2017 cesspool law creating a mess for Hawaii property owners
from Grassroot Institute of Hawaii, March 30, 2023
A Hawaii Island real estate agent is voicing concerns that the state’s mandate to eliminate cesspools is too costly for homeowners.
Lance Owens, a Realtor with LUVA Real Estate and immediate past president of the West Hawaii Association of REALTORS, joined host Joe Kent, executive vice president of the Grassroot Institute of Hawaii, on ThinkTech Hawaii’s “Hawaii Together” program to discuss the feasibility of the state’s mandate.
The 2017 law requires that all cesspools be converted to a septic tank or other wastewater treatment disposal system by the year 2050.
This year, lawmakers are considering a bill, SB426, that’s aimed at moving up that timeline by 10 or 15 years. They’ve also introduced a resolution, SCR141/SR216, that would require each county to develop a wastewater management plan and financial strategy for upgrading or converting cesspools by the 2050 deadline.
“It’s a nice idea to say that all cesspools across the state have to be replaced, but what is the cost?” Kent asked. “And what will this actually do to real people affected by this?”
“That’s the big question,” Owens said, “because there’s a lot of unintended consequences.”
According to Owens, the cost of converting cesspools can range from $30,000 or $40,000 to even $50,000 for some homeowners.
Owens said Hawaii Island has around 49,000 of the 88,000 cesspools statewide, with about 60% of all homes on the island using a cesspool for wastewater management. Oahu, by comparison, has only about 3% of its homes on cesspools.
“They’ve been doing a lot of testing of waters along the beach, and of course, it’s coming up with pollution that they state can only be coming from a cesspool or septic tank,” he said. “If it’s … making it to the ocean, you know that it’s also going into the underground water well.”
But when considering the cost or conversion, he said, “at some point you need to look at financially if it’s worth it.”
Even with access to proposed grant money, Owens said, homeowners would still have to pay $10,000 or more to update their cesspools.
“A lot of that money is going to just be for a little tiny fix,” he said. “I think that we really need to focus that grant money and things like that on upgrading the wastewater systems themselves.”
TRANSCRIPT
3-28-23 Joe Kent hosts Lance Owens on “Hawaii Together”
Joe Kent: Aloha and welcome to “Hawaii Together” on the ThinkTech Hawaii broadcasting network. I’m Joe Kent, executive vice president of the Grassroot Institute of Hawaii, filling in today for Keliʻi Akina. He’s the president and CEO of the organization.
Now, today we’re talking about cesspools. In 2017, Hawaii adopted a law requiring that all of the state’s 88,000 cesspools be converted to septic or sewer or another wastewater treatment disposal system by the year 2050.
That’s only like 26 or 27 years away. But cesspool conversion can be really expensive, ranging from around $40,000 to $50,000 for some homeowners. So today we’re gonna talk more about that with our guest.
Kent: So today joining me is Lance Owens, a Hawaii island realtor with LUVA Real Estate, and he’s the immediate past president of the West Hawaii Association of Realtors. Thanks so much for joining me, Lance.
Lance Owens: Thank you, Joe, for the invitation.
Kent: So, cesspools. Lawmakers don’t like them. And that’s a good thing because cesspools do, you know, have an environmental impact, as do many other wastewater treatment things.
But in 2017, they passed a law requiring that Hawaii cesspools all be upgraded. So what was the thinking behind that law?
Owens: I think they’ve been doing a lot of testing of waters along the beach, and of course, it’s coming up with pollution that they state can only be coming from a cesspool or septic tank or, you know, so it’s a human waste type matter.
So it’s important to protect our reefs and protect our drinking water because if it’s coming, you know, through the surface and making it to the ocean, you know that it’s also going into the underground water well, so it’s important that we do something about this soon.
Kent: I see. So it contributes to, you know, the environmental effects. And where do cesspools lie though? Where are most of the cesspools in Hawaii?
Owens: So the biggest majority of them are on the Big Island of Hawaii. You know, we’ve got, I think, it’s like 49,000 of the 88,000 that are statewide. So it’s 60% of the homes on the Big Island are on a cesspool, so basically every two out of three homes.
And if you go to, like, to Oahu, they’ve got 3% of their homes are on cesspools. So it’s quite a bit different thing, so we’ve always said it’s an outer island problem.
I think Maui and Kauai come in close second behind the Big Island. But there’s a lot less homes on those islands, so the numbers aren’t quite as high. But that’s where the biggest problems are as is with the outer islands.
Kent: So 60% are on the Big Island. Now, why is that? What was sort of the history or reasoning behind only 3% being on Oahu but 60% being on the Big Island?
Owens: I think it has to do with the exact name of our island, right: the Big Island. So we’re just so huge, and to get the infrastructure out to where people live and to do things, it’s just not feasible in a lot of cases.
So for many, many years — all the way up until 2015 — they were allowing homeowners to put in a cesspool.
And a lot of people before then were; there were some areas that they were requiring a septic tank. But it’s just — the layout is so far and the distances. And we don’t have a lot of soil on the Big Island, it’s a lot of lava rock. And lot of infrastructure’s quite a bit more expensive, I think, to put in.
Kent: I see. So can you talk about the difference then? We’re talking today about cesspools, septic systems, there might be other types of systems.
So what are all the different types of — let’s start with a cesspool and a septic system: What’s the difference?
Owens: OK. So, a cesspool is typically — you know, your most common cesspool is a big cement, like, cylinder put into the ground, and it’s got holes in all the sides of it, the perforations, so that liquids can seep out of it and go in and basically it will — it filters itself as it goes through the ground, and by the time it gets to drinking water or beaches and things like that, in a perfect world, it would be filtering it and taking care of itself.
But we know it doesn’t do it all the way, there’s still stuff that doesn’t get processed and gets put in through the ground. So you’ve got this — the biggest worry about it is it’s this cylinder sitting in the ground with all the holes in it, and it doesn’t have a solid bottom on it. The bottom is typically filled with rocks, and then around the sides of it’s filled with rocks, and it works its way out into the earth.
And if you jump over to a septic tank itself — the septic tank is a big plastic tank in the ground, and then it has lines that run off of it. It’ll have a big line typically that would go to a box that would almost be like a splitter, another container that would send it off to three or four or five or six rows of perforated material that would [do] exactly what the cesspool did, is it would start putting it into the ground and spreading it out on a little bit bigger area.
And the big point of it is in the plastic tank itself is going to — the solids are going to sit in there, and they’re going to break down a little bit better because they’re longer, and they can’t penetrate into the ground.
But it does have to be maintained, and they recommend, I think, a lot of times that you pump that thing anywhere from two to five years depending on your household and what you’re doing — how many people are in the home and things like that, so.
Kent: Oh, I see. So the …
Owens: The problem is is — oh, go ahead, Joe.
Kent: The cesspool pool is kind of like a cement cylindrical structure in the ground, whereas the septic system is kind of like a plastic tank, but they both filter into the ground somehow. Is that right?
Owens: Yeah. Yeah, 100%. Both of them filter out into the ground, and it’s — you’ll hear the argument with the cesspool: it can’t get through those rocks itself. It’s holding the solids in there until they break down enough to actually be able to penetrate into the ground system.
With a septic tank, it’s holding it in this plastic tank, and the tubes would probably sit about in the middle of the tank or up to near the top, but not at the top. And then the tubes would go out into the ground and disperse the liquids that way.
So the working theory behind that is that if you did come in and you had all the sludge on the bottom of the tank, that you would get it pumped every few years. [crosstalk].
Kent: Oh, OK. But, so, what is the advantage then of the septic tank over the cesspool? Is it that much more effective?
I mean, they’re both seeping into the ground somehow. The septic tank is a little better? A lot better?
Owens: I, most of the — you’ll hear testimony, you know, both sides saying that it’s — I’m not a scientist, so I’ll just say that right now, but I have looked at and read a lot of the testimony from the different sides, and without a doubt, there is an improvement with a septic tank, but it is a — it’s a minor improvement. It’s very small.
And like you said earlier, at $30,000 or $40,000 or even $50,000 a home to have such a minor improvement. I think at some point you need to look at financially if it’s worth it. I mean, we all want a perfect groundwater, but at what cost?
Kent: I see. And there’s other types of systems. There’s municipal wastewater treatment plant — you could plug in, you know, hook your pipe into the wastewater treatment plant and do it that way. There’s — are there private systems too?
Owens: There’s private systems, and you’ll see that a lot on the Big Island, again, because of our, you know, the way that it’s all laid out.
A lot of the hotels and resorts along the Gold Coast along, you know, Waikoloa and out in Mauna Lani and areas like that, they do have their own wastewater systems. My neighbor actually services those, so he’s on call 24 hours a day. If something happens, they’ve got to get out there right away.
But those work really, really good because what they’re doing is they’re actually treating the water, and a lot of it is put on those big lush golf courses that you see up there. They’re spraying it out through the air and then into the ground that way, and that’s after it’s been through several layers of treatment.
So when it reaches the ground and gets on the groundwater, that is — I don’t think there’s anything that gets by and makes it into the ground in those situations.
Kent: OK, so, what are the consequences of this mandate? I mean, it’s a nice idea to say that all cesspools across the state have to be replaced, but what is the cost? And what will this actually do to real people affected by this?
Owens: That’s the big question because there’s a lot of unintended consequences.
You know, I was — I’ve been selling real estate here in Kona for 19 years, almost 20 years, I think, and back in 2005, the EPA made it mandatory for gang cesspools to be closed.
Kent: You say gang?
Owens: And we have a lot of subdivisions …
Kent: What is a gang cesspool? G-A-N-G.
Owens: Like a gangster, gang. So it would, so what they would have is six, seven homes running into one big cesspool, so, and it would be like in a cul-de-sac or be somewhere else where that filtered into the ground.
So the EPA came in and ruled that those had to be closed down by the year 2005, so everybody was working on getting that done.
But what happened is, they allowed some areas to say, “Well, if you have a plan, if you can tell us you’re going to do something — if a sewer is coming in or something’s happening in the near future — then go ahead and submit a plan, and we won’t make you do anything right away.”
So, a lot of these subdivisions did submit the plans and, you know, one of the, like Kilohana, and I think it is, here in Kona, talked about having it go down Kupuna Street and then down to the wastewater system that runs along Aliʻi Drive. But after about five years, the EPA came in and said, you know, “This isn’t any — they haven’t even broke ground, this isn’t going to happen, so we want those tanks closed.”
So initially, so what was happening when appraisers were coming out and appraising homes that were being sold in that area, they were notifying the banks that these homes were not in EPA compliance, so the banks wouldn’t loan money on them.
So it kind of will bring housing to a halt, you know, and a lot of people don’t quite understand how that happens and why, but what’s happening is the banks realized that when they loan money on a property, they’re in first position. Banks will never loan in the second or third position for the primary loan.
So, in a case like with an EPA fine or something happening with that, that would turn into a lien, and that lien would supersede the bank’s lien, and the banks don’t like that, so the banks just pull their money …
Kent: Oh …
Owens: Yeah.
Kent: Right, so the banks are second in line on that loan if there was a lien on it, and so they might get nothing or crumbs on that deal, and so that’s why they’re hesitant to do that on these homes that are out of compliance with the EPA.
So if the state then is trying to mandate that all homes upgrade their cesspools, then what will happen if a home doesn’t? Will they have trouble getting a loan if they want to get sold and things like that?
Owens: I’ve spoken to bankers, and there were actually bankers on that cesspool working group, the Cesspool Conversion Working Group, and I think everybody pretty much understood that, yeah, the banks do not want to loan if it’s going to be in a non-compliance issue.
So by creating these timelines, you know, they’re trying to move up the dates to 2030 and 2035 — I did see the bill was just amended the other day to state 2035 and 2040 now. [crosstalk].
Kent: And the bill you’re talking about is SB426 at the Legislature.
Owens: Yes.
Kent: There might be some related bills, but that one would hasten the date for cesspools.
I mean, we talked earlier in the program about all cesspools have to be upgraded to a septic system or some other system by the year 2050, but now we’re talking about the year 2035 for the priority ones. Is that right?
Owens: Yeah, so Priority One would be 2035, which is about 13,000 of them in the state right now, and then Priority Two would be by the year 2040.
So, that’s going to give us, let’s say, priority ones, let’s talk about those because those are the ones closest to the ocean. Those are the ones that are probably selling more than other homes, and these homes would be subject to that.
So in 11 years, when you got closer down to five years or four years, things like that, the banks are gonna realize that these homes are out of compliance, and the ability or chances of them getting into compliance by the time, you know, that they, the loan would be, I don’t want to say mature, but before the loan would be paid off, it would be very, very critical that it wouldn’t happen, so they wouldn’t loan money on it.
And that’s speaking to local bankers. It wouldn’t start right away. It would start as it got closer, and they would look at those.
Kent: I see. So in a way, this is kicking the problem down the road for some future homeowners to deal with, and — but the problem would be complete icing out of loans from banks for homes that are out of compliance with the cesspool rules.
So if you, you know, had a home that was in the priority zone and it didn’t upgrade in 10 years, let’s say, then there could be real problems with that.
Owens: I agree, absolutely. And I think the big thing is is to keep in mind because, you know, I was watching some of the testimony on that bill, you know, it was interesting that a lot of the lawmakers and stuff didn’t quite understand how that worked and what it does.
But once it becomes enforceable by the Department of Health, you know, they have to get these homes to comply with it.
So I’m going off of past experience and how it happened with past experience and when homes weren’t in line with what was being done, the banks stopped loaning on it, and that was a real problem, and we were having to get these homes converted while we were in escrow.
But that was very, very, very little numbers. You know, right now, we’re talking 400-and-something a month need to be done, and it’s mathematically impossible to get done, so it’s …
Kent: But I see in the bill it says — well, at least it tries to address that a little bit by saying that no penalty or other assessment for any violation shall constitute a lien on the real property, and no seizure of property shall be authorized for any violation.
So just by saying that, does it make it so?
Owens: It could. So that was very interesting because that was thrown in in the evening on Tuesday during this testimony.
So that was a brand new amendment on it, which is basically going to create a bill that has no teeth and is unenforceable. So I don’t know what the purpose of this bill would be at this point without it being enforceable.
Kent: Oh, interesting. Well, let’s talk about different solutions and reforms that might help or even just different ideas.
A decentralized wastewater treatment plant — you talked before about a gang cesspool system where you have a bunch of homes hooked into one cesspool to, I assume, to save on costs.
So is there a way to save on costs without cesspools, but with some kind of a different type of system?
Owens: So, there are different systems out there. And again, you know, I’m not a scientist, so I don’t want to get too deep into those. I kind of look at these things from a fiscal view and what it’s going to do for homeowners and protecting property rights, basically.
This is — there’s areas where there are a large amount of cesspools where they can run these systems that are 20, 30, 40 homes on them, even up to upwards of even more homes on them, that could be, that could utilize a system like that.
I just got off the phone with the mayor before this show. I wanted an update from him on kind of what they were doing, and he had told me that are — they have reached out to the state and to the federal government for some grants on working on some of these different projects.
So they are actively pursuing grant money right now for that.
Kent: But even grant money or government money or federal funds or taxpayer money — that’s just a drop in the bucket.
I mean, I think I saw a tax rebate or a credit program where folks could get $10,000 towards their cesspool upgrade. So how much money is in the fund, and are people using that, and does it help?
Owens: So they’ve started a pilot program, and they had $5 million they put in the program, and that offered up to 220 people, I believe, $20,000 grant money for a cesspool conversion to either get it hooked into the sewer or get it converted to a septic tank.
So that’s kind of the scary thing because if we’re giving away government money to fund $20,000 [to] $30,000, say the homeowner has to put in $10,000 because a lot of these are going to be close to $30,000, a lot of that money is going to just be for a little tiny fix.
I think that we really need to focus that grant money and things like that on to upgrading the wastewater systems themselves. Because I think if you look at the cost of it now, I think it’s — to do these 88,000 is about a 5-billion-dollar endeavor, so I think a lot of that could be used to upgrade a lot of sewer systems in the areas. [crosstalk]
Kent: Yeah, it seems to me that $5 million is just a drop in the bucket for a $5 billion problem. And like you say, the wastewater treatment plants are badly in need of updates.
I think Hilo’s wastewater treatment plant is so badly outdated that it could fail at any moment, which could be an environmental disaster, of course. And the county says it needs $100 million to do that.
So that’s another question: Why is wastewater so badly maintained on the Big Island, and maybe some other counties too?
Owens: Yeah, I think that it kind of gets back to, again, [unintelligible 00:20:58] run things.
You know, we’ve all heard how you can fit all the islands on the Big Island, there’s still a lot of land left over. So you concentrate it, you know, a million people on the little island of Oahu, you’ve got a lot of money going in, you’ve got a lot of taxes being paid, you’ve got a lot of — you know, they bill you for the sewer system on your water bill.
I know in the few areas that have it here on the Big Island, it is — in April, it goes up to $54 a month, for to maintain these wastewater plants. But, you know, the distance from, that we’re running for one wastewater plant is probably the distance of half of Oahu just to run to the one.
And same thing — Puna’s having the same problems. It’s such huge distances, you know, a lot of those properties in Puna are on at least an acre if not three acres, and we run into that when we get down to areas like Kau and things like that.
You’ve got the largest subdivision in the United States, as what people call it, with 10,000 one-acre lots and I think another 3,000 three-acre lots below the highway. So … [crosstalk]
Kent: Yeah, and that’s an irony because — it’s an irony because it seems to me that the more concentrated and dense people live, then the easier it is to deal with the wastewater treatment issue.
Because then you just have a central, like the county could just make or build a wastewater treatment plant and plug in, plug everyone in easily. Whereas if it’s rural, this seems like a rural problem.
Owens: Yeah, it — a lot of it is. But you know what, when you look at the — actually, if you look at the Priority One maps, and you’ve got a huge amount of priority one is right here in Kailua-Kona, and then another part of it’s in Puna, and then another area of it’s in the Puako area.
Now, Puako was referred to a lot in the — during the testimony the other day. And it’s interesting because the Puako area is — it’s very, very, very flat land. And you look at, you Google Earth that road, you know, the town, and you look at several backyards have ponds that are natural ponds in them because it’s sitting right on top of the water table.
So it’s a critical area that these septic tanks and the cesspools were built in, and that should be like a priority number one is to get a some type of wastewater system like the hotels are doing themselves up there along that coast.
But here in Kailua-Kona, the majority of these red — I call them the red dots if you look at the cesspool prioritization tool, the red dot where all the Priority Ones are — and a lot of that is right here where it could be hooked into our sewer system.
So I think we need to spend a lot of time and effort, you know, just focusing on getting the Kona — the Kailua-Kona — and the Puna ones upgraded. Because we really have — it’s a big majority of the Priority Ones are within those areas that could be tied into that are not tied into them.
Kent: And if you think about the classic role of government is, you know, assumed by many popularly to be for infrastructure, you know, the government’s supposed to provide infrastructure, and certainly, water treatment would fall into that category.
To me, this seems like the county hasn’t adequately served that water treatment for the citizens. And so a lot of this is, you know, just an infrastructure question.
At the same time though, I’m wondering how much the county could find private solutions to solve the infrastructure issues. And the 2022 Cost of Government Commission issued a report, which stated that the county should consider partnering with the private sector to help with wastewater.
And now that seems to be difficult, though. It’s always hard in Hawaii to partner with the private sector because we’ve got laws that get in the way of that. But do you think that private options could be available to the county to solve this issue?
Owens: I do think so. I think there’s a lot of research and technology out there for that to happen, and I do think that that’s a good option because, you know, like we all know, I think it would get done a lot quicker.
And if they can spread out the money, you know, say the $54 per home that is put onto it and then bring in the grant money from the government to get this stuff going — the federal government and the state government — I think that’s one of the better options.
And it’s proven, you know, you’ve got all these resorts here on the Big Island that are already doing that. You know, they have people here trained. Of course, it’s like every place — we don’t have enough people here trained to do it.
But, you know, that brings us to another option. You know, this has got to be done by 2050. You’ve got kids graduating from high school that could retire at this. You know, it’s like, we need to reach out to our youth and keep them here in Hawaii, keep them home and not going off to the mainland for jobs.
You know, there’s a — that’s a good industry, and it pays good money, and it’s a respectable industry. And I would like to see high school promoting things like this would be good. Because 88,000 by the year 2050 — and again, this is a lot. A lot of that needs to be done.
And a lot of it’s going to have to be maintained, so if we do do the private systems, they are going to have to be maintained by somebody that has education, is knowledgeable and, you know, it would be a good career.
Kent: Well, you know, what do you say to all the folks who have — may be cash poor and land poor on the Big Island and across the state?
They don’t have $50,000 sitting around to deal with this issue, and now they’re being forced to do this. What do you say to the folks who are worried about that and to lawmakers who are considering this?
Owens: You know, that’s interesting because I looked that up the other day. It had me concerned and I looked it [up].
So last year on the Big Island, there was 1,600-plus — 1,640 homes, I think — sold that were on a cesspool. So that gives me a good, you know, a good field to look at.
The median price for these homes was $495,000. So that tells you right there, you know, these aren’t the big million-dollar oceanfront homes that this is happening to. This is … [crosstalk]
Kent: And now we have 30 seconds left, by the way. Sorry. Go ahead.
Owens: So, yeah, sorry. So it’s, you know, go to the government, and we need to have them working on getting the upgraded systems in place. The — not the cesspools, but the wastewater system. Let’s work on them, let’s get together and let’s help them.
Kent: Well, and thanks so much for the intro class to this issue. It’s anissue that’s, you know, it can be, seem, you know, remote, but actually, it’s coming, and it’s something that we all need to pay attention to.
Thanks so much for joining us, Lance.
Owens: Thank you guys for having me. Appreciate it. Have a great day.
Kent: And thank you for watching ThinkTech Hawaii and “Hawaii Together.” Until next time, aloha.