Councilors find housing details hard to swallow

The Maui News
Thursday, September 13, 2007
By BRIAN PERRY, Assistant City Editor

WAILUKU - Maui County Council members balked Wednesday at readily accepting a low-income rental housing project aimed at meeting a Central Maui developer's quota of affordable homes.

With the support of county administration housing officials, Maui Lani Partners is using the state's fast-track housing law to shorten government reviews of a 72-unit low-income rental complex planned on 2.5 acres next to Pomaika'i Elementary School. Council members can accept the project as proposed, modify it with the developer's consent or reject it within 45 days of the proposal's submission on Aug. 24.

Maui Lani Partners also wants to count the units toward meeting a conditional zoning requirement to build 5 percent of its homes for rent or sale to families earning less than 80 percent of the federally set median income.

While Policy Committee members indicated Wednesday that they were eager to see much-needed, low-income rental housing, some councilors found it difficult to swallow the developer's efforts to soften the impact on the project's bottom line.

Council Member Michelle Anderson took offense at the developer's listed rental prices and to the partners' plan - 15 years after the project's construction - to make apartment units available for sale or rent to higher-income buyers and tenants.

"I think these rental figures are way off base," she told committee Chairman Danny Mateo, referring to monthly rents as high as $1,453 for a three-bedroom unit, not including utilities.

Anderson called for dropping prices $200 per month and maintained low-income residents (those making less than 80 percent of median income or about $55,920 for a family of four) should be able to afford the rental units in perpetuity. She said the proposed rents are out of reach for most Maui families, many with breadwinners earning incomes in low-paying service industry jobs.

Proposed rental prices ranged from $1,101 to $1,257 per month for a 860-square-foot, two-bedroom, one-bath unit, to $1,272 to $1,453 for a 939-square-foot, three-bedroom, two-bath unit.

"They can't afford this," Anderson said. "I think it's shibai, mister chairman. . . . It's absurd. I'm insulted that we've been given these figures."

Leiane Paci, a partner with Maui Lani Partners, told committee members the developer was not trying to skirt commitments to build affordable housing but was trying to have the project make economic sense.

"We came here in good faith," she said. "We saw an opportunity to build affordable homes."

Anderson dismissed Paci's economic arguments, saying the developer already had made money on market-priced units and had disclosed nothing to show a financial hardship.

Building the affordable apartments, even if done so at a loss, "is a small price to pay to get all that market housing," she said.

Council Member Jo Anne Johnson questioned the use of the state's fast-tracked affordable housing law, 201H, to seek approval for low-income units that also would be counted toward the developer's number of affordable units required under the project's conditional zoning.

The fast-track approval process, aside from getting an expedited 45-day review by the County Council, also provides for exemptions from county requirements, she said. In the case of Maui Lani, exemptions are being sought from impact fees, rezoning and Project District Phase II and III approval processes.

The savings provided by the exemptions "is of value, substantial value," Johnson said.

On the question of whether units should be kept affordable to low-income tenants in perpetuity, Johnson suggested Maui Lani sell the project to an agency such as Hale Mahaolu or Lokahi Pacific to manage it as a low-income housing project.

The rental complex proposal did get some support from committee members.

Council Member Joe Pontanilla said he's aware of people paying $1,100 per month for a one-room, one-bath rental. The prices proposed for the project "looks like a godsend for those individuals," he said.

Council Chairman Riki Hokama suggested modifying the project to make it more acceptable to council members, by among other things, requiring environmentally friendly features such as solar water heaters and toilets and faucets that use less water.

He said Maui residents need affordable housing sooner rather than later.

"It's to our residents' advantage to move forward," Hokama said.

Mateo secured agreement from Maui Lani to build 60 two-bedroom and 12 three-bedroom units and to have the rents include maintenance fees. But he was not able to get agreement to change the proposal's plans to make units available for sale or rent after 15 years.

"We are at an impasse at this point," he said.

So far, Maui Lani has finished 957 of what's eventually planned to be 3,700 homes in a massive expansion of Kahului. Of the finished homes, 224 have been sold at prices affordable to buyers with incomes ranging from 80 percent to 140 percent of federal median income guidelines.

That range covers 15 percent of the Maui Lani's and two of three income levels established as part of an affordable housing requirement attached to Maui Lani's 1990 project district zoning. The third category was a zoning requirement that Maui Lani make available 5 percent of its residences for sale or rent to families earning less than 80 percent of median income.

Mateo deferred action on the rental housing project until the committee's next meeting at 1:30 p.m. Sept. 18. He asked committee members to submit written proposals that could then be discussed with Maui Lani representatives.

Under the 45-days deadline to act on the proposal, the council has only until Oct. 8 to make a decision. If the council does not act to disapprove the project, it will be considered accepted.

Because of council schedules, the last practical day for action would be Oct. 5, according to Mateo.