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This is in response to County Council Member Elle Cochran's Dec. 1 Viewpoint on the council's efforts to deal with Maui County's housing crisis. Ms. Cochran graciously asked for comments on the council's efforts and plans, so here are a few.
The council's Planning Committee chairman, Don Couch, appointed a special team of council members (Cochran, Gladys Baisa and himself) that spent months this fall studying what the county can do to address the housing crisis. While this group -- which the council refers to as a TIG, a Technical Investigative Group -- came up with a list of far-reaching ideas and possible initiatives, it never really addressed the fundamental problem with the way the county approaches the housing problem. Maui County is stuck in its role as a housing regulator, when we need it to become a housing facilitator.
Ask any economist who studies this problem and they will tell you that the main problem is basic supply and demand. State economists, using models created by Harvard University, tell us that to keep up with demand by our local population, Maui County needs to be building 1,400 housing units a year. For the last decade, we have built more like 200-300 units annually. That's a big reason for our affordable housing problems.
One solution that the TIG suggested, and we concur with, is to encourage existing homeowners to build additional units on their properties. Unfortunately, the council immediately opted for a regulatory approach to this initial proposal -- the "affordable accessory dwelling" bill. The bill would allow ohana dwellings on properties smaller than 7,500 square feet and greater than 5,000, but requires that the owner place a permanent deed restriction on the property that says the owner will follow a strict rent control formula that would limit who the owner can rent to and how much they can charge, based on the renter's income. The bill also would require the owner to issue annual compliance reports to the county, forever.
The county Planning Department has stated on the record that these overreaching restrictions would greatly limit how many owners would actually make use of this opportunity. They also said the restrictions are not enforceable.
What we need is housing inventory. It is the Realtors Association of Maui's opinion that this proposal, as currently written, chokes off any chance that small-lot owners would make a serious contribution to that effort and starts our community down the road toward rent control. This situation is similar to the council's original workforce housing ordinance's 50 percent affordability requirement. That requirement killed the housing market. The same would happen with rent control. While the council's intentions are laudable, they miss the economic point: We need housing units built.
In her statement, Ms. Cochran also referred to her frequent challenges to workforce housing developers' efforts to make sure that potential homebuyers actually qualify under the law's requirements and will be able to successfully meet their home loan commitments.
It is RAM's opinion that the developers should be lauded for doing the right thing. We would like to point out that there is no financial benefit to the developer to refuse potential buyers. The workforce housing law assures that. What the developers, and their associated Realtors and lenders, are doing is making sure that these families are not hurt like millions of American homeowners were in the recent housing meltdown (2007-11.) There are many cases where overzealous "creative financing" led to fiscal disaster for Maui families. Being told that your family does not have the necessary resources to buy a home can be painful, but it is nothing like the disastrous impact of a foreclosure.
Rather than attempt to make these developers out as "lawbreakers," we believe the council should be thanking them for being willing to jump through the nearly endless line of legal hoops necessary to build housing in Maui County.
That's part of becoming a facilitator: learning to look at reputable builders like Alexander & Baldwin as partners. Because without private-sector investors -- either by the owner of a house lot or major corporations -- we are not going to successfully build the housing inventory our community so desperately needs.
* David DeLeon is the government affairs director of the Realtors Association of Maui.