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$1.6B affordable housing plan unveiled

Draft calls for land dedication under county’s workforce requirements

The affordable Kenolio Apartments in Kihei are pictured Tuesday afternoon. A nonprofit contracted by Maui County unveiled a $1.6 billion draft plan on Tuesday to bring 5,000 affordable units online in Central, South and West Maui through major overhauls to the county’s affordable housing approach. The Mauii News / MATTHEW THAYER photo

Called “bold” and “dramatic,” a $1.6 billion draft plan unveiled Tuesday to bring 5,000 affordable units online in Central, South and West Maui calls for major overhauls to the County of Maui’s affordable housing approach.

Recommendations include requiring that developers dedicate 25 percent of land to a trust that would be managed by nonprofits for long-term affordability, raising real property tax rates on nonowner-occupied and vacation rental homes and allowing the county to shoulder the burden for major infrastructure projects.

“We’re asking for a paradigm shift for the county to take a lead in affordable housing development,” said Hawaiian Community Assets Executive Director Jeff Gilbreath.

Gilbreath presented highlights and financial breakdown on the draft Comprehensive Affordable Housing Plan, which would require $1.6 billion to execute, during the Maui County Council’s Affordable Housing Committee meeting on Tuesday.

Long discussed as crisis, the lack of affordable housing spurred the county to contract Gilbreath and his team for $300,000 in November to engage the community and develop a comprehensive plan to create 5,000 affordable homes for households at or below 120 percent area median income. With a focus on Central, South and West Maui, the final plan is due to the council in June.

Jeff Gilbreath, executive director of Hawaiian Community Assets, discusses the draft Comprehensive Affordable Housing Plan during Tuesday’s Maui County Affordable Housing Committee. His nonprofit was contracted in November by the county to develop the plan, aimed at bringing 5,000 affordable units online in five years. The Mauii News / KEHAULANI CERIZO photo

The draft plan cited county permitting from 2007 to 2014, saying that developers can’t provide more than 25 percent affordable units without adequate support as shown by the lack of development when the requirement was higher than 50 percent.

It also said major infrastructure projects are a “huge impediment to new development.”

The county needs to take responsibility on infrastructure, target affordability of homes and bring certainty to the planning and development process, the plan said.

One of the biggest shifts would be changes to the county’s residential workforce housing requirements, which mandate 20 percent of development units be affordable. In lieu of units, developers would be required to instead donate 25 percent of the land to the county via land trust; then nonprofits would contract a partner to build long-term affordable units with higher density.

In order to bring 5,000 units online, the county would need to embark on a $1.6 billion “comprehensive” affordable housing plan that draws money from the county’s bonding capacity, from market rate housing fees and from other new sources, the plan said.

In order to recoup funds, the county can use its bonding capacity, increase real property taxes on some homes and charge infrastructure fees once homes tie in to the new resources.

Gilbreath and his team said that Maui County trails Honolulu, Kauai and Hawaii counties when it comes to real property tax revenue. Increasing rates on nonowner-occupied and vacation rental homes will generate more income.

The county has an ability to bond against money that has certainty and real property taxes could be used as bonding source, with the potential to bond up to $804 million, he said.

“The county has an amazing opportunity to use its bonding capacity to turn this money into affordable housing fund into larger sums,” he said.

Also, Gilbreath emphasized that the county should position for federal infrastructure bonds for new affordable housing.

“We know that the federal infrastructure bill is coming and it’s coming quickly through Congress,” he said. “It is our understanding that for new growth development, new affordable housing development, the federal government will be looking for a dollar-for-dollar match. This is a huge opportunity to put Maui County as the leader here in Hawaii on affordable housing development, (and) to position the county so you have the infrastructure funds necessary to leverage this federal investment in a big way, and we’re going to need it.”

With more money in the Affordable Housing Fund, the county can shoulder infrastructure and support costs, such as developing four new wells in West Maui, new water storage capacity and transmission lines, along with hiring more staff in departments such as Housing and Human Concerns, which will be needed to lead new projects.

He added that community engagement is necessary throughout the process.

Council members had an array of questions on the presentation, pointing to timeline and funding issues, along with other challenges.

Gilbreath emphasized the draft will be refined and the final report will be made in June.

“Good presentation . . . revolutionary I might say,” Council Chairwoman Alice Lee said. “I think some of those changes you are proposing are very dramatic. Hopefully we’re up for the task.”

“I was expecting some bold changes, and of course you did deliver,” said Council Member Shane Sinenci.

With no vote scheduled on the agenda for the housing plan on Tuesday, committee Chairman Gabe Johnson deferred the matter.

* Kehaulani Cerizo can be reached at kcerizo@mauinews.com.

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