HLU-10 Bill 37 (2026) BILL 37 (2026), TO ESTABLISH A REAL PROPERTY TAX EXEMPTION FOR RESIDENTIAL WORKFORCE HOUSING UNIT DEVELOPMENTS INTENDED FOR HOME OWNERSHIP (HLU-10)
TESTIMONY IN OPPOSITION TO BILL 37 (2026)
ESTABLISHING A REAL PROPERTY TAX EXEMPTION FOR RESIDENTIAL WORKFORCE HOUSING UNIT DEVELOPMENTS INTENDED FOR HOME OWNERSHIP
Housing and Land Use Committee
June 3, 2026
Aloha Chair, Vice-Chair Batangan, and Members of the Housing and Land Use Committee,
I submit this testimony in opposition to Bill 37 (2026) unless substantial amendments are adopted to ensure accountability, transparency, and measurable public benefit.
At its core, this bill proposes granting a real property tax exemption to developers of workforce housing projects. While increasing homeownership opportunities for local residents is a goal most of us share, the public deserves to know why another tax exemption is being proposed before the County has demonstrated whether previous housing incentives have produced meaningful results.
For decades, Maui residents have been told that the solution to the housing crisis is another subsidy, another exemption, another incentive, another density bonus, another waiver, or another special program for development interests. Yet despite years of these policies, housing prices continue to rise, homeownership rates continue to decline, and local families continue to leave Maui because they can no longer afford to live here.
Before granting additional tax relief to developers, the Council should first answer several basic questions:
* How many workforce housing units have been produced through existing County incentive programs?
* How many remain owner-occupied today?
* How many have since been sold at market prices?
* What is the total amount of County revenue previously forgone through housing-related exemptions and incentives?
* What measurable public benefit was achieved?
Taxpayers should not be expected to support additional exemptions without a clear accounting of the effectiveness of previous programs.
The larger concern is that Bill 37 places the financial burden on the public while providing benefits to private development interests without guaranteeing any specific outcome. Simply reducing a developer's tax obligation does not automatically create affordable housing. In many cases, it simply increases profitability.
The public is repeatedly told that government needs additional revenue to fund infrastructure, public safety, parks, roads, environmental protection, and housing initiatives. At the same time, homeowners continue to face increasing property assessments and higher tax bills. If property tax revenue is so critical to County operations, residents have every right to ask why the Council is considering exempting developers from those taxes while many homeowners struggle to remain in their homes.
The County has already recognized the financial pressure facing residents by increasing homeowner exemptions. Yet rather than continuing to prioritize resident homeowners, kūpuna, and working families, this bill would direct tax relief toward development interests first.
I believe the Council should be pursuing alternatives that provide direct and measurable benefits to residents rather than indirect benefits through developers.
Instead of providing tax exemptions to developers, the County should consider:
* Expanding homeowner exemptions for resident owners.
* Creating additional property tax relief for kūpuna.
* Providing targeted assistance to first-time homebuyers.
* Streamlining permit processing and reducing unnecessary delays.
* Investing in infrastructure improvements that benefit entire communities.
* Establishing performance-based incentives tied to completed and occupied housing units rather than promised units.
If the Council nevertheless chooses to advance this bill, several safeguards should be mandatory.
Any tax exemption should require:
* Owner occupancy requirements.
* Preference for Maui County residents.
* Long-term affordability protections.
* Annual public reporting.
* Independent auditing.
* Full transparency regarding recipients and project performance.
* Automatic repayment or clawback provisions if conditions are violated.
Without these protections, the County risks creating yet another program where public resources are committed with little accountability and uncertain results.
Maui's housing crisis did not emerge because developers lacked tax incentives. It emerged because of decades of regulatory delays, infrastructure limitations, high construction costs, speculative investment, housing conversions, and government policies that have failed to keep pace with community needs.
The solution is not simply another tax exemption.
The Council should focus first on improving permitting efficiency, expanding infrastructure capacity, protecting owner occupancy, reducing speculative pressures, and providing direct relief to resident homeowners who continue to bear the increasing costs of living on Maui.
For these reasons, I respectfully urge the Committee to reject Bill 37 in its current form or substantially amend it to ensure that any tax relief granted results in measurable, enforceable, and transparent public benefits for Maui residents.
TESTIMONY IN OPPOSITION TO BILL 37 (2026)
ESTABLISHING A REAL PROPERTY TAX EXEMPTION FOR RESIDENTIAL WORKFORCE HOUSING UNIT DEVELOPMENTS INTENDED FOR HOME OWNERSHIP
Housing and Land Use Committee
June 3, 2026
Aloha Chair, Vice-Chair Batangan, and Members of the Housing and Land Use Committee,
I submit this testimony in opposition to Bill 37 (2026) unless substantial amendments are adopted to ensure accountability, transparency, and measurable public benefit.
At its core, this bill proposes granting a real property tax exemption to developers of workforce housing projects. While increasing homeownership opportunities for local residents is a goal most of us share, the public deserves to know why another tax exemption is being proposed before the County has demonstrated whether previous housing incentives have produced meaningful results.
For decades, Maui residents have been told that the solution to the housing crisis is another subsidy, another exemption, another incentive, another density bonus, another waiver, or another special program for development interests. Yet despite years of these policies, housing prices continue to rise, homeownership rates continue to decline, and local families continue to leave Maui because they can no longer afford to live here.
Before granting additional tax relief to developers, the Council should first answer several basic questions:
* How many workforce housing units have been produced through existing County incentive programs?
* How many remain owner-occupied today?
* How many have since been sold at market prices?
* What is the total amount of County revenue previously forgone through housing-related exemptions and incentives?
* What measurable public benefit was achieved?
Taxpayers should not be expected to support additional exemptions without a clear accounting of the effectiveness of previous programs.
The larger concern is that Bill 37 places the financial burden on the public while providing benefits to private development interests without guaranteeing any specific outcome. Simply reducing a developer's tax obligation does not automatically create affordable housing. In many cases, it simply increases profitability.
The public is repeatedly told that government needs additional revenue to fund infrastructure, public safety, parks, roads, environmental protection, and housing initiatives. At the same time, homeowners continue to face increasing property assessments and higher tax bills. If property tax revenue is so critical to County operations, residents have every right to ask why the Council is considering exempting developers from those taxes while many homeowners struggle to remain in their homes.
The County has already recognized the financial pressure facing residents by increasing homeowner exemptions. Yet rather than continuing to prioritize resident homeowners, kūpuna, and working families, this bill would direct tax relief toward development interests first.
I believe the Council should be pursuing alternatives that provide direct and measurable benefits to residents rather than indirect benefits through developers.
Instead of providing tax exemptions to developers, the County should consider:
* Expanding homeowner exemptions for resident owners.
* Creating additional property tax relief for kūpuna.
* Providing targeted assistance to first-time homebuyers.
* Streamlining permit processing and reducing unnecessary delays.
* Investing in infrastructure improvements that benefit entire communities.
* Establishing performance-based incentives tied to completed and occupied housing units rather than promised units.
If the Council nevertheless chooses to advance this bill, several safeguards should be mandatory.
Any tax exemption should require:
* Owner occupancy requirements.
* Preference for Maui County residents.
* Long-term affordability protections.
* Annual public reporting.
* Independent auditing.
* Full transparency regarding recipients and project performance.
* Automatic repayment or clawback provisions if conditions are violated.
Without these protections, the County risks creating yet another program where public resources are committed with little accountability and uncertain results.
Maui's housing crisis did not emerge because developers lacked tax incentives. It emerged because of decades of regulatory delays, infrastructure limitations, high construction costs, speculative investment, housing conversions, and government policies that have failed to keep pace with community needs.
The solution is not simply another tax exemption.
The Council should focus first on improving permitting efficiency, expanding infrastructure capacity, protecting owner occupancy, reducing speculative pressures, and providing direct relief to resident homeowners who continue to bear the increasing costs of living on Maui.
For these reasons, I respectfully urge the Committee to reject Bill 37 in its current form or substantially amend it to ensure that any tax relief granted results in measurable, enforceable, and transparent public benefits for Maui residents.
Mahalo for the opportunity to testify.
Edward Codelia
Kula, Maui