Bill 107 would change the Area Median Income price guidelines for affordable housing so sales price will be calculated based on total housing costs capped at 31% of gross annual income.  This measure brings the Maui rules into alignment with the rules of other countys. Maui is currently the only county NOT including all of the fees in their home price valuations.   

This Bill would bundle total housing costs to include principal, interest, taxes, insurance, private mortgage insurance, and homeowner’s association dues.  The changes would result in a 22% decrease in affordable housing sales prices, according to Linda Munsell, deputy director of the county’s Housing and Human Concerns Department.

However, the department recommended a different route and cautioned the council to consider where the 22% will come from. 

So far the Builders and lobbyists are the ones complaining about the rule change, it would mean thinner profit margins for them. However, this Bill is better for the Homebuyer. 

Workforce Housing does not always mean Affordable Housing. Under the rules, maybe only 30 percent of these homes built will be available to people making under 100 percent AMI (Area Median Income). 

Workforce Housing does not always go to Local Families. One of the biggest problems of workforce housing is that most will be sold to mainlanders who just moved here. Local families have a hard time qualifying for a mortgage. So the homes go to better-qualified applicants, typically mainland transplants. The rules can also be manipulated, for example, by businessmen who can manipulate their incomes to meet the qualification criteria, and buy workforce housing as an investment, this keeps homes out of the hands of the truly needy local families. 

Unethical behaviors: Even well-to-do Maui politicians have been busted buying affordable housing, as was a case in 2016 that brought up ethics violation charges.   

Corruption in the Affordable Housing sector:  An Oahu civil servant was recently fined for taking 2 million dollars of Bribes to distribute Affordable Housing Credits.   

Affordable Housing Credits: in order to stimulate the building of affordable workforce housing, a credit system was established that is used by builders. The rules allow builders to trade these credits to meet minimum workforce housing requirements. However this system has its drawbacks, Credit trading has allowed builders in affluent areas to outsource their workforce housing to cheap land, which tends to stratify communities, and alienate the workforce. Often placing workers far from their workplaces, as well as grouping all the workforce housing together in low-income areas, and in some cases, in high-risk areas such as flood zones. 

Affordable Housing Limitations:  unfortunately the workforce housing rules allow for affordable homes to revert to market-priced. So the benefits to the community are short-lived.  Also, this makes it virtually impossible to fill the backlog of needed affordable housing. According to the rules Affordable housing may only remain affordable for 5-10 years according to income group. 

It is estimated that Maui County needs about 10,000 affordable homes. However, this is on an ongoing basis. But with affordable homes being built and then reverting to market-priced that number is never reached, This creates a perpetual cycle of housing deficits. and this also keeps home prices higher.  This is a vicious cycle of keeping home prices far out of reach of local Maui Families. 

Is the current system working? Yes and No. The answer is complicated. Under the current rules, many builders are jumping on the workforce housing bandwagon. There are currently 36 projects identified by the County for fast-tracking, and these make up approximately 2,500 house-units.  This is fully one-quarter of the housing need. But as these projects age-out they fall away from the inventory. 

Who is building this housing? The Maui housing rules create a lucrative opportunity for builders and developers, many of Maui’s projects are being proposed and created by mainland and foreign companies.  Some by smaller local builders (mostly for-profit construction companies), and a few non-profit builders. 

Is building affordable rentals better than building affordable housing? The benefit of affordable rentals is that they stay affordable for 30 years from initial occupancy, and they help with the lack of affordable rental options. They also are a necessary stepping stone for families to get ahead financially and perhaps save for a deposit for a home purchase in the future.  Many people will never buy a home, for example, retirees, and the underemployed.  So affordable rentals give them some security and protection from the price gouging and extreme rent hikes that are affecting our county. 

Can Workforce Housing be made affordable in perpetuity? The short answer is Yes. Individual projects can specify their own “deed restrictions”. Deed restrictions determine what can be done with the property. Adding an ” affordable in perpetuity clause” is one option that can be explored.  However, it would benefit the community if the affordable housing rules were amended to make all affordable housing, affordable housing in perpetuity.  This would help to keep speculators out of these homes, and ensure that the backlog of workforce houses was cleared. 


Who can Afford an Affordable Home, and What is your Income Group?

Residential workforce housing unit – A unit or lot sold or rented to residents within one of the
following income groups as established by the Department of Housing and Human Concerns:
1. Very low income – Gross annual family income is 50% or less of area median income (AMI).
2. Low income – Gross annual family income is 51% to 80% of AMI.
3. Below moderate income – Gross annual family income is 81% to 100% of AMI.
4. Moderate income – Gross annual family income is 101% to 120% of AMI.
5. Above moderate income – Gross annual family income is 121% to 140% of AMI.

What is the Area Median Income (AMI)?

Median family income – Middle income in a series of incomes ranked from smallest to largest as
determined by HUD (United States Department of Housing and Urban Development) for the County,
or as adjusted by the Department of Housing and Human Concerns for Hana, Lanai, and Molokai.

What interest rate will I be Paying? The County calculations are shown ranging from 4 percent to 8.75 percent

AREA MEDIAN INCOME MAUI (except Hana) May 1, 2022 :  $101,100.00

Read more about the Workforce Housing Rules: https://www.mauicounty.gov/DocumentCenter/View/110922/FactSheet_RWHP_20171107

Read the Affordable House Price Guidelines here: https://www.mauicounty.gov/DocumentCenter/View/133326/2022-Workforce-Housing—Affordable-Sales-Guidelines

How to calculate your Annual Income: https://www.hud.gov/sites/documents/DOC_35649.PDF

Despite pushback, new affordable sales price guides for Maui County advance