Hawaii’s housing crisis is self-inflicted

The following editorial was originally published in the Honolulu Star-Advertiser on Sunday, May 7, 2023 as part of the "Raise Your Hand" column in the Insights section.

Andrew Luff

By: Andrew Luff, Radford High School, class of 2025.

Thousands of Hawaii residents have been forced to leave the state in recent years. According to the U.S. Census Bureau, more than 15,000 people left Hawaii in 2022. This is largely due to unaffordability, more specifically, housing unaffordability. The median price of a single-family home on Oahu is now around $1.15 million, and a condo will set you back $515,500. On average, Hawaii residents spend 42.06% of their income on rent, which is more than in any other state.

Hawaii policymakers have tried to solve the problem in many ways, to little avail. Many high-profile bills and laws have gone after short-term rentals, unoccupied units, and nonresidents. Many of these laws are legally dubious and have attracted the ire of various groups.

These kinds of laws are largely ineffective because they fail to address the source of the problem, which is that Hawaii needs to build more homes. According to official estimates from the state Department of Business, Economic Development and Tourism, Hawaii will need 25,737 to 46,573 new units statewide from 2020 to 2030, and Oahu will need 10,402 to 21,392 new units from 2020 to 2030.

This is concerning because, between 2020 and 2021, Hawaii added only around 2,896 new units (with around 1,143 of those on Oahu) — barely enough to meet demand. Currently, new housing developments are being built at one-tenth the rate of the 1960s and ’70s.

The reason that not enough housing is built in Hawaii is that regulations are onerous, numerous and convoluted. More often than not, it takes several years to get all of the necessary approvals.

— Andrew Luff

First, there is the state Land Use Commission, which classifies the state’s land into four broad categories: agriculture, conservation, rural and urban. Housing can generally only be built in the urban district, with certain exceptions (Oprah Winfrey’s Maui mansion is located in an agricultural district). Only about 5% of the land in the state is classified as urban, so housing can only be built on around 5% of the land in the state. However, this doesn’t take into account other layers of regulations.

Another layer of regulations is county-level zoning, which is more explicit and detailed than the state land use districts. Each zone has restrictions for what can be built there. On Oahu, large swaths of the urban zone are zoned exclusively for single- family homes. This prevents duplexes, fourplexes, apartments and other types of affordable housing from being built. The utility of zoning has been much overstated. According to M. Nolan Gray, author of Arbitrary Lines: How Zoning Broke The American City And How To Fix It, “Nobody wants to build a warehouse or a shopping mall on your cul-de-sac, just as much as you don’t want a warehouse or shopping mall built on your cul-desac.” Zoning serves primarily to drive up housing costs by restricting the supply of housing and by delaying the development process.

There are more layers of regulations including island plans, height limits and neighborhood boards, but it would be impossible to cover all these layers of regulations in one article.

Exacerbating the housing crisis is permitting backlogs. On average, Hawaii residents wait three times longer for building permits than in other states. Currently, residential and commercial permits can take up to 24 months on Oahu. Clearing this backlog would be a tremendous step in making housing more affordable.

Changes in Hawaii’s regulatory process could also make housing more affordable. The various layers of regulations should be consolidated, as many are redundant. Strict zoning laws should be loosened to allow for higher-density housing.

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