9 projects with over 800 housing units could get funding from Maui County for construction, rising costs

Maui County wants to spend its $43.5 million Affordable Housing Fund on nine projects with 843 units of mostly rental housing in the next fiscal year, including a rental project in Kīhei with social spaces for seniors, a Nāpili apartment complex for fire-displaced families and a major housing development in Kahului with a civic center and commercial space.

The projects were listed in the Housing Department’s annual report about how it plans to use the Affordable Housing Fund in the new fiscal year that starts July 1. They include eight on Maui and one on Lāna‘i that are either under construction, in the planning stages or aging projects in need of repairs. The Maui County Council is currently reviewing the budget and could potentially go over the proposed funding for the projects today, according to council staff. 

Every year the county sets aside a portion of its property taxes for affordable housing. This coming year, Mayor Richard Bissen’s budget set that percentage at 5%, resulting in $32.5 million for the fund. With $11 million leftover from last year, that puts the total fund at about $43.5 million.

On Maui, the pool of renters is larger than it was before the 2023 wildfires and median rents are still well above pre-fire levels, according to the University of Hawai‘i Economic Research Organization. As of March, nearly half of the people displaced by the fires were either in temporary housing, living with family or friends, in a shelter or unhoused. 

“We didn’t have enough to begin with, and with the fire, it just increased the need,” said Karen Seddon, regional vice president of EAH Housing, which is developing Kaiahale ‘o Kahiluhilu, one of the largest projects the county is considering for funding. 

The 303-unit affordable housing development is proposed to get $10 million in total grants, with $5 million each for Phases 1 and 2. The first phase would have 197 multi-family rental units and the second phase would have 106 units, both for residents earning 60% and below the area median income. That’s $74,820 for a family of four, $59,880 for a family of two and $52,380 for one person, under the 2024 county guidelines.

Certain housing units would be set aside for the lowest income levels, with 83 units for those making 50% or less of the area median income and 17 units for those making 30% or less. 

Seddon said the goal is to develop both phases at the same time or at least as close as possible to save costs. The developers hope to get county approvals by the end of the summer and expect to turn in a full application to the Hawai‘i Housing Finance and Development Corporation for funding in in the February 2026 round. If all goes well and they’re able to get funding next year, they plan to start construction in 2027, with completion anticipated in 2029. 

With the Trump administration’s constantly shifting policy on tariffs, Seddon said it’s hard to know the impacts to the project, but the developers are tracking the changes, adjusting costs and trying to move forward as best they can.

The housing is part of a much larger planned project known as the Kahului Civic Center, which will include a 66,000-square-foot civic center, up to 43,000 square feet of state office space, 16,000 square feet for the new location of the Kahului Public Library and about 5,000 square feet for commercial space. The entire project is estimated to cost $192 million. 

Seddon, the former executive director of the Hawai‘i Housing Finance and Development Corporation, said she has “a big heart for both rental and the for sale” housing.

“We need both of them, but a majority of our residents, they really need to be able to be in the rental market to begin with,” Seddon said. “And that gives them an opportunity to save up for that downpayment and work with somebody like the homeownership center to make sure that their credit’s in good line. … And sometimes it takes a few years to get yourself there, right?” 

Another rental project also seeking funding is Hale O Pi‘ikea, a $140 million, 223-unit rental housing project in Kīhei whose colorful buildings are already taking shape near the Pi‘ilani Village Shopping Center that includes Safeway and Ross. The Housing Department is proposing to give the project a total of about $3.5 million for its three phases. The project has received about $17.1 million in previous years for land acquisition and new construction and broke ground in November 2023.

Chris Flaherty, co-managing general partner of ‘Ikenākea Development, which is working on the project with the Hawaiian Community Development Board and Mark Development, said that Phase 1, which includes 89 rental units, is expected to finish in August, with applications already open at www.ikenakea.com/hale-o-piikea. Phase 3, which includes 35 affordable rental units, is projected to finish at the end of the year. Both will be geared towards people making 60% or less of the area median income, and each phase will include one unit set aside for a homeless household who will live there for a maximum term of one year. 

Phase 2, which is the largest, is scheduled to finish in February of next year. Its 96 units will be geared towards senior residents 55 and older who are earning 30% to 60% of the area median income. The four-story building will include a community garden, an open picnic area, a community room with computer accessibility and a meeting space for social functions, tenant meetings and health and social service programs. 

In a place where the median price of a single-family home was $1.3 million in March, Flaherty said rental housing for people making below 60% of the area median income fills a major need. Especially in the aftermath of the fires, unemployment and poverty rates spiked, and incomes dropped, UHERO found.

“Rentals at 60% (of the median income) provides us a platform, a stepping stone to get stability,” Flaherty said.

The cost of developing housing has grown, too. Flaherty said interest rates and inflationary pressure have increased the cost of materials and wages over the past two to three years. Funding from the county in the next fiscal year would help cover the shortfall as well as the unexpected cost of building predator-proof fencing for wetland areas makai of the project. Flaherty said the project was supposed to get federal funding through the county to help cover the cost of the fencing, but the Trump administration pulled the money earlier this year as part of sweeping budget cuts.

For now, it’s also unclear how the tariffs could impact the cost of the project and importing certain construction materials. 

“We should be out of harm’s way, but we don’t know,” Flaherty said. “There’s some uncertainty there as well. … As we start to finish Phase 2 and Phase 3, that could become an issue.”

The developers of the $25 million Kehalani Affordable Apartments also said they haven’t been affected by tariffs yet because the project hasn’t started construction. However, they also are facing uncertainty about project costs and supplies, primarily because they will be in competition for lumber and other building materials with homes being rebuilt in Los Angeles after the devastating wildfires earlier this year, said Everett and Jack Dowling, the father and son co-owners of Dowling Co. in Wailuku.

“We’re trying to get ahead for this project and all of our projects,” Everett Dowling said. “We’re nervous about California and suppliers sending supplies and materials to California rather than Hawai‘i, knowing that California can absorb them all. … We’re trying to accelerate projects to the extent we can control.” 

The county is proposing to give Dowling’s Kehalani project a $3.5 million loan to provide 35 affordable workforce units. The three-story development would include 31 units for people earning 60% or less of the area median income and 4 units for people earning 30% or less. 

The loan would help bring down the interest and carrying costs and lower the overall project budget to make it financially feasible, according to the county’s report. Jack Dowling said the loan would be paid back well before the end of the project’s affordability period, which is 60-plus years. It would also bolster the project’s application as it competes with other applicants to get low-income housing tax credits from the Hawai‘i Housing Finance and Development Corporation. 

Once Dowling Co. can get funding from tax credits and the state’s Rental Housing Revolving Fund, which they anticipate in the first quarter of 2026, they can start work. They expect the units to be ready for occupancy by the end of the third quarter of 2027. 

Nearly all of the projects the county wants to fund are for rentals, though $3.5 million is slated for the Fairways at Maui Lani Project by the Na Hale O Maui, which wants to develop seven single-family homes for people earning 80% to 140% of the area median income. The nonprofit sells the homes to residents at discounted prices while holding the land in a trust to keep it affordable.

Other projects the county is proposing to fund include:

• Kaiaulu O Nāpili: $12.4 million loan for the planning, design and construction of 120 multifamily rental apartments that would house Lahaina residents impacted by the August 2023 wildfires who earn 60% or less of the area median income. 
• Kaiaulu O Lāna‘i: $7.2 million loan to construct 36 units for families earning 30% to 60% of the area median income, including 24 units for seniors.
• Permanently Affordable Rental Unit Strategy Project: $1,015,000 grant for the Hawai‘i Community Development Corporation’s initiative to acquire existing housing stock for affordable rentals. 
• Arc of Maui: $651,245 grant to replace the pipes and windows and install air conditioning in four homes that offer low-income rental housing to people with intellectual and developmental disabilities and 24-hour support by trained staff. 
• Ka Hale A Ke Ola Homeless Resource Center: $226,211 grant to remove rotting wood and apply weather-proof painting to a building with 72 units rented to unsheltered people at or below 50% of the area median income.