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Hawaii: Never a shortage of costly and grandiose project proposals
By Grassroot Institute @ 4:48 PM :: 1489 Views :: Maui County, Development, Land Use

Maui event: ‘How to facilitate more homebuilding in Hawaii’

from Grassroot Institute of Hawaii, February 1, 2024

There’s no shortage of grandiose and costly project proposals that are purported to be the solution to Hawaii’s housing shortage. 

But at two recent events on Maui and Hawaii Island, Grassroot Institute President and CEO Keli‘i Akina and Grassroot policy researcher Jonathan Helton made a pitch on how to facilitate homebuilding in Hawaii at no cost to taxpayers. 

“Many people ascribe the shortage of housing to a lack of land or to certain consumer groups purchasing and owning housing, but that’s not the real problem,” Akina told audience members at the Maui Arts & Cultural Center in Kahului, Maui, on Jan. 23. “The real problem is the level of government regulation.” 

Helton, author of the Grassroot Institute’s newest policy brief, “How to facilitate more homebuilding in Hawaii,” outlined specific reforms that could help solve the state’s housing shortage. 

One key reform suggested by Helton was “upzoning,” or allowing denser housing to be built on land previously zoned for less density. Examples of upzoning include reducing minimum lot sizes, increasing floor area ratios and allowing lot-splitting. 

“When the county tells home builders, you have to have X amount of land under a home, it’s mandating a certain amount of yard space. That increases the cost,” explained Helton. “Allowing smaller houses can help with affordability and can help get more houses built.” 

Helton also recommended reducing or eliminating parking minimums, which would allow homeowners and businesses to freely determine appropriate parking levels by considering their opportunity costs. 

Helton also advocated “by-right” development and self-certification of building permits as ways to streamline the homebuilding process, reduce delays and encourage more homebuilding. 

Akina said the point of the report is that “there are things we can do right now that simply require us to be a little more efficient and to pull back on some of the regulation. When we add them all up, they virtually solve our housing shortage problem by allowing the supply of housing to grow.”

TRANSCRIPT

1-23-24 Keli‘i Akina and Jonathan Helton in Kahului, Maui, on “How to facilitate more homebuilding in Hawaii”

Keli‘i Akina: Well, aloha friends. It’s great to see you here at the Maui Arts & Cultural Center. We’re Grassroot Institute and we’re so grateful for many of you coming out, members and guests and others.

I’m Keli‘i Akina, president of Grassroot Institute. I’m also a trustee of the Office of Hawaiian Affairs, but I’m here today in my private capacity with the Grassroot Institute.

We tremendously appreciate the support that you have given us on the island of Maui. And now, as a result of our being able to come here regularly over the last ten years, there are hundreds of Maui residents who are standing with the Grassroot Institute. 

Across the state, we have a large number who receive our weekly newsletter — about 45,000 people. We have about 520 financial supporters and we have you, here on Maui.

And our heart breaks over what has happened during the last year. So many of us have been touched through friends, family and very directly — I know many of you — by the Maui wildfires, particularly in Lahaina. And there were many friends, and are many friends, in the Lahaina area who are supporters of the Grassroot Institute. Our hearts go out to you. 

And while that tragedy is very deep and will be with us for a long time, there are issues that need to be addressed that actually were in play long before the Lahaina and Maui wildfires. 

One of them is a shortage of housing here on the island of Maui. And it’s really not because there is a shortage of land. It’s really not because there’s not the capacity to house people. 

It has to do with problems that were here before Lahaina. And any efforts to rebuild Lahaina from the recent tragedy have to deal with long-term issues. Perhaps the greatest long-term issue — and we’re going to talk about that a little bit more today — is the role of government regulation.

Many people ascribe the shortage of housing to a lack of land or to certain consumer groups purchasing and owning housing, but that’s not the real problem. The real problem is the level of government regulation. And Grassroot Institute has been communicating that message to our public leaders and has been making headway.

Recently, the governor proclaimed an emergency proclamation to deal with housing. One of the things that was remarkable is that in this proclamation, his basic whereas clause — in other words, why he needs a proclamation for housing — was the cause of the shortage. And his people who put that together could have virtually paraphrased the position of Grassroot Institute.

Even our governor now is telling us it’s excessive government regulation, it’s land use control, and so forth. 

That’s a huge victory for those people who promote common sense because it’s important to know what the cause is so that it can be dealt with. 

There are other issues related to Lahaina that I’d love to share with you. And many of you have poured your hearts out and told us tragic stories.

One issue in particular that has to be dealt with for the sake of the people of Maui and the entire state is property rights. 

Well-meaning individuals have great visions as to what should happen now in the rebuilding of Lahaina. But we mustn’t forget that there are homeowners and business owners who have ownership of property which they have lost. And that must be honored as a constitutional priority. 

While we support all the efforts that are being made to manage the emergency, and to help those individuals who desperately need housing because they’ve been displaced, those efforts must be balanced with the property rights of owners. 

Now today that’s not our subject matter, but I just wanted to let you know that we’re active in trying to promote individual liberty, economic freedom and limited accountable government. Not only across the state, but here on Maui and in Lahaina. 

And one of the reasons to do that is because our state has been experiencing an exodus of population. 

Just as people who grew up in or who owned property or rented in Lahaina and other parts of Maui are leaving the island — not only for other islands, but for the mainland and elsewhere — our state has experienced a large number of people who simply decided Hawaii is just too expensive. The cost of living is too high. The cost of housing is unaffordable.

Makaio Martin said this in a project we have in which we’re collecting the stories of those who’ve left Hawaii: “Instead of trying to restart here, which is one of the highest-cost places to live, we are moving to Washington to start a new life.”

How many of you know stories like that amongst your children, amongst your friends? Absolutely. In fact, I heard a couple of you share before the presentation today that that’s in your plans as well, the need to leave Hawaii. 

Now, there’s nothing wrong with leaving Hawaii for greener pastures and opportunity — except when you don’t want to. People should have that choice. Hawaii should be a place that is affordable for those who choose to stay. 

Now, Hawaii’s housing shortage means basically 3,600 units a year are needed between 2020 and 2030. That’s a huge number, but that’s something that is absolutely essential just to meet our minimum housing needs.

Now, don’t worry about figuring out the metrics here on this chart. But this just shows two of the ways we can measure changes in single-family home prices. We can use what realtors use, the median sales price, or we can use what UHERO, the University of Hawai‘i Economic Research Organization, uses in terms of repeat sales index.

The important thing to realize is that as you look to the far left on the screen and use 100 as the basic beginning of the index in 1995, it has soared to up to 450 for one index and 350 for the other by the present. 

These aren’t dollar figures, but just take a look at the direction of the chart. The prices are going up, and they’re likely to keep going up here in Hawaii. That’s unaffordable. 

And that’s why we need to look at what the causes are. The Wharton Index goes state by state and it identifies barriers to housing production that are caused by the government, and in particular, housing regulation.

And I know that we’re often last in Hawaii. But here’s something we can take great pride in and cheer: We’re first in the most regulated state in the United States. 

I am kidding, of course. 

Isn’t that something? We take first. And one of our counties, Hawaii County, happens to be the most regulated county in the nation.

Now, Maui does quite well in terms of being highly regulated as well. You know what that’s about. You know what it’s like to go and try to get a building permit. You know what it’s like to try to build from dirt and how long that takes. 

We’ve got a report that we put out — and you could have a copy and take it home today — called “How to facilitate more homebuilding in Hawaii.” We’ve put this into the hands of our legislators and our council people. This pretty much outlines a solution to the problems that is right at hand. 

One of the things politicians like to do is come up with grandiose projects. For example, build, in the style of Singapore, massive tenement structures, large apartment unit buildings that can be leased out for a lifetime to individuals. 

Or various other affordable housing projects that end up costing far more to build than anything that makes it worth it to a developer. 

These ideas are popular because they can rally various constituencies, ranging from construction groups to unions to others who back the political promoter of these projects. And they’re not all bad, necessarily. 

But there’s one thing that we want to make absolutely clear, and it’s based on common sense, and most of you already realize this: There are things we can do right now that require no taxpayer dollars. There are things we can do right now that simply require us to be a little more efficient and to pull back on some of the regulation.

And if we do enough of these things — as our report shows, and I encourage you to go online and read it, or pick it up today — we can actually solve the housing crisis. We can actually have the housing we need. 

Because these things, seemingly small, whether they have to deal with the number of parking spaces required to build an apartment, or whether they have to do with how much square footage is needed on your lot in order to build an ADU, or whether it has to do with how many home units you can build on a large parcel, and on and on, when we add them all up, they virtually solve our housing shortage problem by allowing the supply of housing to grow. 

Now isn’t that worth looking at? And it’s for that reason that we’ve brought a member of the Grassroot Institute team to share with you today. 

One of the things I’m very proud of about the Grassroot Institute is that it attracts some of the brightest minds across the country to work here in Hawaii, solving Hawaii’s problems. And one of those young individuals, who is now getting national recognition, is our resident expert on Hawaii housing regulation. 

He’s a graduate of Freed-Hardeman University, summa cum laude. A smart guy, he’s worked with us at the Grassroot Institute for five years, and has published nationally circulated publications.

You’ve read his writing, you see it in our weekly newsletters. And he is the key author of our study, “How to facilitate more homebuilding in Hawaii.”

I think you’re going to enjoy him. I think that you need to follow his career trajectory in the next several years. He has important things to say to Hawaii and to the nation about housing.

Would you please welcome Grassroot Institute of Hawaii staff member, Jonathan Helton. Jonathan. [applause] Thank you for being with us today.

Jonathan Helton: Thank you guys for coming here today. 

Now, before we begin, I have to introduce myself and there’s something that’s very important you need to know about me. 

The first thing, I was a debater in high school — which wasn’t really that long ago — but now I coach debate. So I try to tell my students what makes a good presentation.

Unfortunately, if you are familiar with debate at all, you know that people tend to talk very quickly. That’s something we were trained to do because we didn’t have a lot of time. 

Now, I don’t have a lot of time today, but I’m gonna try to talk so where you can understand me. If I’m talking too quickly, someone, raise your hand, yell at me, whatever, I’ll slow down.

And the second thing is, debaters have this problem where they use big words that either they don’t understand or they don’t define. And so, that’s the first thing I try to teach my kids is, if you’re gonna make an argument, the first thing you have to do is define what you mean. 

And so, I’m gonna use a lot of words related to zoning, which is obviously the most interesting topic in the world. And I’m gonna try to define them; if I skip a definition, let me know. 

So with that, let’s get into the report. 

Now, I have to tell you what the report isn’t about first. And it’s important because when we’re talking about housing, there’s a lot of things that go into making it easier to build more housing. I’m not going to talk about these four things:

>> Infrastructure, I know it’s important. I know there are housing developments here in Central Maui that are really running into the lack of wastewater capacity. That’s something that needs change. I’m not here today to talk about how we’re going to do that.

>> I’m not here to talk about property tax. I wrote a report about property tax and how to provide property tax relief early in 2023. We can get that report to you but that’s not the topic of today’s presentation. 

>> Permitting, I will talk about a little bit. And it’s important but that’s not the focus either. 

>> And the focus is also not on licensing and the trades. I [was] talking to some of you earlier who are very involved in the trades. Super important in getting more housing built, but that’s not the topic of the report.

So, you’re probably wondering, “Well, what is the topic of the report?” You know, “What’s left to talk about?” Which is fair. All of these need to be addressed in order to get more housing. We’re doing research into a lot of them, and we’ve done research into some already. So with that, the scintillating topic of zoning. Yay. 

So, let’s talk about zoning real quickly. But first, we have to talk about how we want housing to be built. 

So do we want housing to be mandated? One way that a lot of counties in Hawaii have chosen to have affordable housing created is to mandate its construction. They do this by saying, if you’re going to build 10 houses, five of them have to be affordable at a certain level of area median income.

Or, the other way that some places across the United States have experimented with is incentives. They say, “We’d like you to build affordable housing. So if you do, we’re going to allow you to build more housing overall, instead of just requiring you to build a certain percentage of the housing as affordable.” This is very important. 

So, let’s look at what Maui’s experience is with these affordable housing mandates. They’re known as “inclusionary zoning,” for those of you who follow the academic side of this. 

Inclusionary zoning doesn’t really work. If you tell a home builder, “I need half of your home, half of your units to be affordable,” one of the consequences can be is that they’re not going to build as many units because they can’t make the profit that they need to in order to make the project pencil out.

That’s what Maui experimented with between ‘06 and 2014. They said, “Half of your housing units have to be built as affordable if you are building a certain kind of project.” It didn’t work. 

They changed that requirement and that’s good. But I want to focus today, instead of looking at forcing homebuilders to build a certain amount of housing as affordable, and instead ask the question: “How can we make it more, how can we make it cheaper for homebuilders to build housing at all so that we have more housing supply?”

So with that, let’s talk about minimum lot sizes. Minimum lot sizes, as a lot of you know, is a requirement that if you’re going to build a home, it needs to have a certain amount of land under the home. This is a chart looking at a couple of different types of dwellings and in each county. 

Minimum lot sizes do one thing in particular — and I’m going to jump slides — they do something in relation to setbacks, which says you have to build your home a certain number of feet away from the sides of your lot. Right? So if you guys are tracking with me, the major thing that setbacks and minimum lot sizes do is they say you have to have X amount of yard space under each housing unit.

Now, when I get older and have enough money to buy a house, I wanted to have a yard because I want to have a garden and I want to have chickens. All right? I grew up with that, I think that’s great. But let me tell you that might not be the first house I buy. The first house I buy might be a condo unit. It might be a small house that does not have a large yard, because that’s what I can afford.

When the county tells homebuilders, you have to have X amount of land under a home, it’s mandating a certain amount of yard space. That increases the cost. 

One of the most expensive things in any development is the land cost. And if you increase the land cost, you increase the cost of building. 

So, one suggestion we’d like to make — and I’ll talk about some of our suggestions later — is allow houses to be built on smaller yards.

Now, I know there’s some cases in which that wouldn’t work. 

If you’ve got sewer, that might be a challenge building on — excuse me, if you’ve got septic — that might be a challenge building on too small of a lot. I understand that. But allowing smaller houses can help with affordability and can help get more houses built.

Let’s talk about upzoning, which is a word that I didn’t invent, but we’re going to use it. Upzoning refers to something very simple, and that’s allowing more housing units on the same piece of land. 

A very common example of this is what a lot of cities on the mainland are doing, and they’re saying anywhere you have a single home, you are now allowed to build a duplex there. You’re allowed to build two homes — or even four homes — in some places in the United States. 

So what this map is — this map is very important, I got these off of one of the county’s websites — and it shows zoning parcels on, I think, each island in the state except Kauai. And these little blue splotches — which are really kind of hard to see, there’s only one here in Hana — what they represent is parcels that are zoned for either apartments or duplexes in Maui. 

So there, we’ve got part of the island here, and here’s Central Maui. As you can see, there’s not really a lot of parcels zoned for duplexes or apartments. We’ve got Lahaina and north of Lahaina, again, not much housing zoned for apartments or duplexes. 

Obviously, that’s a problem. If you want more housing to be built, but land isn’t zoned to allow for more housing to be built, well, guess what you’re not gonna get — more housing. 

So, the idea behind upzoning is, “Let’s allow anywhere you have a single-family home, you can now have a duplex.” Something simple like that.

And the next thing is floor area ratio. Doesn’t that sound boring? I can tell, like, I am talking like a water hose, and a water hose of zoning information. It’s the most inspiring thing. 

>> Floor area ratio, I’m gonna explain this to you. Hopefully, I don’t get too confusing because this involves more math than I do on an everyday basis.

Floor area ratio refers to how much housing you can build on a piece of land. So, let me give you an example. If you have a 5,000-square-foot parcel in the County of Maui, and the floor area ratio is 1, that means you can build a 5,000-square-foot house on that piece of property. If the floor area ratio is 0.5, you can build a 2,500 square-foot-house on that piece of land. 

But in the way the County of Maui does it, this actually really limits how much housing you can build, especially in the apartment zones. 

So just to explain this, in apartment one zoning, A-1 — which the second one should be A-2, I apologize about that typo — in A-1, your floor area ratio is going to be either 0.4 or 0.5 depending on the size of the property. And there’s some things that interact with this though. 

So let me give you an example to show how floor area ratios limit the amount of housing. 

So if you’re building on an Apartment 1 piece of land — you have, lets say, a 20,000 square foot piece of land — you want to put apartments on it. That zone has a height of 35 feet. So that’s the first thing you need to keep in your head, 35 feet. 

The building, the lot coverage, you can’t build the building on more than 25% of the lot. So, right now — so what’s that? 25% of 20,000, that’s 5,000 square feet.

So right now, you’re looking at building a three-story building, roughly, on 5,000 square feet of that land. That’s going to be 15,000 square feet of housing, you know, give or take the elevators or the stairs or whatever else you’d have in that apartment unit. K? 15,000 square feet. 

But then when you add in the floor area ratio, you get a problem because for Apartment 1 zoning, it’s going to be 0.5. What’s 0.5 times 20,000? 10,000. 

So, the way the County of Maui has this written, you can only build 10,000 square feet of housing on a 20,000 square foot A-1 lot. If that was confusing, I’ll make it simple:

Having this floor area ratio requirement in place has eliminated one-third of the housing you were allowed to build on that lot.

If you apply that across every lot on the county, that adds up. You’ve gotten rid of 5,000 square feet of housing units. So, that’s not great. There you go. 

With floor area ratio in place, you could build about 10 1,000-square-foot apartments. Without it you build 15; that matters. 

These boring little rules that are confusing to most people — believe me, I had to read for a very long time to understand what these were — they matter. And there’s places across the United States that have recognized this. 

Spokane, Washington, for example, they simply abolished these requirements. They said, “We’re going to regulate housing based on how much of the lot it covers and how tall it can be. We’re not going to have these limits in place to sort of artificially mess with the already confusing zoning.”

So, if I haven’t lost you, we’ve got a couple more slides. 

>> Parking reform. Yay. So who here has a hard time finding parking in Maui? So, some people do. So let me put it this way, if you do not have a hard time finding parking, that would indicate to me that there are more parking spaces than are strictly necessary.

And if there are more parking spaces than are strictly necessary, it’s probably not the business who put them there. It’s probably county requirements. 

For anything you want to build in the county — and the requirements are not the same per county in the state, but at least for Maui — here’s the requirements: 1,500-square-foot house, two parking spaces. And you have an office, an eatery, a warehouse, that’s how many parking spaces you have to provide. And across the stat, there are very similar requirements. 

Now these are designed so that people will be able to have parking easily and it will be accessible. But, in my mind, parking spaces are more of a business decision. If you’re a business, and you don’t hire enough staff and your business fails, the government is probably not going to come in and say, “No, no, no, you have to have X number of staff.” That’s not going to happen. 

If you’re a business and you don’t have enough parking so you don’t get a lot of traffic coming in and keeping you afloat, well, that’s not going to happen because the government has said, “You have to have this much parking.”

Parking should be a business decision. If you live in an area that is near houses and you want to build a business there, maybe you think, “Hey, I’m going to get a lot of foot traffic, I don’t need 30 parking stalls.” Because that adds cost, right? That’s land costs or you’re going to have to build up. Either of those things is very expensive. 

So, one of our suggestions would be, change the parking requirements. Honestly, you could probably delete them. That wouldn’t be deleting parking. That wouldn’t be deleting cars. Not at all. It would just allow the business to determine how much parking it wants to add.

>> By-right development. This is a term you’ve probably heard us use before. This refers to how a project is approved. 

I know you have to go through a lot of layers of approval to get the okay on a project on Maui or anywhere across the state of Hawaii. You have to go through county approvals, sometimes you have to go through a neighborhood board approval, Land Use Commission approval, etc. There’s a lot of layers. 

By-right development wants to eliminate the layers. It says, “Alright, let’s look at this piece of land. Then let’s set the standards for what we want to be built on that land. If your project meets those standards, you can automatically build it. You don’t have to go to a political body and have them vote up or down on that project.” 

Let me give you a really good example. So, in Maui, if you want to build a duplex, you can do that in a duplex zone. If you want to build a duplex in a zone that is residential, for single-family residential, in most cases, you have to get special permission from the Planning Commission.

And they might give it to you, but either way, that’s something you’re gonna have to go and you’re gonna have to apply. Some people might come out and they might oppose that. And that adds time, that adds uncertainty. 

And unfortunately, delay and uncertainty kill a lot of housing projects — especially if you’re a nonprofit builder, or especially if you’re a small builder who doesn’t have infinite amounts of money.

So by-right development does not seek to allow anyone to build whatever they want, wherever they want. It says, “Here’s the rules. These rules are for everyone, and so you will know it upfront. If your project meets the rules, you can build. We’re not gonna put you through a process where people are gonna protest, and people are gonna vote up or down on that project.” 

We’re almost done, don’t worry. 

>> Self-certification. OK, this is the fun one for anyone who’s had a problem with a building permit. Which, if you’ve built anything, you probably have. 

Honolulu passed self-certification into law last year. That basically says, if you’re an architect or an engineer, and you have a valid license, you meet a couple of other requirements, you can stamp your own building permit for — yeah, there we go — for affordable housing, commercial tenant improvements, and [Department of Hawaiian Homelands] projects. 

That’s kind of a short list. We were hoping they would make that list longer, and it would apply to different projects. Didn’t happen, but we’ll see how it goes. They just passed that into law so it’s not up and running yet. But we’re gonna be following it very carefully because this is major.

The delay in Honolulu is like 300 days to get a building permit, and that’s not good. 

It doesn’t matter whether or not you’re someone who thinks we should have a lot more housing, or just a little bit more housing, the building permit phase is something everyone should be able to agree on. That should be quick. So we’re very interested to see how this is going to go. 

But, I’ve got a surprise: Maui already has self-certification. So, hypothetically, right? Hypothetically, if you are a licensed architect or engineer, you should be able to self-certify — that is, self-approve the plans — for someone for a couple of different types of projects. 

So we’ve got single-family dwellings, accessory structures, and commercial interior and tenant improvements. 

OK, so again, that’s a short list, but — and OK, I have to tell you the backstory: This is not on the county website, I could not find it. This is in the county, I think it’s Public Works administrative rules. And I had to contact Public Works for them to send me a copy of this, which they did. And so I can send it to you if you want, I’ll give you my business card afterwards. 

But if you are an architect or you regularly work with architects and need to pull building permits, you should probably ask them about this because people do use it. Not a lot of people use it, but this could be very major in getting your building permit approved quickly. And that’s really important. 

So, that’s fun. 

>> And finally — almost done with some of the really technical stuff — I want to talk about temporary housing. The Grassroot Institute of Hawaii sent a policy memo to the governor, the mayor of Maui and the state Legislature, the [Maui] County Council. 

What we did in this memo is we responded to the plan that they proposed a couple of weeks ago. They want to get people out of hotels who’ve been displaced by the fires. They want to house them in short-term rentals and other hotels. And they want to build over a thousand temporary and permanent housing units. 

So we were writing in to make suggestions on how they could better build those over a thousand housing units by July 1, which is crazy for anyone who’s worked in building. 

I don’t know if they’re going to be able to build a thousand housing units by July 1st. I really hope they can because, you know, otherwise people are going to leave the island is the unfortunate reality. But we wanted to suggest ways they can make that easier to build those units. 

So, there’s a bill that’s going to be heard Friday, Bill 21, that reforms the county’s emergency permitting law. This is a good bill. It should make it quicker, it should make it easier to get a building permit if you’re rebuilding or if you’re building something new. 

We’re gonna submit testimony on that, which it will be on the county website once we do that. 

The other thing we suggested is — we wanted to, we suggested that the governor might look at temporarily waiving licensing laws to allow out-of-state contractors to come in and assist with the build of a thousand housing units because — I’ve talked to Ray a little bit about this — the state has a major shortage of skilled tradesmen. 

And if this goal of building a thousand houses is going to be realized, it’s probably not possible to do that with the county’s current labor force. And that’s the unfortunate reality. 

>> And then finally, we did suggest that the county look at relaxing zoning laws for the projects that the government is paying for, and for anyone who wants to help out. Maybe a private or a nonprofit builder who says, “I want to build emergency shelters.” The zoning laws should be waived to allow as many emergency shelters as can be created to be built. 

>> And then finally, two ideas, two bills that we’re working on at the state Legislature. So the first bill we’re working on at the state Legislature deals with starter homes. So this bill would change four things. It would allow up to four units on every urban parcel. So that’s upzoning we’re talking about. Wherever you could build one unit, you can now legally build four. 

The second thing is it’s going to recalculate impact fees, so that the impact fees will be charged based on the square footage instead of the number of units, which would ideally, or hypothetically make it better and more easier to build multifamily homes. 

We’re going to allow lot splitting by right, and take a pause to define lot splitting. It essentially says, if you are a homeowner and you have a lot that is big enough to build several homes on it, you can now legally and automatically subdivide that land. So now you own two parcels of land. 

The benefit there is that you could then sell that second parcel of land where you’ve built a new home, you can sell that to someone else. And that allows you to generate wealth. 

And then, final thing this bill does, mandatory minimum lot size of 1,200 square foot for residential zones. I’m talking about — going back to minimum lot size is the first thing I talked about — Houston, Texas, experimented with allowing smaller lots. And what did they get? They got smaller homes. And Houston is relatively affordable compared to a lot of other U.S. metro areas, partially because they make it easy to build homes. 

Our second idea — and the second big thing we’re working on in the state Legislature — is “Yes in God’s backyard.” I wrote about this in The Maui News a couple months ago. There’s a project, King’s Cathedral, that is looking to build some temporary shelter units. And they’re building that on ag land. 

Now, they’re able to build that because they’re working under the mayor’s emergency proclamation. If they weren’t working under their emergency proclamation, it would be impossible to build 85 temporary shelters on the amount of ag land they have there. I think the parcel is maybe 15 acres; it wouldn’t be possible. 

So, the idea of “Yes in God’s backyard” is to say, “If you are a religious institution, a hospital or a school, you should be allowed to build housing units on your land kind of automatically.”

And now we’re not talking about a skyscraper or anything, we’re talking about a reasonable amount of density. But you should be able to build that without having all of those approvals that you might otherwise need.

So, I do have a quote here from one of the staff people at the Kona Community Hospital: “This is common across the state. You have problems recruiting teachers or traveling nurses because there’s not housing available.” 

So if some of these community-focused nonprofits — again, religious institutions, hospitals and schools — if they are allowed to build housing on their land, that helps solve some of the recruiting problems, and it allows, that would also free up the housing that those people would otherwise be staying in, so that the net result is more housing supply. 

So those are our two major bills, is the starter homes and then “Yes in God’s backyard.” 

And finally, we’re interested in your ideas. I’m a researcher, I probably sound like it. I know, I get into the details, all right? But, a lot of you out there, you guys, maybe you work in the trades, maybe you’re a homebuilder yourself, maybe you’re a Realtor. Whatever you do, I would welcome your input. I’ve got business cards in the back, please shoot me an email. 

Maybe I said something you don’t agree with, we can talk about that. Maybe I missed something that is also holding back the supply of housing. Send me an email about that too. I would love to learn from your firsthand experience, because again, I’m the guy, I’m trying to read everything. I’m not the one with the firsthand experience. 

So, I am done now. Isn’t that good? We’re not talking about zoning anymore. Anyway, thank you all very much. 

[Applause]

Akina: Good job. Great job, Jonathan. Thank you. Why don’t you stay up here with me? Didn’t he do a good job? [applause] That’s good. 

Now, you may have some questions, and we’d love to take your questions at this time. We have a microphone to go around. And while you’re waiting for that microphone to come to you, please fill out this white card. And this will allow you to receive — free of charge — our weekly newsletter, it’s very informative. 

You’ll also receive my personal letter every week keeping you updated and informed on the events that are taking place in our state with respect to the issues that we’re researching. 

And of course, you can also become a member of the Grassroot Institute and support us. So, please fill out this card.

So, do you have any questions for Jonathan or for myself? I hear the minds tinkering away and thinking. A lot of information and if you want to review it, before you leave, take with you a copy of the report, “How to facilitate more home building in Hawaii.” Or access it online and you can share it with others.

Yes? 

Audience member 1: Just an idea, can you use a, like a city as an example, in the mainland, that has done this successfully, and use that as a kind of a wedge here with the Legislature? 

Akina: Very good question, and the answer is yes. We actually have scoured the nation for best practices and Jonathan can give you a couple of examples.

Helton: So, as I said, Houston, for the minimum lot size is a great example. For upzoning we like to talk about Auckland, New Zealand, because they allowed — back in 2016 — a lot more houses on every residential lot. And they did see housing construction increase pretty substantially because of that.

And then a lot of the other ones, there are also models. I just don’t have them off the top of my head.

Akina: We also have bad examples across the nation that have showed that some of our practices, like inclusionary housing and the burdens we place upon developers, actually drive down the production of affordable housing.

I think Mr. Lussier had his hand up over here.

Andrew Taylor: One other question on zoning is what about going to multiple levels such as two and three stories on existing lots simply to get more density without having to use up agricultural land and other areas that, you know, stay green? 

Helton: Yes, that was in the intro of the report. I talked about how on Oahu as they say, “We want to keep the country, country.” And so, a lot of this is focused on building in existing urban areas. 

I didn’t address height in the report, but it would make sense to increase the height limit for any areas that are already near taller buildings. Because that doesn’t have the same sort of visual, like, dissonance that you’d have if you had a six-story building out in the middle of nowhere. But yes, I would agree with that.

Akina: And that’s an important issue you raised, sir. We need to be sensitive to the fact that Hawaii is a beautiful place. We don’t want to pave over paradise, so to speak. 

We’ve worked with David Callies, retired professor at the University of Hawaii School of Law who wrote the book, “Regulating Paradise.” He is a national expert on regulation. And he points out that here in the state of Hawaii we develop on only 5% of the land. 95% of the land mass is not developed. It’s more than possible to build out a little bit without taking away the beauty that makes paradise. 

But there are areas that have been designated for more dense urban development. And so, people here in Hawaii can live in green, verdant paradise or they can live in Hong Kong-style development if they like. 

We have one more here. 

Greg Lussier: So, I’ve been in the mortgage business for 38 years here in Maui. But I’m also licensed in eight different states, and I see a huge difference in the whole process. 

Trying to get financing done in Hawaii is pretty much impossible. One of the first things that they do is they limit the number of lenders that are allowed to do business in the state of Hawaii. They require them to have a full-time individual that lives here. They require a brick-and-mortar office.

And when COVID came along, they started to allow some exceptions for them to live in their home and let them use a separate door and put an office sign on that separate door. And that would be the exception. 

But in other states, it’s absolutely ridiculous. You can go to Texas, for example, and get a license in one day. 

And over here, you know, you want to get a trade — you come here from the mainland, you want to be an electrician, or something like that — you’ve got to get, go through all kinds of courses, and pass exams and all these different things. It is just so very limiting. 

And then all of a sudden we have, on Aug. 8, we have this tragic fire. And all of a sudden, the governor and the mayor come out with emergency proclamations. And now we can waive the permitting requirements, and waive all of these other things. And so I see that as a great opportunity to be able to try to permanently change the requirements in the future. 

But what I’ve heard them saying are things like, “You’re not going to need a permit if you’re going to rebuild in Lahaina.” Other things like this. 

But then all of these other federal organizations come in and they want to make sure that there’s no toxic ash and that there’s, you know, there’s health concerns and other things that need to be addressed. Even where they’re going to put the toxic ash, they can’t even figure out where to put it. 

And so, my question has to do with this: It’s what are we hearing from the governor and the mayor on these emergency proclamations? And is it going to allow us to fix some of these issues to allow us to build immediate housing in the near future? 

What, you know, can you comment on the emergency proclamations by both the mayor and the governor?

Akina: Well, thank you, Mr. Lussier, I really appreciate that. It’s a complex issue. And as you pointed out, what is said is not necessarily what gets acted upon. 

The emergency proclamations acknowledge a reality, and that is that we have a shortage of housing.

But the question of what kind of emergency is still open. 

Is this an emergency as in the case of a hurricane, a tidal wave, an earthquake and so forth? Or is it really the result of 50 years of very bad government process and planning? And if it’s the latter, then the solution is not going to be an emergency proclamation. The solution is going to be changing the very process by which government regulates and over regulates the housing industry. 

And that’s what we believe. We’re not criticizing the governor or the mayor for stepping in in an emergency and acting on the needs of the people. That’s part of their role.

But what we say is that the good ideas that they are raising in the emergency proclamations are better dealt with by the legislative branches of government, and will do more good for us in Hawaii if they become part of the permanent change of regulation, the regulatory climate. That would be the long-term solution.

Well, thank you. We’ll take one more question.

Bill Crockett: I’d like to put a historical perspective to this problem. I started practicing law here in 1956. I came back, and at that time this entire area was underdeveloped, in Kahului and Wailuku. And in addition, 10 or 20 years after that, there were a lot of housing developments throughout Maui. 

And looking at this development here in Wailuku, Kahului, this involved the transformation of families that had been living on plantations. And that was handled effectively, I believe. 

My question, I guess, is was it? And if, where did these regulations come from? Because again, my experience, when I started out, we had one, really, land-use law; that was one that dealt with subdivisions. 

And since that time — through my experiences in the proliferation of laws and regulations — where did that come from? And why did we accept it? 

And if the present condition is that we gotta get rid of it, what’s the opposition to getting rid of these things that did not warrant this? 

Again, my example here right in this Wailuku, Kahului area. It would have precluded this development that we have here right in Wailuku, Kahului and through other parts of Maui. 

Akina: Well, thank you very much. I appreciate the historical perspective. It’s almost like a [Rip van Winkle] kind of thing. We go to sleep and then wake up and see all of this regulation and all of this development that has taken place. 

It would be too complex, and I myself don’t know the detail, to dive into the answer to that question right now. But I really want to refer you to the gentleman who knows the answer.

The book, called “Regulating Paradise,” by David Callies. And you may know, professor Callies is perhaps the finest guide through this incredibly dense maze of laws that has developed with regard to regulation. To make the answer short and concise, the most significant legal action that affected our regulatory climate is the creation of the statewide Land Use Commission. And we can trace from the statewide Land Use Commission the proliferation of agency regulation. 

So, it’s not as if the people of Hawaii went to their legislators and there, in front of everyone, all of the regulations were developed. Or in the counties as well. A lot of this is agency development as well, and so, it’s somewhat of a mystery. 

But in any case, it’s time to pull back. And I’m glad for this, that regardless of the political background of various public leaders in the Legislature and in the county, individual politicians are now paying attention to the fact that we are overregulated. 

And we are working hard at the Grassroot Institute to empower them with the knowledge and the best practice solutions. So that they can chip away from that legislation and a big part of it — and I encourage you to look at our study — is “How to facilitate more homebuilding in Hawaii.” 

It’s a good approach. Jonathan, I think, did a great job today showing how we can clip here, clip there, do some ankle-biting and we can get on top of increasing the supply of our housing. Something we need to do, isn’t it? 

Thank you so much for being here with the Grassroot Institute today. Appreciate you all.

[applause]

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