A community land trust is one way to provide affordable housing for Lahaina families that lost their homes to the Aug. 8 wildfires.
A community land trust is a nonprofit that acquires affordable housing or the land on which to build affordable housing. The trust sells homes at discounted prices to qualified buyers who receive long-term leases for the land, often for 99 years.
Maui is already home to Hawai‘i’s first community land trust, Na Hale O Maui, which has sold 48 affordable homes since forming in 2006 and recently acquired two more that will be renovated and sold to local families.
Na Hale O Maui had developed 12 new homes and acquired three others in the Kahoma subdivision of Lahaina that were all sold to local families three years ago for between $390,000 and $460,000. But 14 of the 15 houses were destroyed by the wildfires and the only one left is uninhabitable because fire destroyed the area’s infrastructure, says Executive Director Cassandra Abdul. All of the residents evacuated safely but some may not be able to stay on Maui until it’s time to rebuild, she says.
Cassandra Abdul is executive director of Na Hale O Maui, a community land trust. | Photo: courtesy of Na Hale o Maui
“We’re focused on helping our homeowners through the recovery in any way that we can,” says Abdul. That includes providing them – many of them first-time homeowners – with information and helping them understand insurance and other issues.
Na Hale O Maui got its start during another crisis, the Great Recession of 2007-2008, with funding from federal programs. The nonprofit’s revenues today include funds from the federal, state and county governments as well as donations. Dozens of local companies and individuals donated to the development of the Kahoma Homes and, two years ago, Amazon founder Jeff Bezos, who bought an estate in Mākena, donated nearly $500,000 to Na Hale O Maui.
“We started off by buying foreclosed and abandoned homes, rehabbing them, and then selling them to income-qualified families at below-market price,” says Abdul, who is also a Realtor. “We retain the land-right in perpetuity and give the homeowner a 99-year renewable lease.”
17 Lots Ready for Development
When buying foreclosures got too costly, the nonprofit started developing new homes, such as the Kahoma Homes in Lahaina. The land trust’s next development will be at the Fairways at Maui Lani, where the County of Maui is donating 17 lots ready for development.
Homeowners earn a reduced equity, based on how much they put into the purchase, but they don’t have to pay for the cost of the land in the down payment or mortgage payment, says Abdul. Seven homeowners have sold their homes since the program started, and Abdul says each walked away with a profit, and some were able to trade up to market-priced fee-simple homes.
Buyers are required to put 3% down and pay 2% toward closing costs, for a total of 5% of the purchase price, but Na Hale O Maui will give buyers conditional grants of up to $10,000 if they don’t have enough cash to close. The amount becomes a lien on the property for 15 years. If the buyer remains an owner-occupant and doesn’t sell the home, the grant is forgiven at the end of the 15 years, Abdul says.
“For the families that lost their homes, we are going to increase that cap” of $10,000, she says, when they are ready to rebuild. “We need to help them out a little bit more. We can’t do everything, but we’ll do whatever we can to assist them and help them be successful.”