A California-based developer has delivered new homes on Maui with very low rents at an opportune time.
Construction was recently completed on the 120-unit Kaiwahine Village community in Kihei, where advertised monthly rent was as low as $510 for two-bedroom apartments and $571 for three-bedroom residences.
Urban Housing Communities and its nonprofit affiliate Ikaika Ohana developed the $63 million project with financial contributions from the state and Maui County along with private financing after several years of work.
Residents began moving in last month after about 18 months of construction, according to an announcement last week by the project’s contractor, Moss Construction.
Kaiwahine Village homes are being rented to households earning no more than 60% of Maui’s annual median income, which equates to $46,860 for a couple and $58,560 for a family of four.
About a dozen units are reserved for households earning no more than 40% of the median, and a similar number are reserved for households earning no more than 30% of the median.
Hawaii’s need for low-income housing perhaps has never been greater given that approximately 250,000 people statewide have filed for unemployment after losing work hours or jobs amid the novel coronavirus pandemic.
The state’s unemployment rate in May was a seasonally adjusted 22.6% after a record 23.8% in April. Maui, with an exceptional reliance on tourism, had the highest rate among counties at a not seasonally adjusted 33.4% in May after hitting 34.6% in April.
Efforts to develop Kaiwahine Village date back several years and followed an unsuccessful effort to build for-sale homes on the site in Kihei.
A consultant on the project, Novogradac & Co. LLP, said a deed restriction was attached to the land requiring that homes built there be affordable to households earning no more than 80% of Maui’s median income. This restriction made it difficult for a prior landowner to produce for-sale homes under a previous plan, Urban Housing CEO said in 2018 after the company agreed to buy the land to pursue low-income rental housing.
Novogradac, which produced a market study for Urban Housing, said in 2018 that a severe affordable housing shortage existed in the South Maui region.
“The development will offer much-needed affordable housing in an area in which high construction costs continue to limit multifamily (housing) development,” Rebecca Arthur, a Novogradac partner, said in a statement at the time.
Arthur also said Kaiwahine Village rents would be 48% to 82% less than market rates on Maui.
Urban Housing committed to maintain low-income rental rates at Kaiwahine Village for at least 65 years.
Monthly rent for households at the upper income limit was advertised at $1,169 for two-bedroom units and $1,333 for three-bedroom units.
In return for serving low-income households, Urban Housing received a $19.7 million loan, $13 million in state tax credits and $26 million in federal tax credits from the Hawaii Housing Finance and Development Corp., a state agency that helps produce affordable housing.
Maui County contributed $3.6 million.
“We appreciate the contributions from Maui County and HHFDC, along with our other financial partners to make this project a reality for the Kihei community,” Robert Gaouette, a vice president at Urban Housing and Ikaika Ohana, said in a statement.