Council rejects veto, OKs housing policy

The Maui News
Wednesday, December 06, 2006
By CLAUDINE SAN NICOLAS, Staff Writer

WAILUKU - A new residential work force housing policy became law Tuesday after the Maui County Council unanimously overrode a veto by Mayor Alan Arakawa.

"This is the win-win situation that we all strive for," said Housing Chairman Danny Mateo, who got in the last word at a special meeting held Tuesday in Council Chambers to override the mayor's veto.

Members voting to override included Mayor-elect Charmaine Tavares, who will be responsible for implementing the new law when she takes office Jan. 2. She was joined by Council Chairman Riki Hokama and Council Members Michelle Anderson, Bob Carroll, Jo Anne Johnson, Dain Kane and Mateo. Council Members Mike Molina and Joe Pontanilla were excused.

Mateo quoted parts of Arakawa's veto message, including the mayor's comment that the proposed housing policy was "overly ambitious and too focused on restrictions."

"Perhaps, Mr. Mayor, the policy is ambitious because it had to be," Mateo said.

In his Nov. 24 veto message, Arakawa pointed out that Maui developers and Hawaii's top economists spoke out against the bill, predicting possible lawsuits and the termination of certain housing projects.

"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 wrote.

The Housing Committee began working on the residential work force housing policy 19 months ago, holding a series of hearings and study sessions on alternatives designed to promote development of affordable housing, including mandates for up to 80 percent of all new developments to be priced affordably.

The bill approved by the council establishes a 40 percent affordable requirement, with developments with higher-priced housing units required to have 50 percent of the units in an affordable range.

On Tuesday, nine of 11 individuals testifying on the override supported the council's policy.

For future developments in Maui County, the affordable requirements kick in for residential projects with five or more units, as well as hotel or time-share projects that generate three or more units.

As approved by the council, the policy mandates that 40 percent of all housing units in a project be priced in affordable ranges when other units are priced up to $600,000. For projects in which half of the units are priced at more than $600,000, the remaining 50 percent of the units must be priced in affordable ranges.

Johnson expressed concern Tuesday that the 50 percent requirement was overshadowing other components of the bill. For example, developers could satisfy the policy by providing land, partnering with a nonprofit organization to build the homes, or contributing a combination of land and cash.

While the legislation may not be perfect, she said the policy is workable, and developers planning more expensive housing projects have other options than the 50 percent build-out to fulfill the county housing policy mandates.

Anderson said data on current developments in Kihei and Wailea show more than 700 residential units are being built for high-end buyers and not for workers who live here. She said the housing market has yet to address the need for homes for working people who are at 80 percent of the median income and whose annual income is $52,000 or less.

She said she agreed with testimony about developers who have criticized the 50 percent requirement and the policy in general: "If you can't do it, aloha oe. Go someplace else."

She said she hopes that developers and other critics who have threatened to sue the county over the housing policy will "think twice" and "come to the table and be cooperative."

Council Chairman Riki Hokama said he has directed council staff to begin drafting incentives for developers who are contemplating affordable housing development. Some of the options being explored include providing property tax incentives, increasing densities in housing projects or providing density-related bonuses and establishing development standards for new affordable housing subdivisions.

Both council members and individuals testifying for the override Tuesday said the housing policy is only a beginning to creating affordable housing on Maui. Tavares said she's particularly concerned that small-business owners are reporting to her a loss in workers who cannot afford a home on Maui.

According to Tavares, six of 12 county engineer positions are currently vacant in one department and a seventh vacancy may be coming because the individual has indicated an interest in moving to the Mainland because of the high cost of housing here.

"This is a small, creeping, subliminal thing that's happening," Tavares said.

She said she hopes the affordable housing policy will help to "stem the tide." Tavares, who had suggested an 80 percent affordable housing requirement in future developments, urged critics of the new law "to please find a way to make it work."

She vowed that in her term as mayor, she would work with Mateo and other council members to create a credit-and-incentive package for developers willing to build affordable housing.

"It's a high-risk business, all of us know that," she said.