The Maui County Council on Jan. 17 approved exceptions to conditions in section 3.35.070 of the Maui County Code for two affordable-housing developments after developers and housing staff said lenders would not close financing with the conditions in place.

What the council approved: Resolutions 25-15 and 25-16 grant specified exemptions and modifications for the Kilohana Makai Project in Kihei (a for-sale project previously awarded an Affordable Housing Fund grant) and the Aikanaha Residences, phases 1 and 2 in Waikapu (a LIHTC-targeted rental project). Both resolutions were adopted on voice votes (recorded tallies reported as 9 ayes, 0 nos for each).

Why it matters: Developers asked the council to remove or modify certain county grant conditions — including mortgage-lien requirements and interest-rate terms — that lenders said would prevent them from providing construction or permanent financing. For the LIHTC-funded Aikanaha project, developers asked the county to allow the county’s loan to be subordinated to LIHTC financing and to consider a lower interest rate than the statutory 3% per annum for Affordable Housing Fund loans.

Council discussion: Members pressed staff and applicants to explain the differences between the projects and whether the council should instead revise the county code more broadly. Councilmember Gabe Johnson and others said the exemptions reflect financing realities for projects financed with Low-Income Housing Tax Credit (LIHTC) equity and private lenders; council members and corporation counsel noted the code already allows council discretion to approve exceptions but several members said staff should bring a county-code update to committee so the council would not have to consider case-by-case waivers.

Public comment and resources: Developer representatives asked council members to act on the exemptions because fund application deadlines — including a LIHTC application deadline noted as Feb. 13 — were imminent. Councilmember Hudgins and others said staff and applicant representatives would stay available as the items come up in committee or later on the floor.

Outcome and next steps: Both resolutions passed; councilmembers asked the administration and housing department to work with developers and state LIHTC administrators (HHFDC) to resolve structural gaps in the code so future projects can be processed more predictably.

Sources: Testimony and council discussion during the Jan. 17 meeting; statements from developer representatives and housing staff.