Relax Maui zoning to allow more urban dwellings

by Aaron Lief, Grassroot Institute, Mar 29, 2019

For many Maui families, purchasing a home is a pipe dream. However, there may be an opportunity for them to realize that dream, if county residents would be open to reforming local housing regulations.

Maui’s complex zoning laws act as a barrier to homebuilding, according to a March 2018 audit for the county prepared by Orion Planning and Design. The report identified key problems with the county’s zoning regime, ranging from outdated plans and a lack of transparency to the 600-page labyrinth that it entails. [1]

It appears the general intent of the Maui County Council is to heed this report’s warnings.

At a recent meeting of the Council’s Affordable Housing Committee, Councilmember Riki Hokama said, “The [planning] department is gonna start proposing recommendations for Title 19 (Maui’s zoning code). We have workers with no housing, … but I don’t think that’s the county’s job to provide [housing]; it’s the county’s job to support and participate in and help advocate [for it].” [2]

This is a step in the right direction, since much of Maui’s current housing initiatives focus on affordable housing. Subsidized housing might help a small fraction of the county’s low-income families, but without policies that encourage the increased supply of market-rate homes, housing prices will continue to increase. [3]

One option is to “build out” — encourage homebuilding outside of the Maui’s urban zones where land and home building costs are likely to be less expensive. Grassroot Scholar Randal O’Toole has extensively documented how Hawaii’s excessively broad land-use regulations have made housing prices in the state among the highest in the nation. [4]

But “building up” also is an option. Specifically, Maui County should consider increasing housing density and mixed-use zoning in urban centers. Not only would this grow Maui’s housing stock; it also would reduce the need for personal transportation, thus decreasing traffic and carbon emissions. As an added bonus, building in these areas would not trigger state involvement or require environmental impact statements, both of which would add to the cost of building new homes.

Allowing greater density in Maui’s urban areas also would help mitigate the displacement of the county’s low-income residents. Nationally, strict land-use regulations have disproportionately displaced low-income Americans, according to land-use scholars. [5]Economist Noah Smith has written, “Many American cities now use zoning codes to prevent or severely limit apartment buildings and townhouses from being built in many residential areas. This blocks poor people, who often can’t afford big single-family houses with lawns.” [6]

Maui’s urban housing districts — which include single-family, duplex and apartment-zoned lands — are predominantly zoned for single-family homes. [7] This makes it hard to build higher-density housing, which could come with a more reasonable price tag. Maui’s single-family districts require up to 10,000 square feet to build a single housing unit, [8] whereas  30-unit apartment structure could be built on those same plots, if it were legal. [9]

Maui families could move to the less expensive suburbs, as mainland families do; however, current land-use regulations limit suburban sprawl. [10] As a result, Maui’s minimal suburban housing is barely more affordable than market-rate homes in Kahului.

So where are Maui’s low-income families, and even middle-income families, supposed to go?

Two reforms could help ease those regulations and increase housing supply.

Maui lawmakers could look to Oahu’s R-3.5 zoning district, which requires only 3,500 square feet per single-family house or duplex. On Maui, one of the greatest barriers to housing development is simply finding the land to build on. If Maui were to adopt language similar to Oahu for its single-family districts, there would arise many opportunities to ease Maui’s housing crisis. More land for housing would instantly encourage the building of more homes, whether of new single-family homes, new duplexes or even tiny ohana-style homes in backyards.
The county could identify underutilized commercial lands in the business and industrial districts where residential use would be appropriate. With the rise of online retail outlets such as Amazon, Maui’s commercial real estate spaces have been hollowing out. [11] In certain commercial areas, such as in Maui’s M-1 and B-3 districts, limited forms of dwellings are permitted. [12] However, M-1 zoning only allows dwelling uses above or below the first floor, and B-3 districts represent a negligible amount of commercial land on Maui.

By removing regulations that discourage or prevent homebuilding, lawmakers could incentivize housing development without spending taxpayer dollars.

Subsidizing affordable housing projects, or even public housing projects, won’t be enough to fill the growing need for houses in Maui County. To realize that goal, we must work together and redesign the zoning code for the benefit of all residents. If that coincides with decreased traffic and carbon emissions, even better.

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Endnotes

[1] Orion Planning and Design, “Title 19 Zoning Code Audit,” March, 2018: ”All 11 required plans have been adopted, but only three plans have been adopted or updated within the past ten years. … Title 19 contains a patchwork of processes scattered throughout the code, as opposed to logically and thoughtfully arranged. … The audit team discovered that there are more than 600 pages of rules that apply to Title 19.” pp. 9-13.

[2] “Maui County Council Affordable Housing Committee — 13 Feb 2019,” Feb. 13, 2019.

[3] Miriam Zuk, Karen Chapple, “Housing Production, Filtering and Displacement: Untangling the Relationships,” Berkeley Institute of Governmental Studies, May, 2016: “Market-rate production is associated with higher housing cost burden for low-income households (as opposed to subsidized housing), but lower median rents in subsequent decades. … The report found that new market-rate construction reduced displacement of low-income households across the region”

[4] Randal O’Toole, “Build up or build out? How to make housing more affordable” Grassroot Institute of Hawaii, Feb. 19, 2019, Page 6.

[5] Michael C. Lens & Paavo Monkkonen, “Do Strict Land Use Regulations Make Metropolitan Areas More Segregated by Income?” Journal of the American Planning Association, Chicago, Dec. 28, 2015. “Density restrictions do drive urban income segregation of the rich, not the poor, but should be addressed because rich enclaves create significant metropolitan problems.”

[6] Noah Smith, “Ben Carson and the HUD Get Ready to Take on the NIMBYs,” Bloomberg, Sep. 12, 2018.

[7] “Maui Island Land Zoning Map,” Department of Planning, County of Maui, Wailuku.

[8] “19.08.040 — Area regulations,” Code of Ordinances, County of Maui: “The minimum lot area shall be six thousand square feet in R-1 residential districts, seven thousand five hundred square feet in R-2 residential districts, and ten thousand square feet in R-3 residential districts.”

[9] “19.12.050 — Development standards,” Code of Ordinances, County of Maui.

[10] “History,” State of Hawaii Land Use Commission, 2019: “In 1961, the Hawaii State Legislature determined that a lack of adequate controls had caused the development of Hawaii’s limited and valuable land for short-term gain for the few while resulting in long-term loss to the income and growth potential of our State’s economy. Development of scattered subdivisions, creating problems of expensive yet reduced public services, and the conversion of prime agricultural land to residential use, were key reasons for establishing the state-wide land use system.”

[11] Brian Perry, “Rising vacancies show soft retail space market,” The Maui News, April 18, 2018: “Maui’s retail market saw its second consecutive year of rising rates of vacancies, ending last year with a 20-year high of 15.57 percent unoccupied store space.”

[12] “19.20 B-3 Central Business District” & “19.24 M-1 Light Industrial District” Code of Ordinances, County of Maui. B-3 allows for, “Multifamily dwellings, duplexes, and bungalow courts,” while M-1 allows for, “Any use permitted in a B-1, B-2, or B-3 business district; provided, however, that no building, structure or portion thereof shall be hereafter erected, converted, or moved onto any lot in an M-1 district for dwelling purposes, including hotels and motels, except for dwelling units located above or below the first floor and apartments.”