New homes to be sold at near cost on Maui

Local real estate developer Peter Savio is taking on something that represents a rare project for him: building new homes for sale near cost on Maui.

Savio unveiled plans Thursday for 81 townhomes and single-family homes on condominium land lots exclusively for Maui residents who have more or less moderate incomes.

The project in Kihei is priced from $329,000 to $638,000 for townhomes with two bedrooms and one bathroom as well as single- family homes with three or four bedrooms and two or 2-1/2 bathrooms.

Savio plans to develop the project called Kihei Wailani Village on a 13-acre site long planned as a 27-lot residential subdivision by Maui Waiohuli Partners, led by Roderick Fong.

Savio, who was born in Hilo and is based on Oahu, said he’s taking on the Maui project in part because not enough affordable housing is being produced for Hawaii residents, especially on the Valley Isle where prices are being driven up by many more wealthy buyers from the mainland and foreign countries.

“We have lost control of our market,” he said. “Every local person should be able to buy.”

The veteran developer, who in past decades was most active in converting leasehold homes for fee- simple sale at affordable prices, said his strategy is to earn a 5% profit instead of a more traditional 15% to 20% while still relying on only private financing and no government subsidies.

Savio said this is possible because he sidesteps much risk of weak buyer demand by offering below-market prices while also saving on marketing costs.

This year through March, the Realtors Association of Maui reported, previously owned and new condos in Maui County sold for a median $599,000. In Kihei the figure was $522,500. The median is a point at which half the sales were for more and half were for less.

The same figures for single-family homes were $952,000 for the county and $899,000 for Kihei.

Savio estimated that what he intends to build is priced at around $100,000 or more below market price.

There will be some restrictions on buyers, including a residency requirement and income limit.

Savio said he hopes there will be enough demand from buyers with household incomes of no more than 80% of the median on Maui, which equates to $57,440 for a single person, $65,600 for a couple and $82,000 for a family of four as calculated under a state guideline. If need be, Savio can offer homes to residents earning up to 140% of Maui’s median income.

Maui County also will have the first right to purchase a home being sold by an original buyer within 25 years at a price tied to future incomes.

Savio said a lottery for the homes will be held to select buyers from applicants around early summer.

Construction is projected to start around summer and deliver initial homes early next year.