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Maui County's current shortage of available housing is an example of how external circumstances affect our everyday lives even in the middle of the Pacific. We aren't alone in this struggle and neither is the state of Hawai'i, nor any other state in the nation.
Between 1968 and 2000, America's housing inventory grew steadily at an annual rate of 1.7 percent, according to a recent study, "The Major Challenge of Inadequate US Housing Supply." Between 2000 to 2010, inventory growth shrunk to 1 percent and between 2010 to 2020, it dropped again to 0.7 percent.
The Great Recession of 2007 to 2009 weakened both housing prices and homeownership rates. The sluggish market hindered new investment by housing developers.
Decades of under-building left a huge gap between supply and demand for housing, now estimated to be around 6.8 million housing units nationwide. That's equivalent to housing Washington state's entire population.
COVID-19 made things even worse. During the pandemic, the housing market tightened up more as available housing inventory dropped to its lowest level since 1999, when tracking began. Low supply and higher demand drove housing prices even higher, faster.
In resort communities like Maui, residents compete with cash-rich offshore buyers who invest in real property for profit. The 2020 census revealed that one in five homes in Maui County are unoccupied. The median price of a single-family home on Maui topped $1 million this year. Such prices squash the dreams of local families to buy a house in their own homeland one day.
Earlier this month, the University of Hawai'i Economic Research Organization reported that another reason behind Hawai'i's high home prices is the state's overabundance of regulations. Complex regulation delays new home construction and any homebuilder will confirm that every delay costs money. Researchers concluded that Maui County's regulatory burden ranks in the state's top 5 percent. They point to the courts, political involvement and community "NIMBYism" as driving forces behind lengthy and expensive hold-ups for homebuilders. Another expense comes with the long wait for permits, which in Hawai'i, is more than triple the national average.
The County of Maui is working on solutions to these problems. By accelerating the pace of home construction and cooling the appeal of investment homes, we can increase the availability of more housing units that our residents can afford to rent or buy.
Earlier this month, the county launched its new MAPPS (Maui's Automated Planning and Permitting System), a web-based, paperless permitting process to replace the county’s legacy system, KivaNet. The new system is intended to simplify and expedite the permitting process.
Last week, the County Council approved two of my proposals to get some workforce units built more quickly. Council members approved the conveyance of 35 county-owned lots in the Fairways at Maui Lani subdivision. Maui Health Foundation will receive 19 lots to build homes for essential health care workers and a community land trust, Na Hale O Maui, will get 16 lots to build homes for moderate-income working families. It's a small, but important step.
The council also approved my proposal for a public-private partnership agreement between the county and developers of Waikapu Country Town. In exchange for assuming the developer's required contribution toward the new Central Maui wastewater treatment plant and Waiale Road extension, the developers will build at least 213 additional residential workforce housing units, to total 500.
In addition, my proposed fiscal year 2023 budget adds nearly $30 million to the Affordable Housing Fund to advance some 2,500 approved projects currently in the pipeline.
The Maui County Council is actively planning changes to real property tax rates to diminish fiscal incentives to keep investment homes vacant. More of this kind of creativity, positivity and a dose of patience will get us to where we need to go.
Having ample options to put roofs over the heads of Maui's working families is crucial to our economic vitality. New home construction provides good-paying jobs and stimulates our economy. A healthy mix of housing options that includes affordable rentals, kupuna housing, market-rate homes and attainable single and multifamily homes will improve everyone's quality of life.
* "Our County," a column from Maui County Mayor Michael Victorino, discusses county issues and activities of county government. The column alternates with "Council's 3 Minutes" every other weekend.