Posted on: Sunday, August 10, 2003
Dispute over Maui projects
By Sean Hao
Advertiser Staff Writer
Visitor traffic to Maui is growing at the strongest clip in the state and the value of construction on the island is soaring.
But so has frustration over Maui's snarled traffic, new water restrictions and the feeling held by many residents that their once laid-back island has grown too crowded.
On the other end of the debate is increasing concern among developers and others that behind the current boom will come a slump that has little to do with the economy.
They point to policies by Mayor Alan Arakawa, who in turning a sympathetic ear to conservation interests, has placed people from a group that advocates slower growth into key county positions, rescinded permits for previously approved developments and implemented a more stringent permit review process.
With the value of approved private building permits more than doubling to $204 million through the first five months of this year, Maui officials can afford to be picky about new developments.
But some are concerned that once work on the projects winds down in six months to a year, there will be a drop in construction, leading to a loss of jobs and a shortage in housing — a repeat of the mid-1990s.
Arakawa, who was elected in 2002, acknowledges his administration anticipates a slowdown in construction, but he attributes it to the after-effects of Sept. 11, the slow economy and an onerous permitting process inherited from the previous administration.
"There absolutely will be a gap, but that is not because of what this administration is doing," he said. "Our administration has taken a position that we will follow the laws.
"Projects that have not adhered to the law, we've asked them to become legal and adhere to the law."
When the Hawai'i real estate boom went bust in the early 1990s, the political and legal battles between developers and conservationists mostly disappeared. Fueled largely by dot-com money in the late 1990s, plans for upscale development projects were dusted off and carpenters, electricians and plumbers went back to work.
Suddenly, the old battles over land, water and traffic reignited.
"It seems to be a very hot topic over here," said Leroy Laney, a Hawai'i Pacific University economics professor who recently spent a week on Maui.
Under Arakawa, permits for previously approved high-end housing projects have been rescinded or are getting a closer look and the number of permit applications acted on by the Maui Planning Commission is decreasing.
During the first six months of the year, 19 requests for development approvals were brought up for public hearing by the county planning commission compared to 40 during the year-ago period.
Developers' concerns are compounded by a county decision last month to stop taking reservations for project water meters in Central and South Maui, areas where much of the island's new development is occurring. The move follows state concerns about the overpumping of the 'Iao Aquifer.
Without guaranteed access to water, developers will shelve projects, Laney said.
Just how much water is available on Maui is highly debated, however "any kind of moratorium is a serious concern because that could grind growth to a halt," he said.
Housing costs high
Maui has some of the most expensive homes in the state. Through June, the median price of a single-family home on Maui rose 10 percent to $401,750, according to the Realtors Association of Maui.
Sales prices of existing home rose faster on Kaua'i, the Big Island and O'ahu during the same period, but have not come close to Maui's median price.
Arakawa said by stringently scrutinizing new developments, he hopes to push developers to build more affordable homes.
"We do not oppose high-end housing," Arakawa said. "We're just not going out of our way to assist them. We are assisting those that are doing affordable housing."
Meanwhile, some upscale housing projects are hitting roadblocks. For example, since Arakawa took office Jan. 2:
• The county told West Maui Land Co. to submit a master plan for multiple subdivisions under development. The decision has delayed the sale of some of the planned 38 lots for $550,000 to $750,000.
• County officials decided not to seek a community plan amendment for a proposed 33-lot Pu'ukahana subdivision. That means another round of public hearings for the project and its lots, which are priced between $195,000 and $265,000.
• The county rescinded a permit granted late last year for an eight-lot subdivision at Maliko Point.
Maliko Point developer Francesco Moretti is now seeking another permit, but does not expect a public hearing on the matter until September. Such delays are driving up prices for homes on Maui, he said in an e-mail.
"I feel that the planning instrument (process) in Maui is not considering the needs of a large number of residents and future residents that are in search of a rural setting to plant roots with their families," Moretti said.
Too much growth?
Environmental groups such as Maui Tomorrow say the development climate is creating growing ranks of service-sector workers who cannot afford to buy the luxury homes developers want to build.
"We were moving forward in a very short-term perspective," said Lucienne de Naie, vice president for Maui Tomorrow.
Though Maui County has some of the most expensive homes in the state, its average weekly wages of $594 a week in the fourth quarter of 2002 fell well short of the $678 typically earned by workers in Honolulu. However, Maui workers on average still make more than those in Hawai'i County ($586) and Kaua'i County ($563), according to the state labor department.
Though divisive at first, Arakawa's efforts to include groups such as Maui Tomorrow should force developers and environmentalists to work together from the outset, said de Naie.
Such cooperation could lead to fewer disagreements ending in courtroom battles, and that would be good for both sides, he said.
"If everyone has a seat you don't have to duke it out in the courts," de Naie said. "It is not business as usual, but I think business will continue."
Through the first six months, Maui visitor traffic is up nearly 7 percent, compared with a 7.4 percent drop for O'ahu and a 1.1 percent drop on the Big Island and a 0.7 percent dip on Kaua'i.
The number of workers in Maui County grew 3.9 percent between June 2002 and June of this year. That trailed payroll growth of 4 percent on O'ahu, 5.1 percent on the Big Island and 5.8 percent on Kaua'i during the same period.
Year-to-year, there were fewer jobs in manufacturing, retail trade, food and drinking places and government in Maui County. But some developers believe the county can expect job losses if the county's development policies aren't loosened.
"The result will be reflected in many sectors of the economy, as there is a tremendous ripple effect when people invest to enhance the value of their property, or choose to land bank instead," said Smith Development, Pu'ukahana project developer.
Project numbers declining
Whether it's the economy, new development policies or other cause, the number of development projects seeking applications from the Maui planning department were down by 46 percent in the first six months of this year.
Ultimately, Arakawa said his goal is to create a more predictable permitting process, one free from political or financial influence.
Charlie Jenks, a Maui development consultant and former county public works director, said the result may be standards that are so high they'll drive away developers.
"The problem is you have to balance that off against the economic situation," he said. Within six months, Jenks said, "this could really start affecting the availability of housing and the cost of housing."
Gov. Linda Lingle, who served as Maui's mayor from 1990 to 1998, said balancing development and environmental concerns are a constant struggle.
"The irony is that many people who have moved to Maui because it is so attractive now are very vocal and articulate and don't want to have any more growth," she said. "It's just an ongoing issue you have to balance everyday."
