Council approves housing policy

The Maui News
Saturday, November 04, 2006
By ILIMA LOOMIS, Staff Writer

WAILUKU - The Maui County Council passed the Residential Workforce Housing Policy Friday that would set strict new requirements for developers to build affordable homes.

Mayor Alan Arakawa planned to veto the bill, saying it would do more to hurt the housing market than help. But the council's unanimous vote indicated more than enough support to override an Arakawa veto. Council members said the policy would be an important first step in providing more housing for local residents and said warnings about the policy just came from developers protecting their business interests.

"I don't think the sky is falling. I don't think the earth will open up and swallow the County of Maui," said Council Chairman Riki Hokama. "I consider this a time and opportunity that may never come again."

The council voted 8 to 0 to support the bill, with Council Member Dain Kane excused.

Mayor Alan Arakawa said he expected to veto the bill, even though it appeared he did not have enough votes to make it stick.

"It doesn't matter. My job is to protect the community any way I can," he said. "If the council overrides it, the council overrides it."

He said he based his decision on input from developers, economists, bankers and other industry leaders who said the policy would stop new construction.

"We don't want a bill that will prevent affordable housing from being built," he said.

Some council members were angered by a letter circulated by Arakawa last week, in which he issued a "call to arms" to the business and development community, asking them to express their opposition to the bill.

In his letter, Arakawa said council members were motivated politically to support the policy, in order to boost his opponent in his re-election race, Council Member Charmaine Tavares.

Council Member Michelle Anderson said Arakawa was wrong.

"The only person who's made this political is the mayor," she said.

Anderson said the bill would be an important step in promoting social and economic equality on Maui, because it would ensure homes for local residents, who can't compete for homes on the free market against millionaires who want to buy a piece of Maui.

She had little patience for developers saying the policy wouldn't work.

"It's time for them to get real and get fair with us, and start providing housing for our people," she said. "If they can't do it, fine. Aloha 'oe. We don't need them in Maui County."

The policy's housing requirements would kick in for any development of five or more residential units, as well as hotel or time-share projects that generate three or more units.

Projects in which fewer than half the units built are to be sold for more than $600,000 would have to provide 40 percent of their units at affordable prices. Developments in which half or more of homes are priced above $600,000 would have a 50 percent affordable requirement.

Hotel and time-share developments - including renovations that increase the number of lodging units or convert a hotel to a time-share property - would have a 40 percent affordable requirement.

Developers could satisfy the requirements by simply building affordable homes for sale or rent, providing land, or partnering with a nonprofit organization to build the homes. The affordable homes would have to be priced according to a range set by the policy, running from $204,000 to $454,700.

They would also have the option of paying fees to fulfill the requirement. Council members on Friday changed how the fees would be calculated, setting them at 30 percent of the average value of market-priced homes in the development. Previously the fee was based on the value of the affordable units.

Council members heard hours of testimony Friday, both from backers of the policy pleading for the county to ensure the construction of affordable homes, and from business and development leaders warning the policy would make development unprofitable and have a chilling effect on home construction.

Real estate broker Carol Ball said the requirements were too high, and the policy would not result in the construction of affordable homes.

"You've heard from the building industry that the percentages in the bill will not work for them," she said.

But Lesley Bruce of Hana pointed to local residents who are forced to live on the beach because they don't have a home.

"It is selfish of those of us who have a house not to assure that those who want a home can have that option," she said.

Chairman Hokama said he was skeptical of critics of the bill.

"I haven't been shown substantial data from the development sector beyond the three words, 'It won't work,''' he said.

Previous efforts to ensure affordable housing by following developers' recommendations have failed, he said, adding it was time to go after developers with a "hot prod." Hokama was "disappointed" in developers, who he said were refusing to look at alternative ways to make it work.

"Why are they so stubborn to only look at it one way?" he asked. "Because it is to their advantage to only look at it one way."

Council Member Jo Anne Johnson also did not believe the development community's predictions about dire consequences.

"They have been getting away with highway robbery for a long time," she said.

While developers complain that it takes the county a long time to process permits, Tavares said the reason behind the problem is that the county can't retain workers.

"Those are the professionals who are not here and are leaving because they cannot afford a home," she said.

Tavares said it was time for the county to step in and mandate affordable housing.

"The market has not provided the housing we need for our working, professional people," she said. "All these years, the market has had a chance to do it, and we're still waiting."

Council Member Mike Molina said the policy had been "tainted with the politics of a mayoral race."

While he personally would have liked to postpone a vote until after Tuesday's election, he said the policy should be tested in real life.

"I support putting this legislation into play and then we'll see what happens," he said.

Housing Chairman Danny Mateo, who shepherded the policy through his Housing and Human Concerns Committee, said the policy was "but the first step"

The bill had been drafted with extensive input from the development, real estate and business communities, he said, but the same organizations were now warning the policy could lead to dire consequences.

"How absolutely pathetic," he said.

Mateo said naysayers represented "special interest groups."

"Let's make that statement loud and clear," he said. "Our residents, our people are our priority."