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Families, not investors, deserve to have homes in Maui County

OUR COUNTY

Housing. Cars. Food. Gas. We’re spending more on everything these days. Maui County’s economy is a microcosm of the global economy. The worldwide worker shortage, ongoing supply chain problems and inflation have hit our household budgets, and it hurts.

Our housing shortage also mirrors the outside. We simply don’t have enough homes to meet today’s demand in Maui County. Over the next five years, we’ll need 10,000 new housing units to satisfy the need. As context, our county permitted fewer than 5,000 new homes between 2009-2019.

Since I took office in 2019, 1,394 new residential units were built in Maui County — 364 were affordable rentals and 574 were purchased at attainable prices. Some 2,500 approved workforce homes for rent or purchase are now in the pipeline. To expedite construction, I am committing to this three-pronged strategy:

• Fast-track desirable housing projects through more direct action to reduce regulatory barriers and shorten the review process. My administration has instituted a new process that convenes every department at once to coordinate action to expedite permit approvals.

• Recommit Maui County to building necessary infrastructure to lower the costs of building homes to bring more units to market faster.

• Crack down on illegal short-term rental operators and work with the Maui County Council to make real property taxes more equitable for owner-occupied residences.

How did we get here? Over time, wealth managers and realtors have shifted from selling houses as places to live to “investment vehicles.” This change has yielded an oversupply of luxury homes and a deficit of family homes throughout Hawaii and beyond. Wealthy offshore investors, who often buy homes with cash, can afford to let them sit vacant most of the year.

People often ask me why we don’t just stop nonresidents from buying property in Maui County. The U.S. Constitution’s commerce clause prohibits discrimination against citizens of other states, and only Congress has the power to restrict foreign investment. The state and the county are powerless to change this.

Some investors, including corporations, purchase neighborhood homes to operate as short-term rentals. This is not unique to Maui. Other desirable locations such as New York, San Francisco, Vancouver, Sydney, Barcelona and Amsterdam have the same problem. They have found that too many short-term rentals inflate area home prices and rental rates, while reducing available residential housing supply.

Others say that short-term rentals harm the community itself. The Journal of Tourism & Travel published results of a 2017 qualitative survey of Oahu residents who said they worry less about the impact of short-term rentals on home affordability, and more about harm to their sense of community. When the house down the street has a revolving door for strangers, it affects everyone in the neighborhood.

Yet even before this trend, Hawaii has long been an expensive place to live. Everything, especially housing, is more costly here. Our geographic isolation means that all building supplies — every single nail — must be shipped in. Limited land and water, burdensome regulations, community opposition to development and well-intentioned, but misguided, housing policies often hinder or completely stop affordable residential developments.

Earlier this week, Oahu-based homebuilder Lokahi Global Corporation shared proposed plans to build a 125-unit multifamily complex in Wailuku town to replace a six-story hotel proposed before the pandemic. Sixty percent of the units would be priced in the affordable range with 40 percent at market prices. Lokahi Global has built other successful residential projects in Honolulu using this formula.

I fully support their plan. Future residents of a redeveloped Wailuku town can return to a time when “live, work, play” was the norm for Maui’s small towns. County and state employees, and those who work in the courts, could easily walk to work every day. With the nearby Maui Bus system, a professional couple or small family could downsize to one instead of two cars and save more of their hard-earned income while helping the environment.

Change won’t happen overnight, but progress is being made. Together we can solve Maui County’s housing shortage.

* “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.

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