A SUPPLEMENT OF THE MAUI NEWS | FRIDAY, NOVEMBER 11, 2016
Focus on TEAMWORK Family-owned NextHome Pacific Properties serving Maui for decades
ALSO INSIDE . . . • Flood insurance foibles • Shared equity solutions • Wailea project underway A Supplement of THE MAUI NEWS – Friday, November 11, 2016 – Page T1
REAL ESTATE GUIDE | NOVEMBER 2016
Steady stream of affordable flood insurance needed decade and a couple of factors could ramp By DAVID DELEON up that Realtors Association of Maui availability Government Affairs Director question in ll kinds of variables afthe next DeLeon fect the cost and availyear. ability of housing. One of Those factors are: (1) The the components of buying a National Flood Insurance home in America is the Program is again up for availability of flood insurreauthorization by Congress ance. If you need a mortand Congress’ track record gage to buy a home, and if on reauthorizations of this that home is in an area with program over the last a potential to flood, then you decade has been dismal. (2) will likely be required to ob- The Federal Emergency tain flood insurance. The Management Administraproblem is the availability of tion has put Hawaii on noaffordable flood insurance tice that it could pull the Nahas been a hit-or-miss tional Flood Insurance Proproposition over the last gram from the state. (3) The
COMMENTARY
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Sept. 13 Wailuku River flood nearly took out the levee that protects lower Wailuku, drawing into question the viability of the levee. National Flood Insurance Program Reauthorization This reauthorization is important to housing because all federally backed mortgages — and most mortgages are federally backed — for properties in a certified flood plain are required to have flood insurance and the only flood insurance most homeowners can afford is underwritten by the NFIP. The cost and the availability of NFIP-provided insurance can serious-
ly affect these properties. The National Flood Insurance Program has to be reauthorized by Congress every five years. Despite a lot of grumbling about it being a money loser, the program had paid for itself until Hurricane Katrina leveled New Orleans and left the program with a $17 billion debt. Then in 2012, Hurricane Sandy added another $7 billion to that deficit, and just this August, record Louisiana floods caused another $8 billion in damage, much of which was not insured because areas that were not supposed to flood, did. The problem is that Congress expects this program
to pay for itself. But there are only 5 million properties insured by the program nationwide, and not counting the costs associated with the recent Louisiana flood, the program is already $24 billion in the hole. And there is real reason to be concerned that the climate has changed: Superstorms that cause massive damage are likely to be a new normal. The weather that caused the Louisiana flood was not even a tropical storm. It just started raining and in 15 hours, 31 inches (more than two and a half feet) of rain fell. The storm that hit the Iao Valley in September is being described as a “100year” storm. Was it? Or can
331 Ho’okahi St., Suite 202 Wailuku, HI 96793
Property Management Services • Real Estate Sales
shoretoshorerealty.net Wailea Elua
See INSURANCE on Page 5
Main cover image: This home located at 320 Kainoe St. in Kaanapali is being represented by Joseph Hogin of NextHome Pacific Properties. For more information, call 870-2775, email joehogin@gmail.com or visit www.joehogin.com.
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we expect more like it? For about five years, Congress could not come to grips with the costs associated with this program. It would do temporary, sixmonth extensions and then allowed the authorization to lapse, off and on for years. Finally, pressure from the National Association of Realtors, homebuilders and others built enough influence to force Congress to act. In 2012, it passed the Biggert-Waters Act (BW12) in an effort to re-authorize the NFIP while sticking to the philosophy that the program would pay for
JEN LAKE, Loan Originator NMLS #1418151 Email: Jennifer.Lake@axiahomeloans.com Website: jenlake.axiahomeloans.com Cell: (808) 215-1191
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Call Brad to schedule a showing! Bradley S. MacArthur, Principal Broker ~ Direct: 808-357-5000 The Shops at Wailea ~ 3750 Wailea Alanui Dr., Ste. B16 ~ Wailea, Maui, HI 96753 Office: 808-879-1991
A Supplement of THE MAUI NEWS – Friday, November 11, 2016 – Page T2
180 Dickenson Square, Suite 214 Lahaina, HI 96761
REAL ESTATE GUIDE | NOVEMBER 2016 “With a lot of crazy glue, we were able to survive,” she said. t NextHome Pacific Gone are the days when Properties in Kihei, agents could sit at their desks teamwork is the key to sucand wait for clients to walk cess. in. Rather, agents must seek “We work as a team in out potential clients and our office,” said Rosie work diligently to keep a Poree-Hogin, a Realtor deal together until closing. salesperson who owns the Agents need to realize franchise with husband and they are in business for principal broker Steve themselves, Poree-Hogin Hogin. “If an agent needs said, and that means hard help, someone is always work, especially since a there to help. We treat our high-tech business means clients like they are family. high-tech clients who use the Between the agent, our brointernet, and have access to kers and our transaction coMLS listings and company ordinator, the client is never websites. left out in the cold.” “The agent needs to know Steve Hogin and Rosie Photos courtesy NextHome Pacific Properties the business inside out,” she ■ NextHome Pacific Poree-Hogin started out unsaid. “Hard work vs. luck.” Properties’ Rosie der the ERA Real Estate Poree-Hogin expects that Poree-Hogin (clockwise brand in 1987, with five the market on Maui will from top left) and Steve agents in a 300-square-foot never be as hot as it once Hogin, and Joseph and office. Early on, the couple was. People are more cauJodi Hogin. decided they wanted to set tious these days, and while themselves apart from some ■ For more information, many of those who experiof the other players in the call 879-1511 or visit enced foreclosures when the market, so they went to work www.nexthomepacific market crashed are looking and “started recruiting and properties.com. to buy again, the family training like crazy,” Poreehopes that lenders will be Hogin said. said. “If you need a postcard, more discerning in approv“Within a short time, we ed to look into other franjust hit the button, and boom, ing loans. moved to a larger office and chise opportunities and you’re good to go. We emWith NextHome, though, continued to grow,” she said. found that NextHome reflected the high-tech field braced the ‘high-tech world’ the team is even better pre“Our only rule is that you that real estate had become. rather than running from it. pared to face the future. don’t lie, cheat or steal. No “With the products and second chance. That simple Wanting to give their agents The product and service are more resources to work with far above the others.” services that NextHome ofrule has worked for us and and more convenience, the Over the years, the team fers, our clients are able to for our team.” go through the process feelThat team, which also in- family knew it was the right has weathered the ups and move for their team. downs of the real estate mar- ing confident and secure,” cludes son Joseph and his “With NextHome, every- ket, from “good” in the be- Poree-Hogin said. “And wife, Jodi, became one of one has a website the moginning, to “fantastic” to that is the bottom line, makERA’s Top 50 companies. ment they sign on, all training “nosedive,” Poree-Hogin ing sure our clients are hapAfter close to 30 years py.” with ERA, the family decid- is done online,” Poree-Hogin said. By CHELSEA DUNCAN
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For The Maui News
United for success
The best ways to build credit
At family-owned NextHome Pacific Properties, teamwork sets the tone
nce, building credit meant taking on debt — someO times expensive debt like a car loan or a credit card with a high rate.
Helping the next generation make their Dreams Come True!
Emmett Rodrigues
By LIZ WESTON, NerdWallet
Today, it’s possible to build a good credit score in a year without a big chunk of cash upfront or a large debt at the end. You can make yourself look better to lenders while keeping more money in your pocket. Here’s how: Old advice: Take whatever credit you can get, even at double-digit interest rates. New advice: Start with a credit builder loan, then add a credit card to the mix. With a credit-builder loan, you build credit and savings at the same time. The money you borrow is placed in a certificate of deposit or savings account that you can
See CREDIT on Page 5 lity n Quang at ae i l t Tin ffordab A rice! P
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Two Generations of our Family Dedicated to Your Real Estate Goals
Thomas G. Delmore Principal Broker cell 283-2438 tom@delmore.net
Cell: 357-5773 email: mauiexec@hotmail.com 331 Ho‘okahi St., Suite 202 Wailuku, Hawaii 96793 www.shoretoshorerealty.net
A Supplement of THE MAUI NEWS – Friday, November 11, 2016 – Page T3
Brian K. Delmore Realtor Salesperson cell 212-7707 brian@delmore.net
Kimberly Delmore R(B), ABR, CRS cell 298-6655 kim@delmore.net
www.delmore.net
1877 Wili Pa Lp #2, Wailuku
242-1467
REAL ESTATE GUIDE | NOVEMBER 2016
Keala o Wailea selling fast
This artist’s rendering shows the recreational facilities planned for the Keala o Wailea development.
Luxury condominium complex under construction
onstruction has started C on the first three buildings at Keala o Wailea, a
as far as New York. “The project has been very well received by buyers,” said Brad MacArthur, luxury condominium complex situated on a bluff over- principal broker and owner at Wailea Realty Corp. “We looking the Wailea Blue have had strong demand Golf Course, and units are considering we have been in continuing to sell fast, aca preconstruction phase. The cording to Wailea Realty views, location and ameniCorp. ties of Keala o Wailea are As of last week, buyers the perfect addition to the have purchased 50 out of a Wailea community.” total of 70 units to be built. Keala o Wailea offers a Price points begin at $779,900 for two-bedroom, limited opportunity with just 70 apartment units that wind two-bath units and gracefully along the lushly $859,900 for three-bedlandscaped site. The private room, two-bath units, all two-and three-bedroom with ocean views. Buyers apartments, of which 14 are are a mix of residents from penthouses, are all oriented Hawaii and the Western U.S., as well as Canada and to capture the best ocean and
island views from their distinctive vantage points. Apartment spaces range from 1,241 to 1,715 square feet with lanais from 152 to 238 square feet. Five units were sold in October, with another reserved. Building 1 is now sold out, and framing is in progress. Building 2 has one unit available, and concrete foundation has been poured. Building 3 has two units available, while Building 4 still has one unit available. “One of the best parts of this project is the amazing views from this property with unencumbered ocean views as well as Haleakala
WANT YOUR REAL ESTATE LICENSE?
Photo courtesy Wailea Realty Corp.
views from many of the condos,” said Tom Tezak, broker-in-charge and owner at Wailea Realty Corp. Concrete slab foundations are being poured, and elevator shafts and framing are also in production. The first two buildings, and recreation and pool facility will
be completed and turned over by the end of 2017. Buyers have been especially excited to see that the developer will integrate photovoltaic panels in all parking structures, to help cover the common electric expense for the development. For more information
about the project, visit www.kealaowailea.com. The Keala o Wailea Sales Center is located at Wailea Realty Corp. at The Shops at Wailea. For more information, call 879-1991. To schedule a site tour, contact MacArthur at 357-5000 or brad@wailearealty.com.
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1036 Limahana Place #3L • Lahaina, HI 96761 • Tel: (808) 661-4268 www.lahainacarpets.com / sales@lahainacarpets.com
A Supplement of THE MAUI NEWS – Friday, November 11, 2016 – Page T4
REAL ESTATE GUIDE | NOVEMBER 2016 Insurance Continued from Page 2 itself. There was great relief and celebration over the passage of the bill but even before the euphoria had died down, there were already indications that the reauthorized BW-12 program had blown up. FEMA had estimated that the new BW-12 rates would be affordable, but it quickly became apparent that the nation’s insurance underwriters thought otherwise. Congress was quickly flooded with complaints from flood-prone areas around the country that the homeowner rates had jumped, in some cases, 10 times. Where an owner had previously been paying $4,000 a year for flood insurance, they were now being quoted $40,000. That’s for a maximum NFIP coverage of $250,000. The owners were trapped. They could not afford the insurance but they couldn’t sell either, to anyone who needed a mortgage. For the next two years, getting affordable flood insurance became problematic and properties in flood management areas became harder to sell. After being beat up about this by its constituents for two years, Congress in 2014 retreated from its libertarian mantra and re-did the program with subsidies built back into it so that flood insurance could again be affordable to the average homeowner. But at the time, Congress warned that the relief was temporary, that it planned to continue its quest to make the program pay for itself. And the next time that is going to happen is on its five-year reauthorization, in 2017. The folks who should be
See INSURANCE on Page 8
at Speaking of Credit. Once your scores are in Continued from Page 3 the mid-600s, you can qualclaim once you’ve made all ify for a regular credit card. the payments, which are re- Using the card for a few small purchases each month ported to credit bureaus. Many credit unions offer and paying the balance in these loans. If yours doesn’t, full will continue to build your scores. check to see if there’s a Old advice: Regular community development financial institution near you credit cards are better than that does, or investigate Self store cards for building credit. Lender, an online lender New advice: Certain that makes one-year creditstore cards may help you builder loans of $550, $1,100 and $2,200. Some- get a mortgage. Store-branded cards have one who borrows $550, for long been seen as a stepping example, would claim a stone to “real” credit cards. $550 CD after making 12 payments of $48.50, plus a Store cards typically are easier for people who are $12 administration fee. These loans can help peo- building credit to get, but ple build credit scores in the regular or general-purpose cards issued by national high 600s or even low banks are weighed more fa700s, says credit expert vorably by credit-scoring Barry Paperno, who blogs
Credit
formulas.However, if you’re building or rebuilding credit with the goal of getting a mortgage, store cards may prove more helpful. Mortgage buyer Fannie Mae now requires mortgage lenders to look more favorably on people who regularly pay off their credit card balances when that information, known as trended or time series data, is available. Unlike many big card issuers, some store-branded cards report actual amounts paid each month to credit bureaus. If getting a mortgage is important to you, call the issuer and ask if it will report your actual payment amounts to the credit bureaus before you apply. Old advice: Monitor your FICO scores to track
T
o all the people of M aui C oun ty that voted, than k you for carin g en ough an d m akin g the effort Bob and Ululani to m ake M aui C oun ty an d H aw aii a better place. By Friends of Bob Carroll, P.O. Box 157, Hana, Maui, HI 96713 Phone: 248-8269 • email: hana@hawaiiantel.net
ER NDON! U ME CTI HO TRU t s 1 ONS C
Kellie Pali-Cruz
your progress. New advice: Keep tabs with free scores and buy the right FICO before you apply for loans. FICO credit scores are used in far more lending decisions than rival VantageScores, but VantageScores have an edge for people new to credit. FICO formulas require at least six months of credit history before a score can be generated, and at least one account must have been updated by the issuer in the previous six months. A VantageScore can be calculated as soon as a person’s first account is reported to the credit bureaus, typically within 30 days of approval. A VantageScore also can be calculated for anyone with a credit account that’s been
updated in the prior two years. Many credit card issuers offer free FICOs or VantageScore. The version of the FICO they typically offer is the FICO 8, the most commonly used score in lending decisions. It’s not the FICO that most mortgage lenders use, however — they typically use older versions of the scores pulled from each of the three credit bureaus. When you’re ready to apply for a major loan such as a mortgage, you can get a better idea of how lenders are likely to view you by purchasing your scores from MyFico.com. ■ This column was provided to The Associated Press by the personal finance website NerdWallet.
Definition of paying rent – To assist someone else with paying off their mortgage If you can pay rent, you may be ready to buy a home for you and your family Call me and work with someone you can trust . . .
Realtor’s Choice Award NMLS: 328053 Recipient in 2008 from Realtors Association of Maui President/Mortgage Loan Originator Named Hawaii’s TOP Mortgage Professional – by Honolulu Magazine for HIGHEST Ranked in Customer Service and Satisfaction for 2014. TOP 6% in this field. Over 15 Years of lending here in Maui Native Hawaiian, born and raised on Maui
www.CreativeFinancialHawaii.com • Kellie@CreativeFinancialHawaii.com 320 Ohukai Road, Suite 413 • Kihei, HI 96753 • (808) 870-8731
Lots Starting at $1,350,000 Enclave of only 9 premium half acre home sites with spectacular ocean and outer island views located at the highest elevations within the Wailea Resort.
Bradley S. MacArthur Principal Broker/Owner Direct: (808) 357-5000
A&B PROPERTIES, INC.
The Shops At Wailea • 3750 Wailea Alanui Dr., Ste B16 • Wailea, Maui, HI 96753 • Office 808 879-1991 • brad@WaileaRealty.com
A Supplement of THE MAUI NEWS – Friday, November 11, 2016 – Page T5
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Front St.
West Maui HOYOCHI NIKKO C2
LEINANI APARTMENTS C2
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Lahaina
Condominium & Resort Directory
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Maalaea
Kihei G 31
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Maalaea
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KAMAOLE BEACH CLUB H7
KIHEI KAI RESORT F6
MAKANI A KAI G5
NANI KAI HALE F6
15 Wailana Place, Kihei
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2936 S. Kihei Road, Kihei
2747 S. Kihei Road, Kihei
3550 Wailea Alanui Drive, Kihei
KIHEI VIEW H7
MAUI GARDENS H6
ROYAL MAUIAN I7
Keonekai Street, Kihei
1450 S. Kihei Road, Kihei
2430 S. Kihei Road, Kihei
KIHEI VILLA H7
MAUI HILL I7
ROYAL MENEHUNE H6
2135 S. Kihei Road, Kihei
2881 S. Kihei Road, Kihei
2061 S. Kihei Road, Kihei
KIHEI VILLAGES F7
MAUI ISANA RESORT G6
SLEEPY HOLLOW H6
140 Uwapo Road, Kihei
515 S. Kihei Road, Kihei
1667 S. Kihei Road, Kihei
KIMO KE APARTMENTS I7
MAUI KAMAOLE I7
SHORES OF MAUI H6
10 Walaka Street, Kihei
2777 S. Kihei Road, Kihei
2075 S. Kihei Road, Kihei
KOA KAI APARTMENTS H7
MAUI LU RESORT G6
SUGAR BEACH RESORT F6
99 Walaka Street, Kihei
575 S. Kihei Road, Kihei
145 N. Kihei Road, Kihei
KOA LAGOON G6
MAUI OCEANFRONT HOTEL I7
VILLAGE BY THE SEA G6
800 S. Kihei Road, Kihei
2980 S. Kihei Road, Kihei
4327 S. Kihei Road., Kihei
KOA RESORT H7
MAUI PALISADES H7
WAILANA SANDS G6
811 S. Kihei Road, Kihei
Kilohana Street, Kihei
25 Wailana Place, Kihei
LAULOA G5
MAUI PARKSHORE I7
WAILEA EKAHI I7
100 Hauoli St./Maalaea Village
2653 S. Kihei Road, Kihei
3300 Alanui Drive, Kihei
LEILANI KAI H6
MAUI SCHOONER RESORT H6
WAILEA EKOLU VILLAGE J7
1226 Uluniu, Kihei
980 S. Kihei Road, Kihei
10 Wailea Ekolu Place, Kihei
LEINAALA H6
MAUI SUNSET H6
WAILEA ELUA VILLAGE I7
998 S. Kihei Road, Kihei
1032 S. Kihei Road, Kihei
600 Alanui Drive, Kihei
LIHI KAI COTTAGES I7
MAUI VIEW APARTMENTS H7
WAILEA GOLF VISTAS I7
2121 Iliili Street, Kihei
76 Walaka, Kihei
Above the Blue Course, Wailea
LUANA KAI H6
MAUI VISTA H7
WAILEA POINT J7
940 S. Kihei Road, Kihei
2191 S. Kihei Road, Kihei
4000 Wailea Alanui, Kihei
MAALAEA BANYANS G5
MENEHUNE SHORES G6
WAIOHULI BEACH HALE H6
190 Hauoli St./Maalaea Village
760 S. Kihei Road, Kihei
49 Lipoa Street, Kihei
MAALAEA KAI G5
MILOWAI G5
WAIPUILAN H6
70 Hauoli St./Maalaea Village
50 Hauoli St./Maalaea Village
1002 S. Kihei Road, Kihei
MAALAEA MERMAID G5
NA HALE KAI G6
20 Hauoli St./Maalaea Village
34 Wailana Place, Kihei
MAALAEA SURF RESORT F6
NA HALE O MAKENA J6
12 S. Kihei Road, Kihei
4955 Makena Road, Kihei
MAALAEA YACHT MARINA G5
NA HOLOKA I G6
30 Haouli St., Maalaea Village
34 Wailana Place, Kihei
Above Wailea Alanui Dr., Wailea KANA'I A NALU G5 GRAND WAILEA RESORT J7 250 Hauoli St./Maalaea Village 3850 Wailea Alanui Dr., Wailea KANOE RESORT H7 HALE HUI KAI I7 2050 Kanoe Street, Kihei 2994 S. Kihei Road, Kihei KANOELANI APARTMENTS H7 HALE ILI ILI J7 2065 Kanoe Street, Kihei 2172 Iliili Road, Kihei KAPULANI KAI H6 HALE KAI O'KIHEI H6 73 Kapu Place, Kihei 1310 Uluniu Road, Kihei KAU HALE MAKAI H6 HALE KAMAOLE I7 930-938 S. Kihei Road, Kihei 2737 S. Kihei Road, Kihei KE ALII OCEAN VILLAS H7 HALE MAHIALANI H7 28 Hauwahine Lane, Kihei 21 Kaiau Place, Kihei FAIRMONT KEALANI J6 HALE PAU HANA I7 4100 Wailea Alanui Drive, Kihei 2480 S. Kihei Road, Kihei KEALIA F6 HALEAKALA GARDENS H7 191 N. Kihei Road, Kihei 15 Kulanihakoi, Kihei KEAWEKAPU I7 HALEAKALA SHORES I7 2895 S. Kihei Road, Kihei 2619 S. Kihei Road, Kihei KEONEKAI VILLAGES H7 HO‘OLEI AT GRAND WAILEA J7 160 Keonekai Road, Kihei 146 Ho‘olei Circle, Wailea KIAWE TERRACE G6 HONO KAI G5 851 S. Kihei Road, Kihei 280 Hauoli St./Maalaea Village KIHEI AKAHI I7 ISLAND SANDS G5 2531 S. Kihei Road, Kihei 150 Hauoli St./Maalaea Village KIHEI ALII KAI I7 ISLAND SURF H6 2387 S. Kihei Road, Kihei 1993 S. Kihei Road, Kihei KIHEI BAY SURF G7 KAI MAKANI BEACH VILLAS G6 715 S. Kihei Road, Kihei Kai Makani Loop, Kihei KIHEI BAY VILLAS G7 KAI MALU AT WAILEA J6 775 S. Kihei Road, Kihei 3550 Wailea Alanui Drive, Kihei KIHEI BEACH RESORT G6 KALAMA GARDENS H7 36 S. Kihei Road, Kihei 36 Walaka Street, Kihei KIHEI COVE I7 KAIAMA TERRACE H7 2181 Iliili Road, Kihei 35 Walaka Street, Kihei KIHEI GARDEN ESTATES H6 KALAMA TOWNHOUSE H7 1299 Uluniu Road, Kihei 46 Walaka Street, Kihei KIHEI HOLIDAY G6 KALAMA VILLA H7 483 S. Kihei Road, Kihei 2144 Konou Place, Kihei
1
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Wailea
Makena
How To Use This Map The condominiums & hotels in West Maui and South Maui are listed here in alphabetical order according to region. A grid letter and number coordinate is listed with each property for map location. Be advised that street addresses are not necessarily the correct mailing address. (Example: Addresses in the Maalaea area are served by Rural Route Delivery from the Wailuku Post Office.)
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In Today’s Real Estate Market There’s No Substitute For Experience Joseph Hogin, Broker RB-19018 Jodi Hogin, Broker RB-19011 Direct: 808-870-2775 Next Home Pacific Properties BuyaHomeOnMaui.com
Steve Hogin, Principal Broker RB-12320 Rosie Poree-Hogin, R(S) RS-24773 Direct: 808-879-1511 Next Home Pacific Properties nexthomepacificproperties.com
Serving the Islands for over 30 Years 1279 S. Kihei Rd., #119, Azeka Mauka, Kihei, HI 96753 A Supplement of THE MAUI NEWS – Friday, November 11, 2016 – Page T7
REAL ESTATE GUIDE | NOVEMBER 2016 administrator for insurance and mitigation. Given that much of Hawaii’s coastal development faces threats from tsunami and hurricanes, and given that many mortgages in Hawaii require flood insurance, the chances that our state Legislature will ignore this federal threat seems unlikely. The question appears to be more a matter of whether they just repeal HRS-46-88 or try to massage the law so that the farmers do not lose the full value of the exemption. Maui County administrators say that HRS 46-88 only exempted farmers from building permit requirements, not flood management certification or Shoreline Management Permit requirements. That may be true, but it may also be a bit too subtle a distinction to make in the face of such a harsh, uncompromising statement from FEMA. FEMA seems to be saying that because of this new law, the counties have lost control over who is building what in the flood plain — as required by their 35-year agreement with FEMA. The
state that HRS 46-88 violated the state’s flood management agreement with FEMA. If the problem was the most concerned about this are the owners of prop- not fixed by July 31, 2017, erties in areas that the feder- FEMA would terminate its flood insurance program and al government considers its federal disaster assistance likely to flood. On Maui, those include properties near program in Hawaii. The warning was a harsh, streams and gulches (espeblunt take-it or leave-it. It cially in South Maui) and was startling because no one along the coast. Until the in Hawaii had a clue that federal government comes to grips with the fact that the there was a problem before the threatening letter arrived. problem is bigger than the rate-paying base can cover, There had been no attempt to give the state a heads-up. you can anticipate more “Suspension from the misguided legislation, like NFIP will result in the loss the Biggert-Waters Act of of NFIP flood insurance 2012 turned out to be. coverage for Hawaii communities. Hawaii currently FEMA Threatens To Pull has four communities (counFederal Flood Insurance ties) participating in the Out of Hawaii The following falls under NFIP with nearly 60,000 flood insurance policies in the rubric of “unintended force and over $13.2 billion consequences.” In 2012, the Hawaii State in flood risk covered ... If a Legislature passed Act 203, flood disaster occurs in a suspended community, most a simple act that exempted types of federal disaster asfarm structures (like barns, packing sheds, feed storage) sistance are not available for acquisition, construction or from the requirement for repair of insurable structures county building permits. within (flood zones), includThe counties were not ing federal assistance to inpleased, but the law (HRS dividuals and households for 46-88) went in effect and everyone forgot about it — housing and personal propuntil this April when FEMA erty,” wrote Roy E. Wright, FEMA’s deputy associate wrote Gov. David Ige to
Insurance
Continued from Page 5
See INSURANCE on Page 12
Valley Isle Community FCU
Home Equity Line of Credit • No closing cost fees • No Annual fees • Loan amounts up to $250,000 • 7 Year draw period • Up to 15 Year repayment terms
3.99%
AP file photo
While you don’t need to own a house to be happy, many of us still want a place we can be proud of.
Ask Brianna:
Will I ever be able to afford a house? By BRIANNA MCGURRAN NerdWallet
sk Brianna” is a “A Q&A column from NerdWallet for 20-some-
things or anyone else starting out. I’m here to help you manage your money, find a job and pay off student loans — all the realworld stuff no one taught us how to do in college. Send your questions about postgrad life to askbrianna @nerdwallet.com.
Q: Affording a house seems out of reach. Will I ever be able to buy a
APR* Picture yourself with a great Rate!
Wailuku Branch 240 Lepoko Place Wailuku, Maui, HI 96793
(808) 677-2641 (808) 877-3232 (808) 244-7354 *Annual Percentage Rate. Some restrictions apply. Federally Insured by NCUA
See BRIANNA on the next page
Business (808) 891-0785 Fax (808) 891-0788 1325 S. Kihei Road, Suite 221 Kihei, Maui, Hawaii 96753 website: www.mauitropicalrealty.com
Apply at any of our three Branch locations today! Kahului Branch 160 Pa‘ahana Street Kahului, Maui, HI 96732
ment. First-time homebuyers are four years older than they were in the late 1970s and rent longer before buying, according to research by real estate website Zillow. Median incomes for first-time buyers didn’t change much between 1978 and 2013, but the median home price for that group went up more than $40,000. So here we are, fellow 20- and 30-somethings, eager to buy homes but unable to afford them.
M auiT ropical R ealty
*The Annual Percentage Rate is based on the value of an Index. The index is the monthly average of the Six Month Treasury bill rate. To determine the annual percentage rate we add a margin of 3.00% to the value of the index. The Annual Percentage Rate of 3.99% is current as of 7/1/2016. The minimum credit line is $10,000 and the maximum credit line is the lesser of $250,000 or 80% LTV minus the balance of your existing mortgage. Valley Isle Community FCU will pay on behalf of the borrower certain third party fees (e.g. real estate evaluation, recordation, documentation, title search, escrow and flood determination), estimated to be from $900 to $2,500. There is no transaction or other activity charge. Property insurance is required. Membership in the credit union is required. Rates, terms and conditions are subject to change without notice. Other terms and conditions apply. Speak to a credit union representative for more information.
Lahaina Branch 40 Kupuohi #102 Lahaina, Maui, HI 96767
home of my own? A: I’ve asked myself this question too many times to count, maybe because I know homeownership wasn’t always so hard to achieve. My parents bought their three-bedroom house on Long Island in 1978 for $46,000, or $169,782 in today’s dollars. My dad was a truck driver, and my mom was an artist, both in their late 20s. Now, nearly 40 years later, I’m also in my late 20s, but I drop off a rent check each month instead of making a mortgage pay-
Wesley J. Barut Principal Broker Call (808) 870-5821 email: mauitrop@aol.com
A Supplement of THE MAUI NEWS – Friday, November 11, 2016 – Page T8
Valerie Ann Abac Realtor Broker / Property Manager Call (808) 870-5830 email: vamilion@aol.com
REAL ESTATE GUIDE | NOVEMBER 2016
Shared Equity A strategy for building wealth while maintaining affordability in perpetuity By TOM BLACKBURN-RODRIGUEZ you spend enough time attending Maui IandfCounty Council meetings on planning housing issues, you may pick up someFor The Maui News
thing you don’t know. Recently, one of those things was an affordable housing concept called “shared equity.” When did it start? Where has it been successful? What did it mean, exactly? Who defines “equity”
Brianna Continued from Page 8 It’s not your imagination. The most recent data for median existing home prices shows they reached a new high of $244,100 in July, according to the National Association of Realtors. Low interest rates have kept monthly mortgage payments affordable by historical standards, says Jonathan Spader, senior research associate at Harvard’s Joint Center for Housing Studies, but higher home prices make it tougher to cobble together a down payment. That’s especially true when student loan payments and high rents drain our
and who decides how to share it? What about improvements a family may have made in their home since they acquired it? Where did shared equity start and where has it been successful? First of all, “shared equity” is really shorthand for “shared-equity homeownership.” In an article written by John Emmeus Davis for the Encyclopedia of Housing (Second Edition), shared-equity homeownership is described as “…a generic term for various forms of resale-restrict-
bank accounts. A record 21.3 million renter households allocated more than 30 percent of their pretax incomes toward housing in 2014, reports the Joint Center for Housing Studies, a 44 percent increase from 2001. While you don’t need to own a house to be happy, many of us still want a place we can be proud of. It’ll take some creativity, but it is possible to buy a house someday. Here’s how. Save longer: If you want to settle in an expensive area long term, you’ll have to save diligently and feel comfortable waiting longer to buy, which is what I’m doing. A down payment averages 24 percent of the
home’s purchase price in high-priced locations, according to real estate data firm RealtyTrac. That makes the down payment one of the biggest hurdles to overcome if you’re angling to live in a competitive market, where mortgage lenders look for more money down as an indication that you’re an attractive buyer. Sock away a portion of your annual bonus from work, or increase the amount you save whenever you get a raise or quit subscription services you don’t use. Set up an automatic transfer into a savings account designated for your down payment so it grows without much effort.
ed, owner-occupied housing in which the rights, responsibilities, risks and rewards of ownership are shared between an incomeeligible household who buys a home at a below-market price and an organizational steward who protects the affordability, quality and security of that home long after it is purchased.” That organization is generally a community land trust. The term shared-equity homeownership grew out of a movement led by the National Housing Institute that argued that too much time was being spent on trying to increase homeownership by trying to lower mortgage payments and/or by gaining access to credit. The NHI pointed to non-market models of homeownership. According to the NHI, these models restricted the price of publicly assisted, privately owned homes and did so across multiple re-sales while Look into first-time homebuyer programs: Those strategies might not be enough to reach your down payment goal. If you’re eager to buy a house soon, government-sanctioned companies Fannie Mae and Freddie Mac will let you make a down payment of just 3 percent of the home’s price. The Federal Housing Administration also offers mortgages that require down payments of 3.5 percent. Local housing counseling agencies can tell you what programs you qualify for and whether down payment assistance is available in your area, Spader says. You’ll need to weigh the trade-offs of a smaller down
See EQUITY on the next page
payment. You’ll pay mortgage insurance if you put less than 20 percent down, for instance, which increases your monthly mortgage payment. A mortgage calculator can help you figure out what monthly payment you can afford. Search in affordable locations: You might be able to have your long-awaited housewarming party sooner than us coastal dwellers — without stretching your budget to its limit — if you live in or move to a region known for its affordability. A September 2015 report by real estate website Trulia found that eight of the 10 most affordable cities for homeowners were in the Midwest, for instance, while
seven of the 10 least affordable cities were in California. The median home price in the Midwest was $194,000 in July, according to the National Association of Realtors, about $50,000 less than the national median. Lower prices mean lower down payments and a mortgage that won’t take a huge chunk of your income. Living in a lower-cost area isn’t the right choice for everyone, but it’s an option if you’re ready to put down roots sooner than a higherpriced city will allow. ■ This column was provided to The Associated Press by the personal finance website NerdWallet.
Happy homeowners start here.
Cathy Pellazar REALTOR (S)- RS #13566
Cell: (808) 276-2666 FAX: (808) 442-9000 Email: islandmauiproperties808@gmail.com Wailea Office 100 Wailea Ike Drive, Suite #6 Wailea, Hawaii 96753
maintaining their affordability for many years. The NHI adopted the term: “sharedequity homeownership” in 2006 to describe this model of homeownership. The term has now gained general acceptance. There are four elements that define shared-equity homeownership: (1) The occupants are owners, (2) Equity is shared, (3) affordability is preserved and (4) There is a stewardship organization in place to ensure the terms of any agreement are met. Davis’ article describes how “the NHI was attracted to the term by its emphasis on how the appreciating value of residential property is routinely created and to whom it rightfully belongs. Only part of a property’s unencumbered value is a product of an owner’s personal investment in purchasing and improving the property. The rest is a
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808-879-0922 • 808-879-6280
A Supplement of THE MAUI NEWS – Friday, November 11, 2016 – Page T9
All loans subject to approval.
REAL ESTATE GUIDE | NOVEMBER 2016 in the home at resale, reducing its price for the next inContinued from Page 9 come-eligible buyer. There product of the community’s is, in effect, an intergenerational sharing of equity investment: equity conacross successive owners of tributed at the time of purthe same home; hence the chase in the form of a public name shared-equity homegrant, charitable donation or municipally mandated con- ownership for models of housing designed to achieve cession from a private dethis fair allocation of properveloper; and equity accruing ty-based wealth.” to the property over time beBut where has it worked? cause of the public’s investTo get that answer we first ment in necessary inframust go to the state of Verstructure and society’s overmont and the city of all growth and development. Burlington. There, the “CLTs, LECs and other Champlain Housing Trust, forms of resale-restricted, formerly the Burlington owner-occupied housing en- Land Trust, between 1984 deavor to lock this socially and 2008, with the support created value in place. In of the local government deshared-equity housing, veloped and marketed 424 homeowners claim only the single-family homes and equity they created through condominiums. Their first their own dollars or labors. resale was in 1998 and by The rest of it, including the June of 2008 they had comentirety of any public subsi- pleted the resale of 205 dies put into the property houses and condominiums. and a majority of any marA study completed by the ket gains in value, remains New American Foundation
Equity
Kaulana Noa works on improving the entry sidewalk to his new home as his young son gives advice. Making improvements to their home is one strategy the Noa family used to build shared homeownership equity in their journey from a Na Hale O Maui community land trust home to a market-priced home in Kahului. demonstrated that “public subsidies invested in CHT’s houses and condominiums remained in the homes at resale, underwriting their affordability for subsequent generations of lower-income homebuyers.” An initial
public investment of $2,172,207 in homes that resold one or more times allowed CHT to bring homeownership within the reach of 357 lower-income households. The study reported that occupancy, use and re-
sale controls remained in place for 96.7 percent of the 424 units of owner-occupied housing developed by CHT between 1984 and 2008. There have been concerns expressed since the development of shared-equity homeownership that the restrictions on reselling properties would create a form of second-class homeownership. If middle- and upperclass people could build wealth off their houses, why should the working class be limited to shared- equity? The counter argument has been that households would only be able to stop paying rent and begin building equity and wealth through homeownership if initially they could afford to buy a home. Advocates argued that the CLT model, based on shared-equity, was a concept that worked and built wealth for low-income families in the process.
The New America Foundation study addressed the wealth-building impact of shared-equity homeownership and found that “the lower-income households who initially bought CHT’s homes generally made a personal investment of no more than 3 percent of the belowmarket price of their homes. Because these homes sold at less than their appraised value, the average buyer’s initial investment represented only 2.3 percent of the appraised value at the time of sale. At the time of resale, the average homeowner’s outgoing home equity was equal to 9 percent of the (appreciated) appraised value of their home. In other words, homebuyers who started with only 2 percent of the market value of their house or condominium ended up less than six years later with cash equal to 9 percent of its value. The average CHT seller, over the entire period of 1988 to 2008, left with $13,503 in equity. Homeowners selling in 2004 to 2008 received an average of $21,192.” But, what about the shared-equity deed restriction homeownership concept as it applies to Maui Nui? Is it right for all affordable housing projects and organizations? To get the answer to that question and more, I turned to two experts in the field of workforce housing, Cassandra Abdul, executive director of Na Hale O Maui, a community land trust, and Sherri Dodson, executive director of Habitat for Humanity, an international organization building homes for low-income households, using the families “sweat equity” contribution of time and labor to help keep the homebuilding cost low. Testifying before the Maui County Council on
See EQUITY on the next page A Supplement of THE MAUI NEWS – Friday, November 11, 2016 – Page T10
REAL ESTATE GUIDE | NOVEMBER 2016 Equity Continued from Page 10 Oct. 27, Dodson described the current Habitat deed restriction policy as a 30-year restriction with no appreciation for the first 10 years and then a 5 percent shared appreciation starting on the 11th year. There is an owner-occupied restriction as well as a right of first refusal clause. She went on to testify, “It is Habitat’s theory that with all the sweat equity put in by the family and with a 30year deed restriction, this is adequate to assure that the home will not be ‘flipped.’ The owner-occupied and right of first refusal clauses are additional assurances that the families will remain in the home. The restriction also includes any refinance of the house. Even to pull money out of the house, the family must consult with Habitat, and Habitat has the ultimate say if they can refinance.” Dodson told the Council that any change in Habitat’s deed restriction policy is an additional burden being placed on low-income families. “With this as their only source of wealth, it is the only thing that they can pass onto their children,” she said. “To restrict what that asset is worth after all the sweat equity they put into it just because they are low income seems over-burden-
some. Habitat for Humanity Maui has never had a family try to sell their home.” Abdul’s community land trust has shared-equity homeownership at the core of its efforts to acquire and build truly affordable workforce housing. “Shared equity is the means by which our homeowners may share in the appreciation of the property. It is also the means by which affordability is maintained in perpetuity, buyer after buyer, and generation after generation,” Abdul said when interviewed for this story. A community land trust is an independent nonprofit 501(c)(3) tax-exempt membership organization run by an elected board of directors. The mission of the organization is to provide a permanent supply of affordable housing alternatives for low- and moderate-income residents of Maui. The CLT acquires and retains ownership of the land and sells the home to individual homeowners through long-term 99-year renewable ground leases that can be passed down to their heirs or income-qualified buyers. Abdul notes that the NHOM resale formula is calculated in two steps and thoroughly explained and vetted with the NHOM owner. The first step is calculating the sale ratio by dividing the NHOM sale price by the
This home is the latest NHOM sale in Kahului. The three-bedroom, two-bath home has 1,080 square feet of living area on a 7,501-square-foot lot. Back and side yards are fenced. The interior was freshly painted, new counter tops, sinks and faucets and new dual-glazed windows were installed, and a new range and refrigerator were purchased along with wooden window blinds. The sale includes an existing solar hot water heater. appraised value. Say the home sells for $300,000 and the appraisal opines a value of $400,000 (just for ease of calculations.) This creates a ratio of 75 percent (300,000/ 400,000 = 75 percent) NHOM obtains a new appraisal when the family is ready to sell. In this example, the new appraisal opines a value of $500,000. Thus, the property has increased in appraised value by $100,000 (500,000 – 400,000 = 100,000.) They next apply the ratio of 75 percent to the $100,000 appreciation that equates to $75,000. The second step multiples the $75,000 by the shared appreciation (SA) factor of
25 percent up to 50 percent in the 15th year of ownership. For this example, let’s say the family wants to sell in the fourth year. We apply the 25 percent SA factor to the 75,000 that equals $18,750. This is the first family’s share of the equity. The family would have to repay any down-payment assistance grant (repayment eliminated at the end of the15th year) and would receive any remaining eligible capital improvement credit. This example assumes no grant, no excessive damage and no ECI credit, allowing the first family to close the sale with their portion of the shared appreciation, original down payment and principal paid over the life of the loan,
(realized when the mortgage is paid off.) NHOM has now successfully repurchased two CLT homes using the shared-equity formula described above. In each case the family, using the NHOM sharedequity formula was able to meet the realities of marriage, a growing family, job relocation and the need for a larger home as the family grew. The latest NHOM repurchase in Kahului allowed the family to buy a larger, market-priced home. This was possible because the family could save for a down payment due to their reasonable CLT mortgage payments and the shared equity realized in the resale formula. CLT household ex-
penses may not exceed 35 percent of gross income That CLT home was appraised for resale to an income-qualified buyer at $495,000 with the NHOM affordable sale price of $260,000. The three-bedroom, two-bath home has 1,080 square feet of living area on a 7,501-square-foot lot. Back and side yards are fenced. The interior was freshly painted, new counter tops, sinks and faucets and new dual-glazed windows were installed, and a new range and refrigerator were purchased along with wooden window blinds. The sale includes an existing solar hot water heater. Based on the evidence so far, shared-equity homeownership is working well on Maui and while not a deed-restriction policy choice for every organization or affordable housing project. The evidence shows that shared-equity homeownership builds wealth for low- and median-income households while preserving home affordability across generations and many repeated sales. The public subsidy required to acquire and build NHOM homes is a one-time investment that does not have to be made over and over again. ■ Tom Blackburn-Rodriguez is a non-profit and business consultant active in affordable housing issues for over a decade.
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Team “Kas” & Tara #Who’s your favorite Realtors?
KIMBERLY KAWACHI
Leslene K. Lopez, PB
NMLS ID# 742851
ABR, SFR | RB-21780
Home Mortgage Loan Officer Kimberly.Kawachi@homestreet.com www.homestreet.com/kkawachi 808-250-9046
All loans subject to approval.
808.873.8971 Office 808.870-1984 Cell www.ponorealestate.com leslene@ponorealestate.com 355 Hukilike St., #206 Kahului, HI 96732
A Supplement of THE MAUI NEWS – Friday, November 11, 2016 – Page T11
Mark “KAS” Kasbergen RS-42258 Tara Mathews RS-77099
280-1145 Kasandtarasellmaui@gmail.com
REAL ESTATE GUIDE | NOVEMBER 2016 667-7748
www.MindsEyeInterior.com Lahaina
Iao Stream back to Wailuku River. Wailuku means “waContinued from Page 8 ter of destruction.” After Katrina and a varionly way of regaining that ety of floods in the Missiscontrol appears to be sippi River valley in 2012, through the building permit FEMA decided that earthen process. levees like the one defendProbably the one question ing Lower Main would not outstanding will be whether stand up to a 100-year those landowners who acted storm and announced that it on HRS 46-88 will be rewould no longer recognize quired now to obtain an afthem as flood protection. ter-the-fact building permit Maui County and other jufor their structures. risdictions around the counGetting this straightened try objected and a comproout and renewing Hawaii’s mise was reached. The positive relationship with the counties were required to National Flood Insurance show, through an engineerProgram will be a test of the ing certification, that their Ige administration’s leader- levees would in fact stand ship. FEMA gave the state a up to a 100-year storm. firm deadline of July 31, Maui County also has an2017, to make it happen. other levee review going on for Kaunakakai on Molokai. Question Raised or Earlier this year FEMA anAnswered by the Sept. 13 HOME LOANS FROM AMERICAN SAVINGS BANK nounced that it was not waitWailuku River Flood ing on the county’s study for Right now, much of that system and declared Wailuku is not required to Molokai’s urban center to be have flood insurance bein the flood plain. That cause the town is protected means that flood insurance by a federal Corps of Engiis required on most new neers-designed flood control mortgages in Kaunakakai. If project. The portion of the the county’s levee study ultiAl Alfonzo Virgie Barbero Lisa Carillo project that runs through mately shows that the KauNMLS #477498 NMLS #477417 NMLS #685883 Happy Valley is cementnakakai levee can protect (808) 344-8439 (808) 385-4558 (808) 463-2296 lined. From the Millyard the town, then it will be posdown to the sea, it is a thick sible to remove the flood earthen berm, called a levee. plain designation, said Maui After the Sept. 13 flood, the County Flood Manager Carlevee got a lot thinner, but it olyn Cortez. did hold. If it had failed, Meanwhile, Lower Main then Iao Parkside, the Lower remains outside of the flood Eric Miyajima Byron Yap Main business district and Kisha Kawakami plain, meaning flood insurVP / Loan Manager NMLS #860092 NMLS #470759 the Wailuku Industrial Dis- ance is not required — yet. NMLS #470761 (808) 280-3491 (808) 281-8099 trict would have flooded. There are two ways to (808) 280-6444 Lives could have been lost. look at the recent Wailuku The storm was an amazflood. One is that it qualified Ask about our current first-time home buyer promotion ing event that seemed to fo- as an official 100-year that can help you save on closing costs! cus on Iao Valley and some storm, an engineering term less-populated west side val- meant to distinguish it as a leys. At one point the rain particularly unique event, came down at a rate of 1.5 like something that would inches every 15 minutes. only happen every 100 Upper-valley residences years. If the Sept. 13 event Member FDIC were severely damaged and meets that 100-year qualifiasbhawaii.com the stream cut a new course. cation, then the Lower NMLS #423168 Some folks wondered aloud Wailuku levee has already NMLS #423168 if it had been such a great demonstrated that, in fact, it idea to change the name of can withstand a 100-year A Supplement of THE MAUI NEWS – Friday, November 11, 2016 – Page T12
Insurance
F urn ish in g your h om e w ith style.
storm and should be certified. The other way of looking at is that if the storm had maintained its intensity for another couple of hours, it is likely that the levee would have failed. At one point the levee was narrowed down to 17 feet. Public Works Director Dave Goode said that wherever the river turned, the levee’s banks were blown out. But ultimately, the levee held and as soon as the stream calmed down the county crews and contractors restored those blown banks, armoring them with concrete and river rock, making them more secure than they were before the storm. The speed with which the county worked to restore the levee showed both the seriousness the county engineers attached to the storm damage and their capacity to act quickly in an emergency. Part of that seriousness came from the fact that the intensity of the storm had been so unprecedented and because the weather conditions at the time appeared so radically different than usual. They simply had to get the levee ready for the worst-case scenario, whatever and whenever that might be. That, I guess, is the lesson for us all. Babbling brooks like Iao Stream can become raging Wailuku Rivers in a matter of minutes. A good reason to have flood insurance. ■ David DeLeon, the government affairs director of the Realtors Association of Maui, is a former Maui News reporter and served as an executive assistant to Mayors Linda Lingle and Alan Arakawa. He can be reached at gad@ramaui. com.