Luxury homebuilder eyes Maui for affordable housing

A California builder of luxury homes is proposing a 100% affordable-housing project on Maui where plans for a smaller subdivision fizzled more than a decade ago.

Genova Construction Development aims to build 752 homes on long-fallow farmland in Waiehu a little north of Kahului and Wailuku.

The company recently filed a draft environmental assessment for its plan that seeks zoning exemptions under state affordable-housing law in return for selling all the homes at moderate prices to households with moderate incomes.

If realized, the project tentatively called Waiehu Residential Community would deliver more affordable housing on part of a site previously approved for 238 affordable homes and 228 market-priced house lots on roughly 240 acres of land once planted in sugar cane.

The prior plan was pursued by Hawaii developer Sterling Kim of Hale Mua Properties LLC but faltered in the wake of the Great Recession after Kim obtained government approvals.

A lender, Southwest 7 LLC, acquired the project site in 2013 after filing a foreclosure lawsuit against Hale Mua in 2010.

Genova bought the property from Southwest 7 in October for $6 million, according to property records.

Brad Cook, chief financial officer of Genova, said the company views the project as a big opportunity and challenge.

“It’s a great opportunity for Maui,” he said. “It’s a lot of housing that is desperately needed.”

Cook also said the company, which specializes in building custom luxury homes in Southern California but has done some affordable housing as well, realizes that such a big project in Hawaii with high development costs will be challenging to pull off.

“It’s risky,” he said. “We have our work cut out for us for sure.”

Genova said in its filing that it plans to make all 752 homes affordable under the state’s affordable- housing law that allows developers to obtain exemptions from zoning and other regulatory rules.

Hale Mua obtained county exemptions to build housing on the land zoned for agriculture under a prior version of the state law now known as 201-H. Hale Mua also obtained state Land Use Commission approval to reclassify a portion of the land at the state level from agricultural to urban use, though the LUC rescinded that approval in 2018 because Hale Mua didn’t fulfill conditions including construction deadlines.

Genova intends to develop its project on 158 acres of the roughly 240-acre site, and seek a new LUC reclassification to permit urban use. The developer also intends to seek county zoning and planning exemptions, and said in its filing the property is still appropriate for housing.

“The proposed project is not anticipated to adversely affect the unique character of Waihee-Waiehu with its combination of existing residential subdivisions, agricultural subdivisions, and rural settlements,” the company said in its filing.

The project site was once planted in sugar cane, then gave way to macadamia nut trees in the 1980s but has not had any active agricultural production in over a decade, according to Genova’s report.

Neighboring sites include the Ocean View Estates residential subdivision, vacant land owned by the Free Church of Tonga and vacant land envisioned for affordable housing by nonprofit Maui Economic Opportunity Inc., the report said.

Genova’s plan is to build 184 condominiums and 568 single-family homes along with 6.3 acres of park space and 17,400 square feet of retail.

Home prices are proposed to be affordable to Maui households earning between 80% and 120% of the county’s median income, according to a letter from Genova to the Maui Department of Planning.

These household income limits last year were $76,720 at the low end and $115,080 at the high end. Based on Maui County guidelines, corresponding home prices could range from under $300,000 to over $700,000.

Last year, single-family homes on Maui sold for a median of around $975,000 while the same figure for condos was around $650,000.

If Genova receives approvals, the company anticipates building the subdivision in several phases from 2024 to 2032.