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Affordable Housing Struggles to Compete in a Rising Housing Market

Affordability is a major issue for Maui’s workforce. “… opposition to growth has stopped even low-cost, subsidized, affordable housing projects.”

August 1, 2013
Tom Blackburn-Rodriguez - Contributing Writer ( , Maui Weekly

Kellie Pali-Cruz, a successful business owner and the mother of four children, worries about the lack of affordable housing for her family and friends.

"Many bright young adults are forced to move to the Mainland to seek opportunity and a real independent life," Pali-Cruz said. "My dearest friend never stepped foot on an airplane until she was a young mother she left for the Mainland in hopes to own her own home and raise a family. She is doing well, but misses her entire family here on Maui.

"Friends--and more importantly, family--talk about buying a house as something you do when you get old," Pali-Cruz said. "This is such a terrible mindset. In my opinion, this is due to limited affordable homes and the hardship of qualifying for a mortgage."

Article Photos

In the plantation era, affordable workforce housing came with the job. This unidentified man is standing on the steps of a home that was once part of the Kīhei plantation camp that grew up around the old wharf in North Kīhei, across the street from the ABC store (the Old Suda Store). At the camp, workers from Japan, Puerto Rico, Portugal, Hawai‘i and the Philippines lived together. It was one of the few “mixed” camps on Maui.
Photo: Bishop House Museum

Pali-Cruz is not alone in her concerns.

The County Council adopted the Maui Island Plan (MIP) on Dec. 28, 2012. The plan's housing section in Chapter 5 reports that Maui residents pay a greater share of their income for housing than almost anywhere else in the U.S. It goes on to say that home ownership on Maui remains very unaffordable as compared to the national average, the median price for single-family homes and condos, whether new or existing, has been exceeding what people can afford, and the homeownership rate for Maui is significantly lower than the rest of the nation.

The Maui County Committee on Housing, Human Services and Transportation, chaired by Councilmember Stacy Crivello, is responsible for oversight of the county's affordable housing programs and policies.

In Crivello's view, "Housing acquisition by the majority of Maui County residents is minimal."

Her committee will review the current Residential Workforce Policy, which is due every two years. That review/report, which may be presented to the council in August, is expected to provide the council with the status of the housing policy and provide information on affordable housing acquisitions, developments and applications.

In 2006, voters approved a charter amendment authored by then-Councilmember Mike Molina that set aside 2 percent of real property tax revenues for affordable housing efforts. Since then, a total of $30,498,670 has been set aside beginning in July 2007 and including the county's recently passed 2014 fiscal year budget.

According to Maui County Budget Director Sandy Baz, " considering that we appropriated over $30 million in the last seven years and only $16 million, minus the current year's projects, is left, there have been a lot of projects completed. Old data [from about a year-and-a-half ago] showed 250 units produced."

Jo-Ann Ridao is the director of the Department of Housing and Human Concerns (DHHC). According to information provided to the Maui Weekly, the department has supported 16 projects totaling $15 million since first receiving the 2 percent property tax set aside.

Translated into human terms, this means that an estimated 384 families have been assisted since funding became available in July 2007.

Ridao noted, "This figure includes families assisted with housing projects completed and to be completed, families assisted with renovations, and families and individuals assisted with special-needs housing/programs."

Of the DHHC projects funded, 52 were for special-needs housing, including those for senior housing projects, and programs for the intellectually and developmentally challenged. The balance of 332 is for low-income families who were assisted with homeownership, rental housing, and renovations to both owned and rental housing projects.

The upcoming committee and council review will provide an opportunity for comment on the affordable housing legislation that passed under the leadership of former Councilmember Danny Mateo. The measure was vetoed by Mayor Alan Arakawa during his first term, but was passed unanimously by the full council over the mayor's veto.

The ordinance is still the subject of controversy.

"Maui Tomorrow Foundation considers the Residential Workforce Housing Ordinance one of our major accomplishments," said Richard Michaels.

Michaels, who chaired the Maui Tomorrow Affordable Housing Committee, was a member of the Maui Nui Housing Task Force (MNHTF) started in 2005 by Maui County Council Chair Gladys Baisa when she was the executive director of Maui Economic Opportunity. The task force was created to advocate for affordable housing development with the goal of "Affordable Housing Now" and a 10-point program for accomplishing that goal.

Others, such as local contractor Tom Cook, said the workforce policy had good intentions, but caused unintended and regressive outcomes. Cook was also a member of MNHTF

In an opinion shared by others in the development community who were interviewed for this article, Cook said, "Unfortunately, in my opinion, the focus of the legislation was more on how to get developers to fund/subsidize housing costs rather than addressing Maui's land use laws and regulations that place a high hurdle/cost to getting land entitled to build. And the opposition to growth has stopped even low-cost, subsidized, affordable housing projects "

Commenting on the state of affordable housing today, Cook said, "We have prices coming down drastically, but because of banks tightening lending standards and appraisal companies being overly conservative, few could take advantage of lower cost. People who want to preserve Maui keep up their opposition to virtually all projects. I believe this is ensuring only the rich will be able to live here."

Known as the Hansen 'Ohana, Bob Hansen, his wife, Donna, and their family are successful realtors on Maui. The Hansens donated significant funding in 2006 as part of the effort to help start Na Hale O Maui (NHOM), an affordable housing land trust that has placed 20 individuals and families in affordable homes, with four more currently in closing.

Hansen firmly believes that the solution to affordable housing is contained in the NHOM model.

"So far, the most viable method to date in creating affordable housing in perpetuity is the land trust method," said Hansen.

The innovative method allows NHOM to keep the land, sell the home and lease the land on a long-term, renewable, sustainable and affordable basis.

NHOM Executive Director John Andersen, an expert on the Maui housing market, provided the following perspective: "Early last year, the bottom of the downturn was hit and the rebound in home prices began. Today, the market has very little inventory available and prices are rising rapidly. Maui's home prices have rebounded strongly and have risen 20 percent in the last year. Coupled with the dramatic increase in interest rates that started a few weeks ago, affordability is once again a major issue for Maui's workforce."

Andersen also sees a need to improve the county's affordable housing ordinance.

"The county's Residential Workforce Housing Policy needs a substantial overhaul to make it work," said Anderson. "Hardly any units for the new construction of affordable homes have been created since the County Council passed the inclusionary zoning policy in the legislation. It was well intended, but unrealistic in the percentage of units that must be built as 'affordable' for 'for-profit' developers to pencil out to make even a modest return on their investment."

"The bright spot of county policy for affordable housing is the Affordable Housing Fund that comes from property tax collections," said Anderson. "NHOM has been awarded grants from that fund, and has successfully used them to acquire and rehabilitate abandoned, foreclosed homes for sale to income-qualified families. Other nonprofits have been awarded grants and many affordable units have been created with this funding."

Mateo agrees that a housing policy review is needed and that's why the council mandated the review process of the housing policy legislation it passed.

"We should have learned by now that both the housing policy and the county's permitting process must work hand in hand to support the overall objective of getting affordable units built," Mateo said. "One must support the other, and we need to champion the cause of moving development forward that comes with the commitment of affordable housing units for our county's workforce. We must hold the developer accountable for representations and promises made to the people of Maui County, and the county must do what it can to remove obstacles and barriers so affordable units may be build on a timely basis."

The ongoing issue of affordable housing on Maui is part of a larger national trend that shows a decline in the economic status of the middle class. The lack of affordable housing reduces job opportunities, suppresses property tax revenue, sends some of Maui's best and brightest off-island to live, and damages the social structure of small towns, neighborhoods, families and friends that should bring us together and give our communities strength.

Sherri Dodson, executive director of Habitat for Humanity, summed it up this way: "Affordable housing is still sorely needed in Maui County. The Residential Workforce Ordinance has made a small difference, but overcrowding, high rent and homelessness still exist."

That is a hard reality that MEO CEO Lyn McNeff, would second. "We projected that we would serve 104 families with the County of Maui rental assistance funds from July 1, 2012, to June 30, 2013. Instead, we served 188 families."

For more information on Maui's affordable housing, contact the County Council's committee on Housing, Human Services and Transportation at and click on "Council Committees," call (808) 270-7838, or email

Editors note: Tom Blackburn-Rodriguez was the staff director of the Maui Nui Housing Task Force while employed at MEO, the co-chair of the 2 percent affordable housing property tax set-aside campaign and he is the founding president of the Na Hale O Maui affordable housing land trust.



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