Council approves Waiʻehu housing project exemptions in narrow 5-4 vote

In a split decision, the Maui County Council voted 5-4 last week to grant key procedural exemptions and loan flexibility for the 119-unit Hale Mahaolu Ke Kahua affordable housing project in Waiʻehu, a move developers say is critical for the project to secure competitive financing. Maui County has already provided a $6 million loan for the project from the Affordable Housing Fund.

The final Council action, which saw a five-member majority prevail, followed a contentious debate on Aug. 26. Council Member Nohelani Uʻu-Hodgins crafted a compromise to allow for more public input on Sept. 8, when the Council again heard from both opponents and supporters of the project.

More project opposition

Public opposition focused on a range of concerns, from infrastructure to cultural resources. Noelani Paresa, who identified herself as a lineal descendant of ancestors in Waiʻehu, argued that the proposed exemptions would remove critical oversight and transparency because decision-making would shift from the publicly accessible County Council to the director of the Department of Housing.

“This is an ethical issue regarding appropriate checks and balances and transparency of intergovernmental partnership,” she said. “It is also a potential ethics issue that these exemptions would create a loophole so that the developer would not need to comply with the regulations that protect our community via statutes and fiduciary duty.”

Paresa cited prior concerns over stream diversions, water access, and the potential impact on sensitive cultural resources in the Central Maui dune system.

Other opponents raised issues about traffic, local school capacity, and the need for adequate environmental reviews. Area resident David Hoffman said that roadway infrastructure north of Iao Stream is inadequate to handle additional traffic and evacuation routes, calling it “irresponsible and immoral” to proceed with the project without improvements.

Testifying in favor of the project was Paul Tonnessen, an advocate for children who’ve been traumatized in Maui County.

“As someone who personally has had multiple foster children myself and work closely with children and families impacted by trauma, I see firsthand how providing stable housing is not just shelter. It’s a sense of their safety, healing and hope,” he said.

Tonnessen shared an anecdote of coming across a young man who is seeking higher education, but can’t afford housing. Instead, he lives out of his car.

“I commend him for his decision to attend college, but like he and so many others, they shouldn’t be put into situations to decide either or,” he said. “Unfortunately, the reality is that they have no place to go.”

Homelessness aggravates domestic violence, Tonnessen said. Many survivors face homelessness and housing insecurity.

“Financial insecurity is the most significant reason survivors of domestic violence return to their abusers,” he said. “It’s not a matter of a choice; it’s a matter of survival. A housing program like this would offer them the ability to end the abuse and begin the healing process in a safe and secure environment. But as we all well know, the demand for affordable housing here on Maui exceeds the availability.”

Tonnessen commended landowner Maui Economic Opportunity for pursuing the affordable housing project, and said he has “deep confidence” that the agency has done its due diligence with respect to clear title of the property.

“Just as importantly, they consistently ensure that Hawaiʻi culture and values are in the forefront placing at the heart of their decision-making,” he said. “To me, this project aligns with addressing Maui’s urgent housing crisis and will have a tremendous impact on families that need this type of program.”

Reuben Ignacio, who retired in June from working Hale Mahaolu, said the wait list for those seeking affordable housing is five to seven years; at one location, the wait time is up to 10 years.

Resident interested in applying for housing at Hale Mahaolu asked about the waiting period at resource fairs, and — after learning the expected years-long wait, and many times people would question, “half joking but also half serious, … Why should I apply? I’ll be dead by then.”

“I think we can all agree in this chamber that Maui is in dire need of housing, affordable housing in particular,” Ignacio said. “I understand everyone should and does have a voice. But we should make the path easier, not more difficult to support affordable housing projects like Ke Kahua.”

Dispute over property title

Testifier Henry Maio said he has a deed and a claim to the property, questioning clear title to the property.

MEO has maintained that it has clear legal title to the property.

Maui attorney Peter Horovitz, a former director and vice-president of MEO, attempted to clarify the legal history of the site. He explained that a prior court case was an “ejectment action,” which is a lawsuit to regain possession from an unlawful occupant, not a “quiet title” case, which is a lawsuit to establish legal ownership against all claims.

Council Member Keani Rawlins-Fernandez challenged Horovitz’s testimony, accusing him of lying. “It wasn’t a quiet title case,” she said. “It was a trespassing case, which was a civil case that was not quiet title.” She also said: “The records presented by MEO to assert its possessory interests…are not sufficient to entitle MEO to a quiet title against all potential claimants, even if they had named as parties. Please be truthful.”

Horovitz asked for a chance to respond.

“Because you just called me a liar,” he said. “If you listen to my prior testimony, what I stated very clearly is that what MEO brought, the action that MEO brought, was not a quiet title. It was an ejectment action, period. The defendants… brought a claim stating that they had title and they wanted the court to state that they had title. That is a quiet title. They brought it, not MEO. That’s what I stated. I never stated that MEO brought a quiet title action.”

Maui Council’s role

Lee emphasized during the meeting that the Council’s role was not to resolve land disputes.

“Everybody keep in mind we are not the courthouse,” she said. “We are the legislative body. We have zero authority over titles. And so, you know, let’s try and even though one might hold the feeling or perspective that there are land title issues which could be valid, this is not the place to take care of those things.”

The Council majority — Lee, Uʻu-Hodgins, Yuki Lei Sugimura, Tasha Kama and Tom Cook — ultimately voted to approve the proposed exemptions from the County Code for the project. Minority members Rawlins-Fernandez, Tamara Paltin, Shane Sinenci and Gabe Johnson voted “no.”

Exemptions to the Maui County Code

Resolution 25-167 provides four exemptions from the Maui County Code that will make it easier for the project developers to obtain financing.

Those include a property ownership exemption. Instead of a nonprofit having to own the land in perpetuity from the beginning, the exemption allows the land to be owned by someone else first. The property can then be transferred to a qualified affordable housing provider without needing a vote from the council, as long as the director of Housing gives written permission.

Another exemption is for the property sale or exchange. Normally, selling or trading the property would require a special resolution from the County Council. The exemption approved by the Council majority simplifies that process by allowing the property to be sold or exchanged with just the written permission of the housing director.

Another exemption involves the position of the County’s loan on a mortgage. Normally, it must be in a primary or secondary position, but the exemption allows the county loan to be in a lower position, making it easer for the project to secure financing.

The last exemption arises from the loan interest rate. The standard interest rate for such a loan is 3%, but the exemption modification lowers the rate to zero percent while the project is being built and 1% after it’s finished, helping to keep the project affordable by reducing financing costs.

The exemptions to the Maui County Code are considered critical for developers to apply for competitive Low-income Housing Tax Credits, which are only reviewed once a year in February by the Hawaiʻi Housing Finance and Development Corp.