Chairman, Councilpersons. Thank you for this opportunity. My name is Chip Hilberg. As a real estate agent with a background in Hotel management, I would like to speak something about the issue of affordable housing and whether or not Wailea 670 would provide genuinely affordable housing for people working in the hotels and other occupations in South Maui.
Based on figures provided by Gail Revels, an analyst with Council Services, the 700 units Wailea 670 would be required to set aside for workforce housing would range in price from $247,000 to $535,000.
According to the most recent Maui County Data book for the top ten most common occupations in Maui County, the annual mean wage ranges from $20,830 to the high of $35,210. The December 2006 average for hotel workers, according to the Hawaii Business Library, is $33,700.
The rule of thumb in real estate is to pay no more than three or four times ones annual income or risk suffering foreclosure and loss of credit. Four times $20,830 is $83,320 a far cry from the Wailea 670 low end of affordability, $247,000. The highest wage for the top ten most common occupations, $35,210 multiplied times four equals $140,840. In other words you would have to have two wage earners earning among the highest salary for the common occupations to be able to afford the least expensive affordable house at Wailea 670, with the $535,000 price tag far out of reach even for them. (Not to mention the fact that only 30% of the affordable housing will actually be located on site. Is there any doubt that the on site housing will be in the half-million dollar range?)
The likely monthly payment for someone purchasing a home for $247,000 with 100% financing is about $1,773. When you add homeowner association dues, taxes and utilities the number is well over $2,000/month.
At the high end, the likely monthly payment for someone purchasing a home for $535,000, with 100% financing is $3,841. When you add homeowner association dues, taxes and utilities the number is probably over $4,500/mo. $54,000 per year in housing expense qualifies as affordable housing.
Thus, the statement that hotel workers will finally be able to live near where they work is highly misleading, a public relations ploy without basis in fact.
I find it unacceptable that the developers would use the genuine need for low income housing on Maui to trick the public into accepting this luxury development. The sacrifice of nature, water, quality of life and culture is too great to bear.
If you want to approve this development, you will do it to enable the developer and realtors like myself to make lots of money. Don’t kid yourself that you are doing it to help the local low wage earners to buy their own home.
Like the famous naturalist, John Muir stated “Everybody needs beauty as well as bread, places to play in and pray in where nature may heal and give strength to body and soul.” And I will leave you with this Native American wisdom: “Teach your children what we have taught our children, that the earth is our mother. What ever befalls the earth befalls the sons of the earth. If men spit upon the ground, they spit upon themselves.”