Interest in building ohana units rising on Maui

by Aaron Lief, Grassroot Institute, Dec 15, 2016

To address the affordable housing crisis on the valley isle, the Maui County Council has been working to make it easier for residents to build ohana units on their property.

Ohana units, or accessory dwelling units, are small separate dwellings that a homeowner can build on their property to rent out.

This solution is fast and cost effective: accessory dwellings can be constructed quickly, are relatively cheap, and can even help struggling homeowners make ends meet.

However, not all aspects of the council’s plan deserve praise, as the county council is looking for ways to mandate lower rents on ohana units so they can only be used for affordable housing.

Not all members agree that this is the best course of action, with council member Mike White pointing to a UH Manoa study that found that affordable housing mandates throughout the state have slowed the growth of Hawaii’s housing supply.

This means that affordable housing regulations throughout the state have already led to less affordable housing in Hawaii, and yet lawmakers want to try it again.

A lower rent requirement means that homeowners will not be able to charge higher rents, and this will likely discourage many ohana units from being built. This would stifle the number of units being built and doesn’t address the core problem, which is a total lack of housing.

If residents must prove that they’re going to rent their ohana unit at the legally mandated lower price, and are subject to spontaneous audit from the government, it may dissuade construction of ohana units in the first place.

Additionally, if the lower rent doesn’t cover initial constructions costs and ongoing maintenance costs, homeowners will have no reason to build the ohana units.

Finally, enforcement of lower rents for the ohana units will require more government employees and new government offices, which means more taxpayer money will end up in a program that — in the long run — will hinder the number of ohana units being built.

Instead of spending money on enforcement, it would be better to use resources to expedite the permitting process.

In order to decrease housing costs on Maui, a significant increase in supply is necessary. Including an affordable housing requirement in the ohana bill would be like tying someone’s shoelaces together before a race. Adding huge costs to the bill may cause Maui residents who want to build more housing to quit before they start.

Island residents will have to wait until the New Year to find out what happens, as Bill PC-28 has been deferred until January 2017 after the newly elected council members have been sworn in.

Still, Maui’s County Council has done a good job in identifying key solutions to the housing crisis. In addition to PC-28, the council is working on four other bills which have the potential to spark real growth in Maui’s affordable housing market.

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