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Friday, October 22, 2021
UHERO Looks at Maui County Plan to Impose $1.17B Tax Hike on Housing
By UHERO @ 2:42 AM :: 2458 Views :: Maui County, Taxes, Cost of Living

The Maui County Comprehensive Affordable Housing Plan: Understanding its Pros and Cons and Ideas for How to Improve it


from UHERO, October 21, 2021

A team of 19 planners, engineers, data and policy analysts, attorneys, and community development professionals has developed a comprehensive plan for the development of affordable housing in Maui County. The Maui County Comprehensive Affordable Housing Plan (“MCCAH Plan” or “the Plan”) is a major step forward in developing coherent strategies to address Maui County’s shortage of affordable housing for lower income households.

• The MCAAH Plan uses estimates from the 2019 Hawai‘i Housing Planning Study (SMS Research, 2019) to determine how much and what mix of housing is needed in Maui County.

• The Plan presents an ambitious road map for reforming Maui’s regulatory framework governing the development of affordable housing and proposes a goal of building 5,000 affordable units within five years of the Plan’s launch.

• The Plan identifies specific county-owned and state-owned land parcels on which 4,333 of the 5,000 affordable units would be built.

• The Plan identifies zoning and permit regulations and procedures that need to be streamlined and updated to facilitate timely completion of affordable housing projects.

• The Plan clearly identifies complementary infrastructure investments that should be made simultaneously to support the new affordable housing projects. The cost of the overall Plan is estimated to be $1.169 billion.

To support these expenditures, the Plan proposes substantial increases in real property taxes on non-owner-occupied residential properties and short-term vacation rental properties as well as a new form of assessment on developers of all other residential properties. It is estimated that $58 million in new annual tax revenue over a thirty-year period would be needed to service bonds sold by the county to finance housing and infrastructure construction and to support ongoing expenditures directed to mortgage subsidies and rental subsidies to support low-income households in buying or renting housing.

• We strongly suggest that a few key components of the Plan be modified to ensure its proposed “by right” regulatory framework for approving, planning, and developing land parcels with affordable housing does what the Plan’s authors intend: Increase the flow of new affordable housing units coming to market over the next 5-10 years.

We recommend two other substantial changes to the Plan to ensure that its execution does not impede the private development of housing. The changes are important because the housing needs of Maui’s lower income households can only be partially met by the additional affordable units to be developed by the County. Families across the Maui income spectrum need additional units to be brought to market by private landowners and developers.

• To accomplish this, we recommend that the “by-right” regulatory framework proposed in the Plan be extended to property owners remodeling existing multi-family units and to private development of new multi-family projects.

• We recommend that the County take a close look at project financing by reviewing the sources of tax revenues required for the project, restrictions on the use of bond revenues, and reconsider exactions from developers building market-rate units.

With these modifications, we conclude that the Plan provides a useful roadmap to developing affordable housing and easing the impact on lower-income households. The time frame for the Plan is ambitious but may be possible if the (suitably modified) up-front regulatory changes are enacted within the next 18 months.

read … Full Report  

UH News: UHERO guidance for more affordable housing in Maui County

PBN: UHERO report recommends changes to Maui affordable housing plan


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