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Fast-track affordable housing bill passes on first reading

Measure would require 201H projects to be 75% affordable

The Kaiwahine Village affordable rental project in Kihei is pictured in June. The Maui County Council on Friday passed a bill on first reading that would require 201H fast-track projects to be 75 percent affordable, unless the council approves a lower percentage above 50 percent. Photo courtesy of Moss Construction

A bill that would tighten affordable housing requirements for projects seeking fast-track approval under state law squeaked by with enough votes early Friday evening to pass on first reading before the Maui County Council.

In the 5-4 decision, Council Member Mike Molina, the bill’s author, voted in favor along with Vice-Chairwoman Keani Rawlins-Fernandez and Council Members Gabe Johnson, Tamara Paltin and Shane Sinenci. Those voting in opposition were Chairwoman Alice Lee and Council Members Kelly King, Tasha Kama and Yuki Lei Sugimura, who said they wanted to await the outcome of a comprehensive affordable housing plan that’s expected to be drafted by March.

The bill would require that 201H housing projects would need to have 75 percent affordable units unless a lower percentage greater than 50 percent is approved by council.

Hawaii’s 201H law, administered by the county, is an expedited path that allows exemptions from certain rules and fees for housing developments with a minimum of 50 percent affordable units.

Local nonprofit Hawaii Community Assets was awarded a county contract in November to engage the community to develop the comprehensive affordable housing plan. It is slated for draft review in March by the council and approval in June. Sugimura said at Friday’s meeting that the cost of developing the plan was $300,000.

She pointed to testimony from Jeff Gilbreath of Hawaii Community Assets, who told the council that none of the residents they surveyed asked for the threshold to be increased to 75 percent. He requested that the council wait until the plan is released.

“We are doing it a little bit backwards,” Sugimura said, adding that she appreciates Molina’s intent.

Lee agreed, saying that her takeaway from Gilbreath’s testimony was that any action taken on Friday “would be sort of piecemeal.” She wanted to see changes across the board on housing.

Molina, however, said that the plan will not examine the fast-track housing process and questioned how passing the bill on first reading could conflict with the upcoming plan.

He called the bill “another tool in the box” to get affordable housing and said if developers do not want to comply, there is another way to get approvals, but without the exemptions that the 201H process offers.

Molina said he was looking to assist residents who need housing — some of whom may even be working for housing developers themselves.

Testifiers who said the bill could slow affordable housing were “fear mongering,” Molina said, pointing out that developers in Maui County are already coming through with proposals of 75 percent, with one at 100 percent affordable. He said he didn’t see how the bill would deter more development

“Seems like they are open to it,” Molina said.

Joe Kent, executive vice president of the nonprofit think tank Grassroot Institute of Hawaii, was among the testifiers who said Friday that the bill “is increasing hurdles to housing.”

He explained that in 2020, a survey of 1,030 municipalities in the nation showed that only three — two in California and one in Massachusetts — required developers to have more than 75 percent affordable housing. Those municipalities saw a more than 60 percent decline in housing development in the decade after the requirements were implemented.

Kent added that often with affordable projects, the “only way to make those pencil out is through government subsidies,” which will be a “burden on taxpayers.”

Maui Tomorrow President Michael Williams said he supported the bill. Addressing other testifiers’ concerns about a possible “loophole” that would allow the council to approve projects of less than 75 percent affordability, Williams said it could serve as a benefit if council members see merit in a project. For examples, some developers may propose projects of only 50 percent affordable housing but might offer to keep the homes affordable in perpetuity.

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

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