Maui mayor signs housing law, giving impression it will work

The Grassroot Institute testified the new ordinance is likely to do more harm than good by discouraging more homebuilding

from Grassroot Institute of Hawaii, October 21, 2022

A new Maui County law is being promoted as a way to provide more affordable housing, despite considerable testimony that the promise might not quite work out that way.

The law, formerly Bill 107, liberalizes the formula by which Maui residents can qualify to buy affordable housing. Mayor Mike Victorino said upon signing the bill on Tuesday that it will “put homeownership within reach for more Maui County residents.”

The Grassroot Institute, however, testified last month that the proposed changes would force homebuilders to lower their prices by about 20% and disincentivize future affordable home construction. The Institute also said the bill could be a drain on Maui taxpayers, which the mayor’s remarks seemed to confirm.

“We will continue to work with developers to make these home prices possible,” Victorino said. “We have examples of successful public-private partnerships that bring construction costs down through subsidies, infrastructure support, creative financing, various exemptions and bonus packages.”

Of course, the best, simplest, least costly option is to just get Maui’s government out of the way, so homebuilders can add to the county’s housing supply without having to jump through so many complicated, time-consuming and expensive regulatory hoops.

As Institute President Keli‘i Akina said in his most recent “President’s Corner” column, “This isn’t a secret. Housing activists from all parts of the political spectrum have been telling Hawaii policymakers for years that the best way to increase homebuilding and bring down home prices is to reduce government barriers.

“Nevertheless,” Akina said, “calls to increase government involvement in housing persist. A perfect example of this flawed approach is Bill 107, approved Sept. 27 by the Maui County Council,” and now signed into law by the mayor.

Akina said, “No doubt it is a well-intended effort to ‘do something’ about housing in Hawaii, but this is not the ‘something’ that needs to be done.”