At our very first Affordable Housing Committee meeting we went right to work, starting with the 201H process. What’s that? The County and State 201H process allows for projects primarily designed for lower income housing to get fast-tracked approval. This includes exemptions from certain zoning, planning, and environmental laws and fees, saving the developers big bucks.
The process uses federal Department of Housing and Urban Development (HUD) guidelines to define what is “affordable.” These guidelines take the Area Median Income (AMI), or what they calculate is the average income of our local residents, and uses a formula to decide what a person making that income can pay for a home. The problem is, the AMI for Maui doesn’t reflect the reality of our workforce. For example, HUD claims our AMI, or the average income of a local household, in 2020 is $97,500, while the AMI for 2019 was $83,800. That means, according to HUD, the average household is making $13,700 more than last year. This is not the reality for most of our local workforce.
According to HUD guidelines, if you are a single parent, making $60,000/year, your household is between 60-70% AMI. If you are a 2-income household at $100,000/year, your household is between 100-110% AMI. HUD determines that a household can spend up to 30% of its income on housing. Therefore, in 2020, HUD claimed a person making $60k/year can afford a $278,000 2-bedroom home, while a household making $100k/year can afford a $456,000 2-bedroom home.
It gets even pricier when we look at 4-bedroom homes. HUD states a person making $60K/year can afford a $370K 4-bedroom home and a household making $100k/year can pay $618,000 for a 4-bedroom home.
The 201H process currently allows for an “affordable” development as: a project where over 50% of units are built for 80% – 140% of AMI, the rest can be market rate units. If you look at the allowable 4-bedroom home prices for 100-140% AMI, we’re talking about $600-$865,000 homes! I think we can all agree that’s not affordable to most of our workforce. So, what can we do?
1. At our first meeting of the year, the Affordable Housing Committee approved a bill proposed by Councilmember Molina that would make 201H projects even more affordable in two ways. If this bill passes full Council, 75% of units in a development applying for 201H approval would have to be “affordable”, instead of the current 50%. And it removes the 120-140% AMI bracket, which will bring the average affordable unit cost down. I support these changes. If we want to respect the real intent of the 201H process we must build for truly lower income people and that means we need to serve individuals who are making 50, 60, 80% of AMI, and nothing over 100%.
2. We need to set our own local guidelines about what is affordable to our local workforce. HUD guidelines are just that: federal guidelines, and we can do better. According to the Bureau of Labor Statistics, the annual mean wage of our county’s top 10 professions (which include cashiers, cleaners, clerks, cooks, waiters, and retail salespersons, etc) in 2019 was $38,495. Compare that with HUD’s AMI of $83,800.
3. We can also reconsider the 30% of income calculation, which I feel does not take into account the high cost of living in the islands. For example, other counties have reduced this to 28%.
If you’ve read this far, thank you! I know it’s complex, but if we want to solve our housing crisis, we must roll up our sleeves and understand the issues together. We need your help and input to change policy and implement creative solutions.
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