Posted on: Friday, June 3, 2005
Maui giving helping hand to first-time homebuyers
By Timothy Hurley
Advertiser Maui County Bureau
WAILUKU, Maui — Gladys Baisa is very familiar with the affordable-housing crisis on Maui.
As head of Maui Economic Opportunity, one of Maui's largest nonprofits, Baisa is struggling to keep her staff, some of whom are losing any hope of owning their own homes. Just this week, Baisa learned two of her best people are leaving because of the housing situation.
"They are leaving Maui, and they are doing so in sorrow," she said.
With housing prices rocketing into orbit, the Maui County Council has established a new $400,000 fund to bolster its federally funded first-time homebuyers program.
The program was approved by the council late last month as part of the 2006 fiscal year budget, at a time when million-dollar home sales boosted the median house price on Maui to just under $700,000 — a 36 percent increase from a year earlier and a statewide high that real estate brokers say could go even higher.
Other counties also are experiencing a real estate boom. The median price for a single-family home on O'ahu in April was $545,000, up 25 percent; $370,000 on the Big Island, up 34 percent; and $540,000 on Kaua'i, up 14 percent.
The new Maui fund targets working people who make too much money to qualify for housing assistance, but who are losing ground toward a home purchase in the escalating real estate market. Details have not yet been worked out, but council members are hoping to help families that earn 120 percent of the county median income, which is about $64,300 for a family of four, with loans for down payments and closing costs.
While first-time homebuyer programs are not new to the state, the use of local funds for that purpose is a first for Hawai'i, officials said.
Maui County's current first-time homebuyers program is for families earning 80 percent of the county median income.
Lokahi Pacific, the nonprofit that administers the U.S. Department of Housing and Urban Development-funded program for the county, reports that more than 160 families are on the HUD waiting list for first-time assistance.
"There's nothing out there," said Jo Ann T. Ridao, managing director of Lokahi Pacific. "It's very rare when something other than a condo or townhome is available."
Those who do qualify for HUD assistance can buy a home costing up to about $298,000, she said. By raising the qualification to 120 percent of median income, Ridao said more people will have the opportunity to buy a home, especially if more affordably priced units come on the market, as expected.
"The difficulties associated with the high cost of housing are not exclusive to low-income families," said Councilman Michael Molina, who introduced a bill suggesting provisions for the new first-time homebuyers program.
The council's Housing and Human Services Committee discussed Molina's proposal during a meeting yesterday. Some of the proposed guidelines include a residency requirement of three years, as well as waiving that requirement for those who left the county to further their education or join the military.
Molina's proposal would provide a loan term of 15 years, to be repaid at 3 percent interest only if the property is sold, refinanced or is no longer the owner's principal residence.
An accrued equity provision in Molina's proposal would discourage speculation to avoid immediate resale of the property. The county would take 50 percent of any profit if the property is sold within five years, with the cut diminishing to zero after 15 years.
Baisa said MEO isn't the only entity losing workers to the housing crisis, and that the lack of affordable housing was causing a deterioration in the quality of life here.
"This is a program we desperately need in Maui County," she said.
Reach Timothy Hurley at thurley@honoluluadvertiser.com or (808) 244-4880.
