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Planning strategic solutions critical for affordable housing

CHAIR'S 3 MINUTES

Back in April, County Council Chair Mike White contracted with SMS Hawaii to conduct an affordable housing policy analysis to identify barriers to housing development and develop a strategic plan to increase the county’s affordable housing inventory.

On Aug. 29, the Housing, Human Services and Transportation Committee, which I chair, discussed SMS Hawaii’s findings and recommendations for facilitating affordable housing development. The suggestions were based on stakeholder interviews and in-depth literature reviews of various government policies.

The policy analysis revealed a need of more than 12,400 housing units between 2015 and 2025 for Maui residents earning 140 percent or less of the area median income (AMI), which is currently identified as households earning less than approximately $114,000 per year.

SMS Hawaii also identified three overarching themes as major barriers to affordable housing development: rate of return, timing and certainty. For most affordable housing developers, these barriers are often deal breakers, resulting in a lack of affordable housing units.

Even nonprofit entities need projects to “pencil out” to achieve at least a minimum rate of return. Government conditions that decrease revenue or increase costs reduce the rate of return and force developers to seriously consider whether building a project is feasible.

Additionally, multiple funding sources are often required for affordable projects. Both private and public funders must be certain that a project will be completed as designed and within the specified timeframe before lending or granting money to a developer.

Timing for affordable housing projects is critical in all project phases. SMS Hawaii found that in some instances, the zoning and permitting processes imposed by both the state and county can lead to prolonged project timelines, which will often stall affordable housing projects for years.

However, project developers and their consultants must realize the importance of submitting complete, quality plans that can easily be reviewed by the county’s various departments. Each department deals with a slew of permits and reviews daily, and affordable housing developers must also take responsibility to prevent project delays.

The council, administration and state government must also be serious about evaluating the internal processes that deter or delay affordable housing projects.

The county currently collects 2 percent of real property taxes annually for affordable housing purposes and receives other federal sources of money to distribute to qualified projects. While this support is critical, simply appropriating money for affordable housing is not a comprehensive long-term solution to solving complex housing issues.

SMS reports that there is no county plan to proactively prioritize and utilize funds dedicated to affordable housing, nor is there a plan to actively seek out alternative sources of funding.

In the past, the Housing, Human Services and Transportation Committee has consistently asked the county’s Housing Department to develop a strategic housing plan. The department has stated a lack of development expertise and resources as reasons for not developing such a plan.

To address this, within the coming weeks I plan to introduce legislation that will provide a strategic plan for affordable housing and a process for streamlining county permitting.

The purpose of the strategic plan is to develop a county process to proactively obtain and utilize funding for infrastructure and affordable housing, establish land acquisition procedures, and develop overall strategies to create more affordable housing.

I also plan on introducing legislation that will expedite the workforce housing permitting process, underscoring the importance of public-private partnerships to make affordable housing a priority for both current and future administrations.

The upcoming legislative proposals utilize the valuable information and research garnered through the affordable housing policy plan and housing implementation plan provided by SMS Hawaii. To view the final reports, visit mauicounty.us/affordablehousinganalysis.

* Stacy Crivello is chair of the council’s Housing, Human Services and Transportation Committee. She holds the council seat for the Molokai residency area. “Chair’s 3 Minutes” is a weekly column to explain the latest news on county legislative matters. Go to mauicounty.us for more information.

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