THE AFFORDABLE HOUSING SOLUTION

 

Maui County already has access to many of the needed resources to resolve the affordable housing crisis. This proposal provides a process, network, and expanded resources to provide a long-term solution. Since the 1980s, the housing system has fallen short, yet it is still in use. Under the current affordable housing system, there are few tools that are fully utilized by the County to meet the needs of extremely and very low-income households (below 50% AMI), low- and moderate-income households (51% - 100% AMI), as well those up to 140% AMI who struggle to afford a home. The existing system uses an outmoded framework that:

• Assumes scarcity of resources,

• Creates and promotes competition among various interests,

• Dictates short-term Administrative and Council policy,

• Fosters affordable housing developer uncertainty; and

• Inhibits the County’s ability to fully take the lead on planning healthy, vibrant and affordable communities.

 

Maui community does not fully utilize the incredible resources, skills and systems presently available to resolve these long-standing housing needs. The root of this dysfunction is systemic. Embodied in the old framework are ingrained systems, processes and beliefs. Overhauling these systems will provide the solution to our current affordable housing woes. This proposal approaches the housing crisis from a perspective of abundance and creativity in order to reach a viable, long-term solution that will benefit the community. This approach can be integrated in the Maui County Comprehensive Affordable Housing Plan with further discussion.

 

OBJECTIVES

1. Provide a process and a system to resolve the affordable housing needs for our Maui County residents by fully utilizing the incredible resources our community has at its disposal. 2. Provide housing affordability beyond seven generations into the future by ensuring that the citizens’ investment creates affordability in perpetuity and does not become a windfall for an individual at some future time. INGREDIENTS A large part of this proposed implementation is a more in-depth partnership between public governance and non-profit management and expertise. Many non-profits have successfully increased affordable housing in the county, but they are also competing against each other for the trickle of resources out of the county, such as purchasable land and grants. They also cannot afford the weighty cost of infrastructure build out to meet the needs of their developments. These specific ingredients, if made available, could allow the existing systems to function more fully:

 

AFFORDABLE HOUSING SOLUTION

1. Engage our County housing non-profit organization skills, effective processes, and funding sources. (See page 6). Utilize the County non-profits who have developed a system that identifies, educates, vets, fairly selects housing candidates, and covers the 0 to 140% AMI. Allow application processes to be be streamlined by collaborating with and utilizing the structures already functioning at a high level in the non-profit sector.

2. Increase funding and grants available to non-profits with a collaborative approach, including but not limited to state and federal funding that covers up to 140% AMI. Seek government backed bonds, which will be easier to secure when supporting a lasting solution.

3. Use economy of scale with both infrastructure and housing development.

4. Utilize existing County land identified for affordable housing. Work with landowners to facilitate land swaps for optimal land for residential development or redevelopment.

5. See the full implementation of the MAPPS System for better planning and land use. 3 AFFORDABLE HOUSING SOLUTION FOR

 

COUNTY GOVERNANCE

1. Dedicate the additional property tax income from the tax structure for offshore ownership to the affordable housing fund.

2. Restructure within the County administration by supporting a Charter Commission approved amendment to create a separate Housing Department distinct from the existing Department of Housing and Human Concerns. This Department dedicated to housing needs would further facilitate the management of county resources for housing. With Charter Commission and Council support, it will be placed on the 2022 ballot, and it demonstrates a particular rewiring needs to increase the delivery of affordable housing.

3. Invest in the development of off-site infrastructure that benefits the greater community, not just the specific project. Presently, infrastructure is a key impediment to affordable housing development in the county with costs of water, wastewater, and road improvements estimated at $380 million for priority projects in Central, South, and West Maui alone. Without adequate investments in planning, managing, and developing this community serving infrastructure, the county will be unable to unlock the 5,000 affordable homes proposed in this plan.

4. Fast-track relevant planning and permit process and zoning codes to reduce costs.

5. Expand access and impact of the Affordable Housing Fund with revisions to the Maui County Code Chapter 3.35 that enables bond sales, increases eligible uses of funds for resource assessments on county-owned lands, and ensures investments in rental projects. Renters and homebuyers would be able to reduce their monthly rent and home purchase prices, respectively.

6. Amend and revise existing ordinances and zoning and develop tax incentives to encourage existing homeowners to provide affordable housing on their own properties.

7. The county could purchase and renovate or repurpose properties that are underutilized. For example, the Kahului Town Center has the infrastructure to support an affordable housing rental complex in a key location. The County needs to take on the problem similar to how it approached it with full effort in the 1970s.

 

AVERAGE MEDIAN INCOME SUBSIDY CONTINUUM

A housing unit is “affordable at 80% of AMI” if a household whose income is at or below 80% of AMI can live there without spending more than 30% of their income on housing costs. This household loan expense (P&I) monthly gross income calculation applies to each AMI, not just 80%. NHOM uses 35% but includes additional household expense that the County does not (insurance, taxes, PMI, HOA). Anyone earning lower than 60% of area median income are eligible to receive subsidies. Any project that caters to the 80% of AMI to 140% of AMI are usually private, although such projects are also eligible to apply for and utilize Affordable Housing Fund Grants. THE NON-PROFIT HOUSING TEAM • Stand Up Maui • Habitat for Humanity • Lokahi Pacific • Ikaika Ohana • Catholic Charities Hawaii • Ka Hale a Ke Ola (KHAKO) • Family Life Center • Salvation Army • Hawaii Community Assets • Maui Rescue Mission • Hawaii Community Assets • Project Vision • Na Hale O Maui • Feed My Sheep • Home Aid • Kalama I Ke Ola Health Center

 

FUNDING SOURCES

The collaboration of listed non-profits, the participation of the county and contractors, and AMI coverage from 0 to 140% opens up a wide range of funding sources listed in Appendix A. In addition, due to the the scope and lasting approach, the proposal can garner private donations and make bonds more available. Bonding capacity is quite high for the County, and such bonding is inexpensive money.

 

IMPLEMENTATION

1. Maui County allocates land directly for affordable housing, such as the 50 acres for affordable housing.

2. Maui County completes the required Environmental Assessment or EIS.

3. Maui County invests in infrastructure.

4. The non-profit housing team develops a collaborative approach to identify, educate, list and select housing candidates.

5. The non-profit housing team will manage construction for the range of housing support for EMIs between 0 and 140%.

6. Non-profit housing teams manage the facilities and assure they are maintained, beholden to legal contracts that meet legally-binding affordable housing standards. Such standards will be preferably established and enforced by a Housing Department. And such legally-binding standards will establish affordability in perpetuity. 7. The entire community invests and subsidizes affordable housing projects through taxes and making county land available for affordable housing that remains affordable.

7 AFFORDABLE HOUSING SOLUTION FOR MAUI MAUI PONO NETWORK

8. The new Housing Department will oversee infrastructure development by the county, further reducing costs and speed up the project.

9. The non-profits would oversee construction to assure high standards are met and residents comply with occupancy and other requirements and agreements. 10. Building 500+ houses and rental units at a time, allowing for discounted bulk labor and material costs. The non-profits or developers will oversee contractors and implementation.

 

CONCLUSION

A new and innovative approach to the development of affordable housing will increase out ability to deliver the affordable and workforce housing the Maui Community so desperately needs. Affordable housing immediately reduces the cost of living for Maui’s workforce and can slow/stop the exodus and “brain drain” of Hawaii’s families to more affordable mainland cities with lower cost of living where the dream of home-ownership are attainable. Of note, and not sully addressed in this Proposal, the main insight from the Comprehensive Affordable Housing Plan 2021 was that our current codified incentives that subsidize affordable housing are skewed toward 60-80% AMI households, while the greatest need might be in the 0-60% range. The existing subsidy schemes must be extensively reshaped. The County can do a lot on its own while advocating necessary reforms at the state and federal levels. Our tax system has been reshaped to allow a much fairer contribution from tourists and off-island investors. We can cut taxes on locals and small locally-owned business and still fund all the affordable housing we need. We look forward to partnering with the County of Maui to make truly significant inroads to our affordable housing crisis.