities and employment, took the news in stride.

“I’m not surprised. Because we are probably one of the most overregulated municipalities in the United States,” Lee said. “Only recently, in the last couple of years, were the housing requirements modified. But (from) 2006 to 2014, there was a requirement for 50 percent (affordable units) for any new subdivisions.”

Currently, 25 percent of the units need to be affordable.

And, she said, what hinders construction is the “Show Me the Water Bill,” which requires developers to find their own water for housing subdivisions.

Lee said finding water is tough and expensive. Developers can come across legal challenges by residents when attempting to drill and find water resources.

Lee added that Maui’s position as a top resort destination is a double-edge sword.

On one hand, tourists drive the island’s economy, but “people like it here; they want to move here.”

But, she said, the island can accommodate those who want to live here.

“Everyone can be accommodated, if people learn how to compromise,” she said.

Tasha Kama, Maui lead organizer for FACE, or Faith Action for Community Equity, which advocates for affordable housing, said she understands Maui’s ranking.

Over the years, residents’ income has failed to keep up with the cost of living, she said.

“Most people they go to work. They work at $10, $12 an hour. Their wife works, $10, $12 an hour. In order to live, to have a two-bedroom house, (you need) $34.32 an hour. That’s why you have mom and dads working. That’s how you get your $34,” Kama said. She added that many residents also have part-time jobs.

Rent for a two-bedroom home may cost between $1,600 to $2,100 a month, she said.

Families are able to make the rent when an older child works and a grandparent contributes his or her monthly Social Security check, she said.

“Families make it work the best way they can. The families that are homeless don’t have that kind of support system in place,” Kama added.

Both Kama and Reimann agree that the lack of housing and affordable housing has driven prices up.

Reimann said that, according to a Hawaii Housing Planning Study last year, Maui County has the highest percentage of out-of-state units sold, with 51.7 percent of all residential home sales made to out-of-state buyers.

The purchase price of the units bought by international buyers was, on average, 64.6 percent higher than prices paid by local buyers and 28.3 percent higher than prices of units sold to Mainland buyers.

Most of these units are second homes purchased by out-of-state buyers.

“Unfortunately, units that are absorbed by external demand compete with residential use for local families. The result for local families is lower availability and higher cost of living,” Reimann said.

On the county level, Reimann said the administration is working on amendments to the workforce housing ordinance to encourage more residential construction. Her department plans to introduce proposals to the County Council to create opportunities such as a potential new lease-to-own program.

And, there will be a forum on the challenges of affordable housing June 30 at the Maui Beach Hotel, Reimann said.

“The goal of the event is tackle the issues, discuss ideas and identify solutions,” she said.

Reimann noted that there are nine housing projects, both market rate and affordable, that are under construction or nearly ready to break ground on Maui. These projects have signed workforce housing agreements with the county. The projects include three in East Maui and Upcountry, three in West Maui, one in South Maui and two in Central Maui.

* Melissa Tanji can be reached at mtanji@mauinews.com.

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