Testimony: HB1837 HD1 a good vehicle for identifying Hawaii housing barriers

by Grassroot Institute of Hawaii, March 16, 2022

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration March 16, 2022, by the Senate Committees on Housing and Government Operations.

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To: Senate Committee on Housing

      Sen. Stanley Chang, Chair

      Sen. Dru Mamo Kanuha, Vice Chair

      Senate Committee on Government Operations

      Sen. Sharon Y. Moriwaki, Chair

      Sen. Donovan M. Dela Cruz, Vice Chair

From: Grassroot Institute of Hawaii

           Ted Kefalas, Director of Strategic Campaigns

RE: HB1837 HD1  — RELATING TO HOUSING

Comments Only

Dear Chair and Committee Members:

The Grassroot Institute of Hawaii would like to offer its comments on HB1837 HD1, which, if enacted, would be an important first step toward identifying the regulatory barriers that restrain homebuilding in Hawaii and has led to the state’s notoriously high cost of housing for both owners and renters.

HB1837 HD1 would achieve this goal by requiring the counties to submit biennial reports to the Legislature concerning their efforts to reduce zoning and other regulatory barriers to housing development. 

In addition, it would require the Hawaii Housing and Finance Development Corp. and Hawaii Public Housing Authority to submit complementary reports about the actions and efforts of the counties to streamline the development of affordable housing. 

Ideally, this bill would move Hawaii toward “light-touch density,” which allows projects that meet all zoning requirements to proceed without going through a discretionary approval process. The idea is to incentivize small, fast, economical, adaptable and simple additions to housing supply while still accounting for health and safety. 

This approach is also known as the “Tokyo Model,” because it emulates the “by-right” zoning approach that has allowed Tokyo to produce adequate affordable housing while keeping housing prices stable over two decades. 

During that same period, home prices in Hawaii, California and other locales with heavy regulation have seen their housing prices skyrocket.

According to housing expert Edward Pinto, if Hawaii were to adopt the Tokyo model, Oahu alone could add 26,000 homes over the next decade.

The Grassroot Institute has issued several publications that analyze how zoning and other regulations throttle the growth of housing. 

One was our policy report “Reform the Hawaii LUC to encourage more housing,” which advocates giving the counties more authority to make decisions, thus reducing the amount of bureaucracy and preventing the state Land Use Commission from becoming a de facto state zoning commission. 

Another was “Build up or build out? How to make housing more affordable,” which recommends “increasing the area of urbanized land and building marketable densities outside of the existing urban footprint,” which currently is about only 5% of all land in the state. For example, an increase of only 1 or 2 percentage points in Hawaii’s urban-designated land would be equivalent to a 20% to 40% increase, respectively, in lands available for more housing.

In addition, the institute has made available a zoning-reform toolkit, “How to Build Affordable, Thriving Neighborhoods,” which explores different ways to increase housing supply and improve affordability by reforming state and local zoning restrictions. 

We summarized many proposals from the toolkit in a commentary published in The Maui News, ”50 ways — at least — to update Maui’s zoning code.”

We do have one concern about this bill: It offers no incentive or penalty to ensure that the counties comply with the bill’s proposed reporting requirement. 

Likewise, there is no incentive for the counties to reduce regulations. As experience demonstrates, municipalities can be reluctant to reduce zoning, or may do so in a haphazard way that will not achieve the objective of spurring housing growth. 

In the end, it may be necessary for the Legislature to step in and put limits on the types of zoning and land-use regulations permitted to the counties.

Nonetheless, this bill is an important first step towards addressing the state housing crisis and we commend the Legislature for recognizing that one of the primary causes of the state’s housing crisis is regulation that stifles development. 

We hope that it will lead to the adoption of a model that removes the many unnecessary barriers to the development of more homes. 

Thank you for the opportunity to submit our comments.

Sincerely,

Ted Kefalas

Director of Strategic Campaigns

Grassroot Institute of Hawaii