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Affordable housing debate is about means, not end

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Supporters of the well-intentioned but misguided Bill 10 on Maui wanted affordable housing, and so did those who warned against it

Maui County residents dodged a bullet last Friday.

The Maui County Council upheld Mayor Michael Victorino’s veto of Bill 10, a proposal that would have worsened the county’s housing crisis by making affordable housing projects unprofitable.

The Grassroot Institute of Hawaii played a leading role in warning against Bill 10. We explained why the proposal was flawed and how it would have led to a slowdown in development. While the intentions behind the bill might have been good, the data showed it would have had a negative effect on housing growth in the county.

Our biggest motivation for speaking out about the bill wasn’t concerns over development or regulations. It wasn’t even about economic freedom, one of our foundational values.

It was really about the people.

We want a Hawaii where everyone who wants to buy a home can buy one in their price range. In other words, just like those who supported Bill 10, we want more affordable housing for the people of Hawaii. We want ordinary, working families on Maui and throughout the state to be able to buy their own homes, stay in Hawaii and raise their families here.

But we also are aware of the lessons of history and economics. That’s why we warned against Bill 10, which though well-intentioned would have driven up housing costs and possibly spiked the development of affordable housing. We want to see more homes built for everyone, at all income levels. But we knew that Bill 10 would frustrate that goal.

Jason Economou, government affairs director for the Realtors Association of Maui, thought the same way.

As the featured guest this week on my Hawaii Together program on ThinkTech Hawaii, Economou said the main problem with the bill was that it ignored the reality of our economy and how difficult it is to build homes on Maui.

“It ignored the reality of the situation that we live in, as far as just having capitalism,” he said. “It ignored the reality that the government cannot mandate private businesses to do things that are not economically beneficial to them. The government can’t mandate private businesses to build really anything, let alone affordable housing.”

Economou blamed the county’s housing shortage and high housing prices on “self-imposed limitations” and the already-high expense of building. He said the impact of nonresident homebuyers and short-term rentals on Maui’s housing market has been exaggerated, and that the real key to adding more housing is to make it easier for developers build it.

“For developers, honestly, the county needs to do more and stop just pointing fingers,” he said. “If the county actually steps up and assists as far as infrastructure development, if the county streamlines its processes, if it takes some of the risk out of the creation of housing, then those will all be incentives.

“Businesses respond to incentives,” he continued. “They don’t respond to threats. It is literally easier to build pretty much anywhere else in the United States than it is in Maui County. As long as the county keeps on pointing fingers and doing nothing to assist in the creation of new affordable housing, then developers can find a better landscape to build elsewhere, and I can’t blame them for trying to do that.”

As for real estate agents, Economou said they want more affordable housing just as much as anyone.

“You don’t need to incentivize us to sell affordable housing for us to advocate for more affordable housing,” he said. “Homeownership matters. [The Realtors Association of Maui] recognizes that, the National Association of Realtors recognizes that, and there is a ton of data that shows that homeownership creates healthier and more economically beneficial communities for everybody.”

Selling affordable homes also makes good business sense.

“We want more affordable housing because we know that if we can sell somebody their first home and it’s an affordable home, then we’ll probably be able to sell them another home down the line when they want to upgrade,” Economou said. “We’ll probably [also] have a relationship with their kids and maybe their grandkids, helping them to get homes as well, because if you’re able to own a home, there’s a higher likelihood that your kids will be able to own a home as well.”

My point is that even though the Grassroot Institute warned against Bill 10, that doesn’t mean we are against affordable housing. Instead, we are absolutely for it. But new homes do not build themselves. If we want an adequate supply of housing on Maui — or anywhere else in the islands — we need an environment that expands opportunities, fosters economic growth and lowers the cost of living.

We also need to work together. We should not treat real estate agents and developers as the enemy. Realtors want to sell affordable homes. Developers want to build them — as long as they won’t lose money in the process.

All the counties have to do is make it easier for them to do so.
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This commentary was Keli’i Akina’s weekly “President’s Corner” column for May 14, 2021. If you would like to have his columns emailed to you on a regular basis, please call 808-864-1776 or email info@grassrootinstitute.org.

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