Mayor veto: Housing proposal 'overly ambitious'

The Maui News
Saturday, November 25, 2006
By CLAUDINE SAN NICOLAS, Staff Writer

WAILUKU - As promised, Mayor Alan Arakawa vetoed a residential work force housing policy Friday that proposed requiring as much as 50 percent affordable units in future developments.

"Structurally, I find the proposal to be thorough and workable," Arakawa wrote in a veto message sent to Maui County Council Chairman Riki Hokama. "The problem I have with the measure is that it is overly ambitious and too focused on restrictions. As written, this measure could very likely result in a net reduction in affordable housing being built, and it could significantly cool our strong economy."

Arakawa said the policy, passed unanimously by the County Council earlier this month, could be fixed by dropping the proposed requirements of between 40 percent and 50 percent to a "doable" 20 percent to 30 percent range.

"Most of the industry has stated publicly that it can live with this bill if the requirements were reduced," Arakawa wrote. He said he vetoed the bill to give the council "another opportunity to make adjustments that will result in a win-win scenario. We need a housing policy that will allow us to build affordable homes and keep our economy moving forward."

Mayor-elect Charmaine Tavares, who was contacted on the Mainland by telephone, said she and other council members expected Arakawa's veto and were prepared to meet and act on it.

"I think the council will override it," she said.

Tavares said she did not believe the County Council would amend the housing policy after its override of the mayor's veto. During the Housing Committee deliberations, Tavares had suggested an affordable requirement of as much as 80 percent in future developments.

"I really still feel that 30 percent is too low," she said Friday in commenting on Arakawa's suggestion of a 20 percent to 30 percent affordable range.

Housing Committee Chairman Danny Mateo, who could not be reached for comment Friday, had expressed shortly after the council's vote Nov. 3 his own confidence in a veto override.

Council members have been studying the issue for approximately 18 months and when they approved it, they called the measure an important step in providing more housing for local residents.

Arakawa pointed out that the bill's opponents, including private developers, the Maui Chamber of Commerce and Hawaii's two top economists, have spoken out against the proposed ordinance.

Economists Leroy Laney and Paul Brewbaker both charged that the proposed policy tries to fix a problem caused by restrictions on housing development by applying even more restrictions.

According to Arakawa, some of the bill's opponents have threatened to challenge the bill's legality.

"The purpose of Bill 57 is to create housing our residents can afford, not to create confrontation. You cannot force anyone to build a subdivision. If you take all the incentive away, our builders are likely to invest elsewhere," he said.

The policy requirements approved by the County Council 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 policy 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.

Developers also would have the option of paying fees to fulfill the housing requirement. Fees would be calculated at 30 percent of the value of market-priced homes in the development.

Arakawa said he believes the proposal goes against the idea of encouraging developers to build affordable homes. He said there are "more than enough" affordable homes already in the pipeline to cover the county's needs.

"I fear that this policy could stop that progress before those homes are built," he said.

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