Restrictions on buying and selling workforce housing units

A. Timing of completion. 1. Residential workforce housing units must be made available for occupancy either before or concurrently with market rate units at the same ratio required of the development. 2. Certificates of occupancy may not be issued and final inspections may not be passed for the market rate units unless certificates of occupancy are issued and final inspections are passed for the residential workforce housing units concurrently or sooner. B. Deed restrictions. 1. Multifamily or two-family ownership units within each income group are subject to the deed restrictions contained in this section for the following periods: a. "Below-moderate income," which are those households whose gross annual family income is more than 80 percent, but not more than 100 percent of the area median income as established by HUD, or as adjusted by the department, for Hāna, Lāna‘i, and Molokai: 12 years. b. "Moderate income," which are those households whose gross annual family income is more than 100 percent, but not more than 120 percent of the area median income as established by HUD, or as adjusted by the department, for Hāna, Lāna‘i, and Molokai: 10 years. c. "Above-moderate income," which are those households whose gross annual family income is more than 120 percent, but not more than 140 percent of the area median income as established by HUD, or as adjusted by the department, for Hāna, Lāna‘i, and Molokai: eight years. 2. Single-family ownership units within each income group are subject to the deed restrictions contained in this section for the following periods: a. "Below-moderate income," which are those households whose gross annual family income is more than 80 percent, but not more than 100 percent of the area median income as established by HUD, or as adjusted by the department, for Hāna, Lāna‘i, and Molokai: 15 years. b. "Moderate income," which are those households whose gross annual family income is more than 100 percent, but not more than 120 percent of the area median income as established by HUD, or as adjusted by the department, for Hāna, Lāna‘i, and Molokai: 12 years. c. "Above-moderate income," which are those households whose gross annual family income is more than 120 percent, but not more than 140 percent of the area median income as established by HUD, or as adjusted by the department, for Hāna, Lāna‘i, and Molokai: 10 years. 3. Ownership units on County-owned land will be subject to the deed restrictions contained in this section in perpetuity. 4. For the deed-restricted period, the following apply: a. The owner must notify the department upon a decision to sell. b. Upon the owner's decision to sell, the County has the first option to purchase the unit from the owner; the option will be available to the County for a period of 60 days from receipt of written notice from the owner. c. Upon sale of the unit, the deed restrictions remain in full force and effect for the remainder of the deed-restricted period that began at the time of the initial sale. d. The department must set the maximum resale price using the following guidelines: i. An appraisal of the property is required before occupancy. ii. A second appraisal is required upon a decision to sell the unit. iii. Twenty-five percent of the difference between the two appraisals must be added to the owner's purchase price. e. An owner of a residential workforce housing unit that is being resold must sell the unit to an income-qualified household and notify the department of the sale. The department must approve the sales price. f. In situations of foreclosure, the County has the first option to purchase the residential workforce housing unit from the mortgage holder. The mortgage holder must provide written notice to the director of the County's opportunity to purchase the unit. The director must notify the mortgage holder of the County's intent to purchase the unit in writing within 90 days of receiving notice. If the County declines to purchase the unit, the restrictions in subparagraphs 4a through 4e do not apply. C. Ownership units must be occupied by the owner in perpetuity or used in perpetuity as a long-term rental under section 3.48.466 , with rent no more than HUD's current affordable rent guidelines by unit size for a family of four at 100 percent of the area median income, not including utilities and without income restrictions, unless the director finds the requirement would cause undue hardship, including one or more of the following: 1. The owner is assigned to active military duty. 2. The owner has medical needs requiring relocation. 3. The owner is temporarily employed outside of the County. The director must submit an annual report to the council of the waivers to the requirement granted for undue hardship under this subsection and the reasons for granting the waivers. D. Sales price - dwelling units. 1. The sales price of a new dwelling unit must be established by the department using the current HUD area median income for Maui County and adjusted for very low, low, below moderate, moderate, above moderate, and gap income ranges. The sales price must be calculated using estimated total housing costs capped at 31 percent of gross annual income within each range when a developer receives direct County subsidies in accordance with section 3.35.040 . Total housing costs include principal, interest, real property taxes, homeowner's insurance, mortgage insurance, and homeowner's association dues. 2. The sales price must be calculated using only principal and interest capped at 28 percent of gross annual income within each range when a developer does not receive direct County subsidies. 3. The department must create a program within the homeowner programs revolving fund to ensure affordability of units for buyers of workforce housing in projects that have been priced according to paragraph (D)(2). Subsidies from this program must be used to subsidize qualified buyers in an amount necessary so that a recipient's final estimated total housing cost does not exceed 31 percent of their household income. Subsidies from this program may be in the form of loans, grants, deferred mortgage payments, or any other mechanism the council finds appropriate. Any proposed subsidy to a homebuyer from this program must be administered in accordance with chapter 3.34 . 4. The council may authorize a waiver of any provision of this chapter by resolution approved by two-thirds of its members. ( Ord. No. 5875 , § 4, 2025; Ord. No. 5662 , § 2, 2024; Ord. No. 5441 , § 2, 2022; Ord. No. 4782, § 1, 2017 ; Ord. No. 4338, § 2, 2016 ; Ord. No. 4235, § 2, 2015; Ord. No. 4177, § 8, 2014; Ord. 3418 § 1 (part), 2006)