I am a resident of Hale Kaiola - the first 100% Workforce Housing Neighborhood entitled via MCC 2.97. The Code incentivized the developer, Alaula Builders, who cut corners, left residents with costly construction defects and ultimately disappeared.
At the time of application, our above-moderate unit was originally priced under $400,000 with a 5 year deed restriction pursuant to the MCC. However, developer negotiated a 20 year deed restriction with the county and raised the sales price at the time of purchase to $599,000 applying the 2021 Guidelines at 4% interest and a 5% down payment even though the 2022 guidelines were about to expire at the time we chose our unit.
Further, the developer failed to obtain FHA approval for the development due to the deed restrictions requiring 50% shared appreciation. To afford the 20% down payment on a conventional loan, we emptied a retirement account and borrowed more than the home was worth, effectively giving up the full re-sale value under the workforce housing guidelines.
My advice is to make sure 1) the builder actually delivers affordable workforce housing under the guidelines defined by the MCC, 2) provides quality construction that is up to code and industry standards, and 3) responds to requests to warranty concerns before solidifying proposed deed restrictions on the residents.
We cannot afford our mortgage and HOA fees totaling over $4400 a month, which is well over the 28% affordability cap. Had the system worked as I believe was intended intended by Maui County, the maximum home price of $530,400 under the correct 2022 Guidelines at 6% would have been affordable at $2,681.40 a month for principal and interest.
The key take away is that If the developer fails to deliver affordable housing, residents should not be forced into an unconscionable deed restriction. Perhaps you should start by addressing ways to ensure existing and potential residents are protected before discussing whether to raise the deed restrictions.
Aloha, my name is Mike Morris, and I live in one of the county’s workforce housing projects, Hale Kaiola in North Kihei. Many of my neighbors and I cannot be at today’s meeting because we are busy working — it’s called “workforce housing” for a reason.
We were initially told we would have a 10-year deed restriction and that was doubled to 20 years at the last minute. I am not aware of other projects with such a long, unrealistic timeframe.
If the deed restriction was an agreement to benefit the developer, it’s hurting the hard-working residents of Hale Kaiola — those who keep our island home up and running. We’re teachers, paramedics, business owners, electricians, and many more essential jobs.
While we’re grateful to own a home here on Maui, it has not been without significant obstacles the past two years. From unfulfilled promises to building issues to our monthly HOA fees doubling, the 40 local families who call Hale Kaiola home could use some good news and that can come in the form of reducing our 20-year deed restriction.
We would really like to change the narrative and see something positive and encouraging for our community. Mahalo for your help with changing our deed restriction!
I would encourage the county on all affordable housing, workforce and non-workforce that the restriction on value be forever.
If you take the definition of a local housing market, it would be local in nature with homes being built bought and sold at prices affordable to people in that community. This is the definition of a local real estate market free of outside influence.
Basically, housing prices are tied to wages a recent Maui housing study stated that wages on Maui justified a price for a home in the $400,000to $450,000 range. homes are actually selling at $1,200,000 to $1,300,000 which proves Maui’s housing market is distorted due to outside buyers.
It’s important to understand. Appreciation is not the reason we buy real estate. It is not the greatest creator of wealth In real estate. The greatest creator of wealth in real estate and the reason we buy real estate is the constant monthly payment. America’s 30 year mortgage using fixed rate payments locks in your biggest cost of living, housing , for 30 years and then the payment goes away. You’ve paid the loan off
By locking in the monthly payment you were able to save your pay raises and use that money to invest in stocks,bonds or your style of living. Possibly using the funds to start your own business pay for your children’s college education or help them buy a home. The key factor is we buy a property to lock in our monthly payment for the rest of our life.
rather than going forward, let’s go back in time in the 60s a home on Oahu would’ve cost $22,000 it would’ve cost you $59,000 to buy that property but the interest expense was only $30,000. Once the longest paid off you were able to live there with no mortgage payment the money you saved from pay raises and the money saved from not making mortgage payments are the greatest creator of wealth .
It is the advantage of homeownership
If you rented that property, you would’ve paid over $1 million in rent and have nothing to show for it. It’s important to understand. Appreciation should not be a major consideration in structuring a permanent way to keep our housing affordable the more important aspect is to keep the housing prices in line with the wages paid in the community
To accomplish this all affordable homes should have a deed restriction that requires the property to be re-sold not in an open market at a market price, but in an open market where the price is established by the increase in wages so if wages go up 20% the price of the home goes up 20%. The key to this program is, we need a mechanism to assure that the homes are resold to workers who live in work in the community.
To accomplish this, we simply need to have the restrictions we have on all affordable units, resident of Hawaii , 18 years of age ,do not own other real estate, but the two most important are they have to have an income restriction where income will not exceed a certain amount and also an asset restriction where the assets cannot exceed 20 or 30% of the price. most of our local buyers do not have large down payments so these restrictions should not be an issue or problem for them, but it should stop Mainland and foreign buyers from purchasing.
So by putting a deed restriction where properties will remain affordable forever. Basing the price increase , overtime ,to wages we have created a true local market. our workers and their families will be able to buy and sell a home at affordable prices forever. Once a home is in the affordable market, it will always be affordable to wagers in Hawaii. Remember local buyers are usually going to give the home to their children .
Again the buyers are losing appreciation or giving up some of their appreciation in return for a affordable hom.e that their families can afford to live in because we’ve controlled the price that means the property taxes are also reduced and should be increased and tied to wages.
Dont dwell on loss of appreciation because under the present program they can not afford to buy a home and have to rent or leave Hawaii. If they own a home taxes may increase and make ownership more difficult especially in e they retire .
The key to the success of this program is educating our buyers about why home ownership is important and how value is created. we all believe it’s appreciation but appreciation is what’s making our housing unaffordable, increasing our property taxes, and forcing our families to leave. We need a local market where our community can create wealth and thrive and do better than bing a renter . they will be owners in a controlled market. They cannot compete in the open market because prices are $1 million or more. they cannot afford the payments nor can they afford the property taxes.
This is a solution that would work and I would encourage maui county to be bold and innovative, and consider a unique solution that would allow our workers and their families to remain in Hawaii create wealth and thrive.
Peter savio
Aloha,
I am a resident of Hale Kaiola - the first 100% Workforce Housing Neighborhood entitled via MCC 2.97. The Code incentivized the developer, Alaula Builders, who cut corners, left residents with costly construction defects and ultimately disappeared.
At the time of application, our above-moderate unit was originally priced under $400,000 with a 5 year deed restriction pursuant to the MCC. However, developer negotiated a 20 year deed restriction with the county and raised the sales price at the time of purchase to $599,000 applying the 2021 Guidelines at 4% interest and a 5% down payment even though the 2022 guidelines were about to expire at the time we chose our unit.
Further, the developer failed to obtain FHA approval for the development due to the deed restrictions requiring 50% shared appreciation. To afford the 20% down payment on a conventional loan, we emptied a retirement account and borrowed more than the home was worth, effectively giving up the full re-sale value under the workforce housing guidelines.
My advice is to make sure 1) the builder actually delivers affordable workforce housing under the guidelines defined by the MCC, 2) provides quality construction that is up to code and industry standards, and 3) responds to requests to warranty concerns before solidifying proposed deed restrictions on the residents.
We cannot afford our mortgage and HOA fees totaling over $4400 a month, which is well over the 28% affordability cap. Had the system worked as I believe was intended intended by Maui County, the maximum home price of $530,400 under the correct 2022 Guidelines at 6% would have been affordable at $2,681.40 a month for principal and interest.
The key take away is that If the developer fails to deliver affordable housing, residents should not be forced into an unconscionable deed restriction. Perhaps you should start by addressing ways to ensure existing and potential residents are protected before discussing whether to raise the deed restrictions.
Thank you for your consideration.
Aloha, my name is Mike Morris, and I live in one of the county’s workforce housing projects, Hale Kaiola in North Kihei. Many of my neighbors and I cannot be at today’s meeting because we are busy working — it’s called “workforce housing” for a reason.
We were initially told we would have a 10-year deed restriction and that was doubled to 20 years at the last minute. I am not aware of other projects with such a long, unrealistic timeframe.
If the deed restriction was an agreement to benefit the developer, it’s hurting the hard-working residents of Hale Kaiola — those who keep our island home up and running. We’re teachers, paramedics, business owners, electricians, and many more essential jobs.
While we’re grateful to own a home here on Maui, it has not been without significant obstacles the past two years. From unfulfilled promises to building issues to our monthly HOA fees doubling, the 40 local families who call Hale Kaiola home could use some good news and that can come in the form of reducing our 20-year deed restriction.
We would really like to change the narrative and see something positive and encouraging for our community. Mahalo for your help with changing our deed restriction!
I would encourage the county on all affordable housing, workforce and non-workforce that the restriction on value be forever.
If you take the definition of a local housing market, it would be local in nature with homes being built bought and sold at prices affordable to people in that community. This is the definition of a local real estate market free of outside influence.
Basically, housing prices are tied to wages a recent Maui housing study stated that wages on Maui justified a price for a home in the $400,000to $450,000 range. homes are actually selling at $1,200,000 to $1,300,000 which proves Maui’s housing market is distorted due to outside buyers.
It’s important to understand. Appreciation is not the reason we buy real estate. It is not the greatest creator of wealth In real estate. The greatest creator of wealth in real estate and the reason we buy real estate is the constant monthly payment. America’s 30 year mortgage using fixed rate payments locks in your biggest cost of living, housing , for 30 years and then the payment goes away. You’ve paid the loan off
By locking in the monthly payment you were able to save your pay raises and use that money to invest in stocks,bonds or your style of living. Possibly using the funds to start your own business pay for your children’s college education or help them buy a home. The key factor is we buy a property to lock in our monthly payment for the rest of our life.
rather than going forward, let’s go back in time in the 60s a home on Oahu would’ve cost $22,000 it would’ve cost you $59,000 to buy that property but the interest expense was only $30,000. Once the longest paid off you were able to live there with no mortgage payment the money you saved from pay raises and the money saved from not making mortgage payments are the greatest creator of wealth .
It is the advantage of homeownership
If you rented that property, you would’ve paid over $1 million in rent and have nothing to show for it. It’s important to understand. Appreciation should not be a major consideration in structuring a permanent way to keep our housing affordable the more important aspect is to keep the housing prices in line with the wages paid in the community
To accomplish this all affordable homes should have a deed restriction that requires the property to be re-sold not in an open market at a market price, but in an open market where the price is established by the increase in wages so if wages go up 20% the price of the home goes up 20%. The key to this program is, we need a mechanism to assure that the homes are resold to workers who live in work in the community.
To accomplish this, we simply need to have the restrictions we have on all affordable units, resident of Hawaii , 18 years of age ,do not own other real estate, but the two most important are they have to have an income restriction where income will not exceed a certain amount and also an asset restriction where the assets cannot exceed 20 or 30% of the price. most of our local buyers do not have large down payments so these restrictions should not be an issue or problem for them, but it should stop Mainland and foreign buyers from purchasing.
So by putting a deed restriction where properties will remain affordable forever. Basing the price increase , overtime ,to wages we have created a true local market. our workers and their families will be able to buy and sell a home at affordable prices forever. Once a home is in the affordable market, it will always be affordable to wagers in Hawaii. Remember local buyers are usually going to give the home to their children .
Again the buyers are losing appreciation or giving up some of their appreciation in return for a affordable hom.e that their families can afford to live in because we’ve controlled the price that means the property taxes are also reduced and should be increased and tied to wages.
Dont dwell on loss of appreciation because under the present program they can not afford to buy a home and have to rent or leave Hawaii. If they own a home taxes may increase and make ownership more difficult especially in e they retire .
The key to the success of this program is educating our buyers about why home ownership is important and how value is created. we all believe it’s appreciation but appreciation is what’s making our housing unaffordable, increasing our property taxes, and forcing our families to leave. We need a local market where our community can create wealth and thrive and do better than bing a renter . they will be owners in a controlled market. They cannot compete in the open market because prices are $1 million or more. they cannot afford the payments nor can they afford the property taxes.
This is a solution that would work and I would encourage maui county to be bold and innovative, and consider a unique solution that would allow our workers and their families to remain in Hawaii create wealth and thrive.
Peter savio