Funding Plans for Lāna‘i in Mayor Bissen’s Proposed Budget
Mayor Richard Bissen at a previous Maui County budget meeting.
On Tuesday, March 25, Maui County Mayor Richard Bissen introduced a proposed budget for the 2026 fiscal year (FY) totaling $1.512 billion. For Lāna‘i, the proposed budget includes several key initiatives aimed at supporting the island’s growth and infrastructure.
Lāna‘i Budget Items:
$17.2 million – The Lāna‘i Affordable Housing Project:
$10 million for infrastructure improvements and $7.2 million from the county’s Affordable Housing Fund.
$2 million – Consulting fees and environmental review for the purchase of a county-run ferry.
$1.025 million – Lāna‘i Recycling Center (Preliminary planning stage. Projected to be built in 2026 or 2027 after environmental review and obtaining permits.).
$1.5 million – Design, permitting and improvement construction for the Lāna‘i Wastewater Treatment Pond.
$975,000 – Fire Department tanker truck (replacement).
$354,421 – Lāna‘i Youth Center Inc. (increase of $85,162 from FY25).
$550,000 – Lāna‘i field house improvements.
$200,000 – Mechanic truck F550 flatbed for Lāna‘i Public Works Department.
$9,000 – Funding to upgrade PA/Radio systems for emergency notifications at the Lāna‘i Fire Station.
Introduced in previous FY and remains in the budget:
$180,000 – Youth travel for Moloka‘i and Lāna‘i.
$70,000 – Farmer’s Market food voucher program with preference for kupuna and families with small keiki.
$80,000 – Lāna‘i agriculture.
$175,000 – Lāna‘i Kina‘ole.
$82,610 – Lāna‘i Community Health Center.
Now that Mayor Bissen has introduced the proposed budget, it moves to the Maui County Council for review. The council will hold hearings where residents can provide feedback and suggest changes. By late April or early May, the council will either approve or amend the budget. The council must pass the budget by June 10. The mayor can accept or veto any changes, and the council can override a veto with a supermajority vote. Once finalized, the budget will take effect on July 1, and county departments will begin implementing it.
Lāna‘i Affordable Housing Project: What the Budget Supports
The $17.2 million allocation for the Lāna‘i Affordable Housing Project marks the most substantial step in decades toward building new homes for residents. Ikaika ‘Ohana, the nonprofit developer, plans to build 72 units: 46 single-family homes and 26 senior apartments.
Doug Bigley, president of Ikaika ‘Ohana, said building on Lāna‘i is more expensive than on other islands due to shipping costs, limited labor availability and rising insurance rates. He said state tax credit funding, which the project is applying for, requires developers to show clear market demand — but Lāna‘i’s unique housing conditions don’t fit easily into state formulas. “We need to be more convincing,” Bigley said, explaining that traditional demand metrics don’t capture the island’s long-standing shortage or the number of residents priced out of the market. A market study was conducted by Novogradac & Company to support the tax credit application.
The project’s funding strategy depends on securing state tax credits. If not awarded in August, developers plan to use the county’s infrastructure funding to begin road, water, and sewer installation this year, aiming to position the site for vertical construction in 2026.
The project includes a rent-to-own model, allowing tenants to purchase their homes after a compliance period. Final prices will be set according to HUD and county guidelines. Unit designations currently include eight units for households below 30% AMI, eight units below 40% AMI, and 52 units below 60% AMI. Developers said some may be able to go up to 80% AMI, depending on final financing.
To prioritize local residents, Councilmember Gabe Johnson said the project may use in-person applications to limit off-island interest if the county framework is not ready. He referenced Bill 111, a law passed by the Maui County Council that allows residencybased ranking for affordable housing applicants. However, Johnson said it can only be applied once the administration builds the necessary system and procedures, which are still in development.
Community suggestions during the February 12 town hall included designating a unit for an adult residential care home and incorporating a University of Hawai‘i Lāna‘i Education Center in the development’s public zone. Johnson confirmed both ideas are being explored, but further coordination is required.
Infrastructure for the public zone may not be available until 2027. The county is exploring a partnership with the Department of Defense’s Innovative Readiness Training (IRT) program to complete that portion of the work.
“This is as shovel-ready as you’re ever going to get on Lāna‘i,” Johnson said. “We need to push for this now.”
View the full meeting: https://youtu.be/rXSZdmSbmM4?si=BswLyO5N1OLtGscR