Aloha Committee Chair, Vice Chair, and Committee Members,
My name is Leilani Pulmano. I was on the Board for Hawaii Housing Finance Development Corporation (HHFDC) for eight years with three of those years as the Chair. I am currently a Board member on the Hawaii Public Housing Authority (HPHA). My testimony is based on my experience as a Board member and reflects my individual opinions on this legislation.
First, HUD and HPHA have policies regarding mix income projects and communities removing the perception of concentrated poverty housing. The deletion of the “Above-moderate income” category reduces the range of incomes for projects.
Second, mix income projects with a higher income range allows for the flexibility of developers to reach lower income brackets while still ensuring that a project is financially feasible. This is known as income averaging. As you know, any project that is not financially feasible will not go forward. The deletion of the “Above-moderate income” category removes this flexibility.
Third, a lot of government funding is available for projects that provide housing for families that earn 60% or below of Area Median Income (AMI). Most of the HHFDC funding focuses on projects in this income category. I am not aware of any funding that provides for families earning 80% - 100% or even to 120%, and more so 140% of AMI. These families have no opportunity for financial assistance to rent or purchase a home, except for this housing policy requirement. It’s important to note that these families are providing a large share of taxes that, in part, support the government funding for housing families that earn 60% or below of AMI. The deletion of “Above-moderate income” category provides no opportunities for families earning more than 120% of AMI as part of this County’s housing policy.
Fourth, in Section 2.96.040 C. Income Group Distribution, with the deletion of “Above-moderate income” category, how does it affect the ownership units distribution requirements? And, in that same Section, is the intent for a third of the rental units for “moderate income” residents only to be single-family units?
Lastly, the longer offer periods adds financing costs. Take for example Kaiaulu O Kupuohi (the Star Noodle Project) in Lahaina that the County provided $6M from the Affordable Housing Fund (AHF). By the time, the project is built the financed portion of the project cost could be as high as $60M. At 3% interest, which is the interest rate for the AHF Loan, just the finance cost for a $60M loan is $4,932 per day. The additional 90 days of offer period could add $443,888 in financing cost. In a LIHTC project, every cost item matters and makes or breaks a project.
I would encourage the Committee to look at amendments that would incentive developers to provide housing that you are seeking.
My name is Noelani Hessler and I am a Kama`aina of Hamakuapoko ahupua'a. I wanted to voice my concerns on the HRS AH-16 Bill by Council member Mr. Molina. I agree with him and believe you should vote yes to this bill. I believe that 75% of units in an affordable development should have to be affordable and is the fairest instead of the 50% or especially the little 25% that it is today. If these subdivisions and community projects are truly 201H projects with HUD benefits designed for the workforce then they should be majority workforce housing. These are the subdivisions most developers only agree upon building to benefit themselves on their other higher end developments they already have in the works and for tax breaks. Why do they deserve 50% of occupancy to be full priced after getting huge discounts on the exemptions they have saved on the development for already being a HUD project? The whole project should be seen as an affordable housing development in my eyes; that's the reason why they get fast-track approval and exempt from planning, environmental laws as well as exemptions for zoning reasons. That should all be taken into consideration. Also, looking at the top ten jobs in Maui placed by our true workforce community; we make between $30,000 to $50,000 a year, even some with two incomes; like myself. All these positions still do not qualify for these affordable Housing projects. I have a good professional job in archaeology here in Maui. Born and raised here my entire life and still cant afford anything on this market. The smallest cheapest option on all of the affordable housing projects on this island I barely qualify since majority are lotteries with not enough homes to supply the list of people who signed up for them in the first place, and on top of it, the average cheapest option is $555,000. That is hard to qualify for many professional working class people. I see it as unfair and fixed advantage for the rich who are moving here from the mainland to escape the pandemic. It is not helping the local workforce community. Please vote yes to Mr. Molinas 201H bill and consider reducing the AMI to nothing over 100%, You need to serve the individuals who are making 50,60, and 80% of the AMI more then ever! Otherwise soon in time there will be no middle working class who keep this community together and moving. We will all have to move away, off island to places that can support us more. Thank you for listening and understanding.
Aloha Committee Chair, Vice Chair, and Committee Members,
My name is Jason Economou, and I am Government Affairs Director for the REALTORS Association of Maui (RAM). I am submitting this testimony on behalf of RAM, and its 1,700+ members in opposition to agenda items AH-16.
As was the case with AH-15, RAM also strongly opposes further legislative action regarding AH-16 for several reasons. Once again, the first reason is that the County has Jeff Gilbreath and Hawaiian Community Assets working on a new Affordable Housing Plan, and this Committee should wait for that plan before considering any major changes to housing policy. Arguably, the changes proposed by AH-16 are far greater than those proposed in AH-15, so it is even more important not to rush them through. It is better to wait and make well informed evidence-based modifications to the County Code, rather than rushing into legislation for the sake of legislation. Also, you’ve already paid for a plan so you might as well wait and see what it says.
Aside from timing, there are also flaws in this legislation that would make it inadvisable to move forward. For instance, AH-16 removes housing for the 121-140% AMI group from the definition of “residential workforce housing units.” Removing housing units for this income group from the definition is unnecessary and irresponsible. People in the gap income level of 121-140% AMI are our working class families that may be able to qualify to purchase an affordably priced home, but unlikely to be able to afford a market rate home. RAM has been tracking housing affordability on Maui for many years now, and I can assure you that people in the “above moderate income” are not thriving in this housing market and still need assistance. According to our data, a household making 100% AMI is only making 46% of what is necessary to qualify for a median-priced home under current prevailing interest rates. This means that a household making 120-140% AMI is still making far less than what is necessary to qualify for a median-priced home right now. By cutting this group out of the definition of “residential workforce housing,” you are removing a major incentive for developers to provide housing to that income group. Without such an incentive, people in this income group will be further eliminated from our housing market. Cutting these people out of the affordable housing market does not make it any more likely for lower income households to be able to qualify for affordable housing, it only ensures that people in the 121-140% AMI (i.e. nurses, teachers, firefighters) will be unable to afford any housing.
In addition to not abandoning those in the 121-140% AMI range, we would also advise against removing townhomes and multi-family housing units from the definition of “residential workforce housing” unless they are sold or rented to families making 100% AMI and below. From a policy perspective, this is a departure from the growing body of guidance that supports moving towards increased density and mixed-use development. Also, this will once again remove incentives for the development of affordable housing for those making above 100% AMI, which is a group that still needs immense help if they are to participate in the housing market. In the past 5 years, there have been less than 500 “residential workforce housing” units completed for any income level under 2.96, so why cut out a potential source of housing for everybody making between 101-140% AMI? This will not help our housing crisis.
Concerning the extension of wait-list offer periods, I strongly encourage the Committee to consider potential unintended consequences, and how to mitigate those consequences. Admittedly, extending the wait-list offer period could provide real benefits to consumers and allow increased housing opportunities for those who need housing most. Notwithstanding, there are some downsides. One such downside is that holding/carrying costs are some of the highest expenses in development, and extending the offer periods will create a situation that highly favors larger developers. The “little guy” local developer will not be able to absorb the cost of holding on to a property as easily as major development firms that might be based on Oahu or the mainland. The result is more work for developers and crews shipped in from elsewhere, and reduced economic benefit from development here in Maui County.
For the foregoing reasons, I strongly urge you not to move forward with the proposed amendments outlined in AH-16. Doing so would not increase affordable housing production on Maui, and it will potentially be harmful to our working class residents. Should this legislation move forward, RAM will continue to oppose it strongly.
Mahalo,
Jason A. Economou
Government Affairs Director
REALTORS Association of Maui
Testimonies received from AH Committee
Aloha Committee Chair, Vice Chair, and Committee Members,
My name is Leilani Pulmano. I was on the Board for Hawaii Housing Finance Development Corporation (HHFDC) for eight years with three of those years as the Chair. I am currently a Board member on the Hawaii Public Housing Authority (HPHA). My testimony is based on my experience as a Board member and reflects my individual opinions on this legislation.
First, HUD and HPHA have policies regarding mix income projects and communities removing the perception of concentrated poverty housing. The deletion of the “Above-moderate income” category reduces the range of incomes for projects.
Second, mix income projects with a higher income range allows for the flexibility of developers to reach lower income brackets while still ensuring that a project is financially feasible. This is known as income averaging. As you know, any project that is not financially feasible will not go forward. The deletion of the “Above-moderate income” category removes this flexibility.
Third, a lot of government funding is available for projects that provide housing for families that earn 60% or below of Area Median Income (AMI). Most of the HHFDC funding focuses on projects in this income category. I am not aware of any funding that provides for families earning 80% - 100% or even to 120%, and more so 140% of AMI. These families have no opportunity for financial assistance to rent or purchase a home, except for this housing policy requirement. It’s important to note that these families are providing a large share of taxes that, in part, support the government funding for housing families that earn 60% or below of AMI. The deletion of “Above-moderate income” category provides no opportunities for families earning more than 120% of AMI as part of this County’s housing policy.
Fourth, in Section 2.96.040 C. Income Group Distribution, with the deletion of “Above-moderate income” category, how does it affect the ownership units distribution requirements? And, in that same Section, is the intent for a third of the rental units for “moderate income” residents only to be single-family units?
Lastly, the longer offer periods adds financing costs. Take for example Kaiaulu O Kupuohi (the Star Noodle Project) in Lahaina that the County provided $6M from the Affordable Housing Fund (AHF). By the time, the project is built the financed portion of the project cost could be as high as $60M. At 3% interest, which is the interest rate for the AHF Loan, just the finance cost for a $60M loan is $4,932 per day. The additional 90 days of offer period could add $443,888 in financing cost. In a LIHTC project, every cost item matters and makes or breaks a project.
I would encourage the Committee to look at amendments that would incentive developers to provide housing that you are seeking.
Mahalo,
Leilani Pulmano
Hello,
My name is Noelani Hessler and I am a Kama`aina of Hamakuapoko ahupua'a. I wanted to voice my concerns on the HRS AH-16 Bill by Council member Mr. Molina. I agree with him and believe you should vote yes to this bill. I believe that 75% of units in an affordable development should have to be affordable and is the fairest instead of the 50% or especially the little 25% that it is today. If these subdivisions and community projects are truly 201H projects with HUD benefits designed for the workforce then they should be majority workforce housing. These are the subdivisions most developers only agree upon building to benefit themselves on their other higher end developments they already have in the works and for tax breaks. Why do they deserve 50% of occupancy to be full priced after getting huge discounts on the exemptions they have saved on the development for already being a HUD project? The whole project should be seen as an affordable housing development in my eyes; that's the reason why they get fast-track approval and exempt from planning, environmental laws as well as exemptions for zoning reasons. That should all be taken into consideration. Also, looking at the top ten jobs in Maui placed by our true workforce community; we make between $30,000 to $50,000 a year, even some with two incomes; like myself. All these positions still do not qualify for these affordable Housing projects. I have a good professional job in archaeology here in Maui. Born and raised here my entire life and still cant afford anything on this market. The smallest cheapest option on all of the affordable housing projects on this island I barely qualify since majority are lotteries with not enough homes to supply the list of people who signed up for them in the first place, and on top of it, the average cheapest option is $555,000. That is hard to qualify for many professional working class people. I see it as unfair and fixed advantage for the rich who are moving here from the mainland to escape the pandemic. It is not helping the local workforce community. Please vote yes to Mr. Molinas 201H bill and consider reducing the AMI to nothing over 100%, You need to serve the individuals who are making 50,60, and 80% of the AMI more then ever! Otherwise soon in time there will be no middle working class who keep this community together and moving. We will all have to move away, off island to places that can support us more. Thank you for listening and understanding.
Mahalo Nui,
Noelani Hessler
Aloha Committee Chair, Vice Chair, and Committee Members,
My name is Jason Economou, and I am Government Affairs Director for the REALTORS Association of Maui (RAM). I am submitting this testimony on behalf of RAM, and its 1,700+ members in opposition to agenda items AH-16.
As was the case with AH-15, RAM also strongly opposes further legislative action regarding AH-16 for several reasons. Once again, the first reason is that the County has Jeff Gilbreath and Hawaiian Community Assets working on a new Affordable Housing Plan, and this Committee should wait for that plan before considering any major changes to housing policy. Arguably, the changes proposed by AH-16 are far greater than those proposed in AH-15, so it is even more important not to rush them through. It is better to wait and make well informed evidence-based modifications to the County Code, rather than rushing into legislation for the sake of legislation. Also, you’ve already paid for a plan so you might as well wait and see what it says.
Aside from timing, there are also flaws in this legislation that would make it inadvisable to move forward. For instance, AH-16 removes housing for the 121-140% AMI group from the definition of “residential workforce housing units.” Removing housing units for this income group from the definition is unnecessary and irresponsible. People in the gap income level of 121-140% AMI are our working class families that may be able to qualify to purchase an affordably priced home, but unlikely to be able to afford a market rate home. RAM has been tracking housing affordability on Maui for many years now, and I can assure you that people in the “above moderate income” are not thriving in this housing market and still need assistance. According to our data, a household making 100% AMI is only making 46% of what is necessary to qualify for a median-priced home under current prevailing interest rates. This means that a household making 120-140% AMI is still making far less than what is necessary to qualify for a median-priced home right now. By cutting this group out of the definition of “residential workforce housing,” you are removing a major incentive for developers to provide housing to that income group. Without such an incentive, people in this income group will be further eliminated from our housing market. Cutting these people out of the affordable housing market does not make it any more likely for lower income households to be able to qualify for affordable housing, it only ensures that people in the 121-140% AMI (i.e. nurses, teachers, firefighters) will be unable to afford any housing.
In addition to not abandoning those in the 121-140% AMI range, we would also advise against removing townhomes and multi-family housing units from the definition of “residential workforce housing” unless they are sold or rented to families making 100% AMI and below. From a policy perspective, this is a departure from the growing body of guidance that supports moving towards increased density and mixed-use development. Also, this will once again remove incentives for the development of affordable housing for those making above 100% AMI, which is a group that still needs immense help if they are to participate in the housing market. In the past 5 years, there have been less than 500 “residential workforce housing” units completed for any income level under 2.96, so why cut out a potential source of housing for everybody making between 101-140% AMI? This will not help our housing crisis.
Concerning the extension of wait-list offer periods, I strongly encourage the Committee to consider potential unintended consequences, and how to mitigate those consequences. Admittedly, extending the wait-list offer period could provide real benefits to consumers and allow increased housing opportunities for those who need housing most. Notwithstanding, there are some downsides. One such downside is that holding/carrying costs are some of the highest expenses in development, and extending the offer periods will create a situation that highly favors larger developers. The “little guy” local developer will not be able to absorb the cost of holding on to a property as easily as major development firms that might be based on Oahu or the mainland. The result is more work for developers and crews shipped in from elsewhere, and reduced economic benefit from development here in Maui County.
For the foregoing reasons, I strongly urge you not to move forward with the proposed amendments outlined in AH-16. Doing so would not increase affordable housing production on Maui, and it will potentially be harmful to our working class residents. Should this legislation move forward, RAM will continue to oppose it strongly.
Mahalo,
Jason A. Economou
Government Affairs Director
REALTORS Association of Maui