Over 250 residents of Front Street Apartments in Lahaina received good news. Governor David Ige signed a bill to keep rents from increasing to market prices. Hawaii Finance and Development Corporation will begin negotiations with the Front Street Apartments owners in the hopes of acquiring the property.
Owners of the affordable housing apartments originally wanted to raise the rent rates to market value by August 2019. Hawaii Finance and Development Corporation (HHFDC) have put a hold until August 2020 for now while court proceedings filed by tenants are completed or until HHFDC can purchase the property.
HHFDC is undergoing the due diligence process for appraisal and funding of the apartments. Although the saga isn’t fully over, there is hope for the tenants that a solution is around the corner and that they will be able to maintain their residences.
Na Hale O Maui Affordable Housing blessing for the Westside project was attended by Bob Hansen who was one of the founding members of Na Hale O Maui and served on the Board for many years. Also shown is John Anderson who lead this project for ten years. Others in attendance included Athena Anderson, Donna Hansen and Kimokeo Kapahulelua, the Kahuna who blessed the breaking of ground.
The 118 Unit affordable housing project Kaiwahine Village was able to obtain financing. Hunt Capital Partners in partnership with Urban Housing Community LLC., will be the developers of the project.
The housing unit will be built in North Kihei for families earning 30 to 60 percent of the area median income for a family of four. The project is scheduled to provide both 2 and 3 bedroom units, centralized laundry facilities, a clubhouse, and courtyard. Non profit management will be partnered with Ikaika Ohana.
The goal is for the project to be completed in early 2020.
Council members voted in favor of 250 affordable housing units to be built within a 670 acre planned community to be located south of Maui Meadows. Moving from the original site in north Kihei should help Honua’ula Partners, the potential builders, to get the project started more quickly than originally anticipated.
Before any of the planned housing building can begin, Honua’ula Partners has a $30 million dollar project to complete first. The widening of Piilani Highway from Kilohana Drive to Wailea Ike Drive. Of the projected 250 affordable housing units, 125 will be ownership units and the remaining 125 will be rental.
We attended a recent economic report from Paul Brewbaker at the State of Hawaii 100 Top Realtors meeting on Maui in June.
At that meeting Mr. Brewbaker reported that Maui should fare well in home price increases over the next several years. He feels that price increases should be in the 7% to 10% range until at least the early 2020’s. As you recall we had unsustainable increases in prices in 2004, 2005 and 2006 which was over 20% per year. That is what creates a bubble.
Our current increases in prices at 7% to 10% are sustainable at least for the short term. This is especially true for Maui as the demand for new housing is estimated at over 850 units per year (not even including mainland and foreign buyers) but there are estimated to be only about 350 permits issued per year.
With the projected increases in interest rates and the small increases in rates recently it should spur some buyers who have been sitting on the sidelines.
Paul Brewbaker’s idea on a way to increase affordable housing is to encourage developers and anyone to go ahead and build as many homes as possible at or below the median sales price which is currently at $575,000. The current County rules on affordable housing are resulting in less affordable housing, not more.
The County currently wants developers to provide 50% of any subdivision to be (in their definition) affordable, which is even lower than it should be. This seems to have pushed developers to pass on building on Maui and build where there are less restrictions.
So what it does all mean? Supply and Demand. Economists’ indicators are for increasing prices.