Backyard cottages one way to meet Maui housing needs

The following commentary was first published on Nov. 4, 2024, in the Maui News under the headline “More ADUs would improve Maui housing affordability.”

by Jonathan Helton, Grassroot Institute

Maui County lacked sufficient housing even before Aug. 8, 2023, when the fires that razed Lahaina led to a heartbreaking loss of life and destroyed an estimated 3,000 homes. Rents and home values have gone up since.

More than a year later, Maui County needs all hands on deck to help resolve this situation. One option would be to let homeowners build more backyard cottages for use by relatives, friends or renters.

Legally called accessory dwelling units, these cottages are one- or two-bedroom, one-bath homes with small kitchens and living areas.

Right now, Maui residents can build a cottage on any residential property 7,500 square feet or smaller, which is the size of lots in most of Maui’s residential zones. Anyone who owns a lot larger than 7,500 square feet can build two per lot.

On Lanai and Molokai, the rules are different. Any lot larger than 7,500 square feet is allowed to have one cottage.

Council Chair Alice Lee has proposed a bill that would standardize these rules across the county. The bill would allow any owner of a residential lot to build two cottages in addition to the primary residence.

Lee’s proposal could be a powerful way to enable homeowners to help reduce the county’s dreadful housing shortage, especially given the popularity of multigenerational living in Hawaii.

As households grow and age, small cottages could make perfect sense for older relatives or young adults just starting out. Even a recent national survey revealed that more than half of people who built cottages on their properties did so to house family members.

Research indicates that smaller, backyard cottages tend to be more affordable than market-rate housing — in part because they are often rented to friends or family, but also due to their size.

Backyard cottages, as the name implies, tend to be smaller than normal homes. In Maui County, the county code actually limits the size of the accessory dwelling based on the size of the lot. For instance, lots smaller than 7,500 square feet cannot have an accessory dwelling larger than 500 square feet.

From a big picture perspective, building more backyard cottages and accessory dwellings also could help stabilize or lower home and rental prices by expanding the number of houses available for sale or rent.

A common objection to building more homes in existing neighborhoods is the stress they could put on street, water and sewer infrastructure. It is true that Maui needs to upgrade its infrastructure, but there are already plans to build a wastewater treatment facility in Central Maui.

Furthermore, the county’s new general excise tax surcharge, adopted last year, will give county officials the opportunity to upgrade streets, sidewalks and pipes.

It’s also important to consider that building additional homes in existing neighborhoods requires less costly infrastructure updates than starting from scratch for completely new neighborhoods.

And new construction would increase property tax collections from existing neighborhoods, which could also help the county afford infrastructure upgrades and maintenance.

Building more cottages isn’t the only way to reduce Maui’s continuing housing crisis, but it would help more local families afford the island’s high cost of living.