How to increase housing and ease homelessness in Hawaii
by Joe Kent, Grassroot Institute, June 1, 2022
As an expression of hope in the next generation of America’s leaders, Joe Kent gave a presentation last Friday to a group of students from Hope College in Michigan, in which he connected the dots between Hawaii’s barriers to housing and its high rate of homelessness.
Kent, executive director of the Grassroot Institute of Hawaii, made the point that many of Hawaii’s housing regulations are meant to favor the poor, but actually they serve the very wealthy. And that has made homelessness in Hawaii worse.
During his one-hour talk, Kent outlined the four major types of homelessness: transitional, episodic, chronic and “hidden.”
“But there’s another group here, besides just homeless, that are in a tenuous situation,” he said. “Those are folks that do have a home [to live in as renters] but they are unable to meet their basic needs. They may be one paycheck or two paychecks away from becoming homeless, and those are folks we call the ALICE population here, that makes up about 33%. [ALICE stands for “asset-limited, income-constrained, employed.]
Since housing comprises the largest portion of their costs, sometimes at the expense of food, clothing and other necessities, understandably many of those residents have been moving away in recent years, in search of cheaper housing and greater job opportunities.
Above, this home near Punchbowl, Oahu, is listed on Zillow for $1.3 million.
“So all of this is to say … we have a big housing problem,” Kent said, “and the question is: Why is the problem so bad?
“There are a lot of reasons,” he said, “but No. 1 is housing regulation. We have the highest housing barriers in the nation.”
Kent outlined six major layers of housing regulation: the state Land Use Commission, county plans, community plans, county zoning, special management area permitting and the historic districts.
After describing how each constrains housing, he discussed possible solutions, including reforming the LUC, “building out,” “building up” and liberalizing zoning laws in lands already designated urban.
One student in the audience noted that people who already own homes often oppose zoning reform because it might affect their property values.
“Politically, that’s the issue,” said Kent. “The people who need the housing don’t show up at the political process, and the people who don’t need the housing do show up at the political process. So you have the unspoken masses that, you know, don’t have a voice in this problem.”
“Well, how do you go to the zoning meetings when you have to work three jobs?” asked another student.
“And take care of all your kids?” said another.
“Right, said Kent. “Exactly. I know. So often I’ll go to the zoning meetings and testify on behalf of all those people that can’t make it. But, you know, I’m viewed skeptically as well. It’s like, ‘Oh, who are you?’ … “Are you really a developer?” It’s like, “No, no. I’m just a nerd, you know. So, just don’t be afraid.” [audience laughter]
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TRANSCRIPT
5-31-22 Joe Kent presentation on housing and homelessness in Hawaii to students visiting from Hope College, Michigan
Joe Kent: My name is Joe Kent. I’m the executive vice president of the Grassroot Institute of Hawaii, which is a nonprofit research organization that seeks to educate folks about the values of individual liberty, economic freedom and accountable government. And we are actually in this building thanks to Ken Schoolland, professor at Hawaii Pacific University. He’s an economics professor extraordinaire here in the islands.
So, thanks to you for coming to Hawaii just to listen to my little talk here. I’m sure you’ve done a lot more than that, but I want to talk today about the issues of homelessness and housing in Hawaii.
Hawaii is kind of a poster child for a lot of these issues, so it’s a great place to research this. And just to let everyone know, this is just one perspective. There are many perspectives on all these issues, but we want to give you our perspective, looking at things from a lens of individual liberty, economic freedom and accountable government.
So Hawaii has the highest cost of living in the United States. You can see here, we’re at the top, and your dollars in Hawaii do not go as far as on the mainland. So, right off the bat, if you are homeless, if you are struggling to make it, you’re at a disadvantage if you live in Hawaii.
There’s a study done that $100 in Hawaii only buys about $84 worth of goods. And I’m sure if you’ve been to the grocery store — if you haven’t been to the grocery stores yet, go to the grocery stores, don’t go to the beach — and you’ll get sticker shock. And that’s really the best education that you can get here. Things are very expensive.
Now, most of that cost has to do with the high cost of housing. Hawaii also has the highest housing costs in the nation. The median price for a single-family house on Oahu is $1 million. Same thing on Maui. Same thing on Kauai. The Big Island is less expensive, but still very expensive.
So this, by the way, is a house, just like right down the road from where I live. It’s a random house. It’s not a special house that I tried to find. It’s a $1 million home here on Oahu. It’s a two-bedroom, one-bathroom, 500-square-foot home.
Audience member: 500 square feet.
Kent: 500 square feet. Exactly. [laughs] Yeah. And it’s …
Audience member: An apartment.
Kent: Yeah, it’s kind of like an apartment, and it’s surrounded; all these homes are $1 million. So like I said, it’s not a special case or anything.
I made a TikTok video the other day where I went to my mother-in-law’s house and I just filmed myself and said, “Hey, this is a $1 million home in Hawaii,” and it got a million views because people were just shocked. I won’t show that video here. But that has led to homelessness, and it’s worsened the problem of homelessness.
And in Hawaii, we have four different types of homelessness. So it’s not all just one category. You’ve got the transitional homeless, which are those that have just maybe lost a job or maybe they’ve become divorced. They’re in a situation that’s transitory, and they’re transitioning to find permanent housing.
We have episodic homelessness, which are those folks that find themselves homeless maybe two, three times a year, and maybe they have substance abuse issues and things like that.
Then there’s the chronic homelessness, which makes up 23% of our homeless in Hawaii. And those are the folks who have serious mental health issues or serious debilitating disabilities or drug issues.
And then there’s a fourth category of the hidden homeless, which are those folks that are maybe staying on their family or friend’s couch. They’re kind of surfing and trying to get by. They’re not counted in the numbers, so that’s why we call them the hidden homeless.
So, in Hawaii, the vast majority are those that are in the transitional or episodic homelessness, and maybe in the hidden. But chronic homelessness is also a huge problem as well. Homelessness in Hawaii has gone down. It’s gotten better in the past few years.
Amazingly, in 2016, Hawaii had the highest homelessness rate in the nation, and since it’s gone down, we’ve seen about 1,000 … You can’t really read that. That’s about 5,000 people counted as homeless in 2016, 2017, and now we’re down to 3,900. So that’s about 1,000 people that are no longer homeless, apparently, and that’s been partly due to the work of nonprofits and governments trying to address this problem.
There’s a lot of money in Hawaii that’s been kind of thrown at this issue and it has helped, actually. Oh yeah, and by the way, here’s another chart that shows people exiting homelessness, and these are folks that are finding permanent supportive housing. Every year, they’re leaving the homelessness ranks. So, these are all good signs.
Audience member: Joe …
Kent: Yeah.
Audience member: Would you mind if you go back one more slide?
Kent: Yeah, sure.
Audience member: The red line is going up. What’s that? When you say unsheltered [is increasing].
Kent: Yes, yes, yes. So, the unsheltered actually is raising, that’s true, and then the sheltered is lowering down here, so there’s a lot going on with the numbers. And the pandemic really screwed things up with the numbers too, because there were a lot of homelessness declarations and emergency proclamations and federal aid money thrown at the issue too.
So, but shelter space is going down though, so that’s a big problem too. And that’s why you see the sheltered numbers going down. Here again, we’ve got the people leaving homelessness going up, and we’ll talk more about that too.
But there’s another group here, besides just homeless, that are in a tenuous situation, and those are folks that do have a home [to live in as renters] but they are unable to meet their basic needs. They may be one paycheck or two paychecks away from becoming homeless, and those are folks we call the ALICE population here, that makes up about 33%. [ALICE stands for “asset-limited, income-constrained, employed.]
The federal poverty line, which is that 9%, that’s maybe a family of four making $26,000. They would be considered in the official federal poverty guidelines of poverty, but in Hawaii, if you make more than $26,000 with a family of four, you’re not considered in poverty, [chuckles] even though in Hawaii, the cost of living, uh, you still are in poverty actually.
So, this group here, these are folks that make between $26,000 and $90,000 for a family of four. And they have to struggle with some basic costs.
These are the basic monthly household costs in Hawaii for a family of four. About $1,200 goes to taxes every month. Then there’s childcare at $1,300 every month. And housing costs for about $1,600. And these are the basic costs. So $1,600 on Oahu will get you a studio. [chuckles] A one-bedroom, if you’re lucky. Maybe if you live far from the city core, you could find a one-bedroom, or, if you’re lucky, a two-bedroom, but these are not big houses.
So, for a family of four squeezing into a small house like that, that’s very difficult. So you see, housing is a huge factor contributing to, you know, the problems in Hawaii of the cost of living. And that has led to a huge population decline. People are leaving the islands. You’d think, “Well, why would anyone leave Hawaii?” Right? But people are leaving in droves.
Since 2016, on net, 22,000 people — locals — have left and moved away. And it’s been a phenomenon. If you go on social media or, I mean, even on our Facebook page, and look at all our blog posts, people are commenting, “That’s it. I’m outta here.”
And so we asked 50 of them why they’re leaving and to tell us their story. And so this is Nate Hara. He said he was born in Waimea, Kauai, Hawaii. Raised in Hilo. Living in Hawaii until he was 26 years old:
“The cost of living, continuous raising of taxes and fees, and the state’s need to control everything has led my family and me moving to Texas. In order for my family and I to move back, we would need to see change that betters the hardworking local people and rewards people for their hard work.”
And that’s him and his daughter and son there.
Here’s another one, Michael Cheney. He said he was born in Kahuku, raised in Hauula. Lived in Hawaii for 26 years: “It was a hard decision to move out of Hawaii because Hawaii was all I knew. If you don’t have a steady job and you’re just starting out as a family, it will be a struggle far beyond what people can imagine.”
And like I said, there’s been at least 50 people that we personally reached out to and just said, “Tell us your story.” But it’s a phenomenon.
They did a survey and found that 47% are considering leaving because of the cost of living. And 15% said because there’s more job opportunities on the mainland, and 10% said housing is too expensive. So as you can see, the costs are kind of spiraling and they’re causing this flight from Hawaii, which is making a lot of problems worse.
We have a huge teacher shortage in Hawaii. There’s about 1,000 teachers that we’re missing. We need about 1,000 doctors and nurses here. So we have a huge shortage of that for medical care. And so a lot of the people who are leaving are those people that we need here in Hawaii.
So, all of this is to say, we have a problem. We have a big housing problem, and the question is: Why is the problem so bad?
So, there are a lot of reasons. There are a lot of factors that make Hawaii’s cost of living, and housing, so bad, but No. 1 is housing regulation. We have the highest housing barriers in the nation as well. They did a study, it’s the Wharton Index, which measures housing regulations by state, and Hawaii scored at the top. We have the highest housing regulations in the nation.
Audience member: Not just at the top, but way at the top.
Kent: Way, way at the top. Yeah, I mean, we’re a league beyond the next. And so, housing regulation in Hawaii is the main problem, you can say. And it costs 10 years just to get permission to build on average.
So, let’s say you’re a developer, you want to build a house, on average, it’ll take you 10 years to get through all the layers of zoning and regulation. And by the end of the 10 years, you still have to build the house. [laughs] So that’s just the permission. Yeah.
Audience member: That area that’s already zoned residential, like it can take 10 years?
Kent: No, no. So, I’ll get to that. So, that’s a great point. That’s a great question. So, now let me talk about the different layers of housing regulation. There are six layers that someone who wants to build housing has to get through in Hawaii. You’ve got the state Land Use Commission, and that goes to your question. Then there’s the county plan. Then the community plan. And, by the way, these plans don’t always agree with each other. [chuckles] So, you have to really read the plan closely.
And then there’s the county zoning. Then the specia management area [permit], if you’re in a special area, which most housing is, by the way. And then you’ve got the historic district, if you’re lucky. Or unlucky.
So, like I said, by the time you get through that, you might get permission to build, but then you still have to build the house, and then there’s costs on top of that.
So let’s start with the state Land Use Commission right here. And I’m not gonna go through every zone, but we’re starting right here at the state Land Use Commission, who says that there are four zones in the state.
There’s the urban district here, which is basically where housing can be built. So, all of the housing that you see is right here in that 5% of the land. Then you have the conservation district, and, of course, there’s no building there. Then you have the agricultural district, which is 47% of the land, and there you can have a house, but it has to be one house on one acre. So that’s not really like a neighborhood, that’s not really affordable housing. Those are really either farms or mansions [chuckles] in Hawaii. And most often in Hawaii, they’re mansions, actually.
And then you have the rural, which is, you know, it’s so small. It’s basically urban, but a little bit less dense.
Do we know what density is? It’s basically, you know, how many housing units you can put in an area. So, right off the bat, I mean, if you live in Honolulu, if you’re going around to Oahu, it seems like we’ve built on every last vestige of land. But actually, if you look at the whole state and look at it from a top-down aerial view, we’re only building on about 5%.
So then, let’s say that we were to increase that 5% to 6%, that would be a 20% increase in the supply of land available for housing. That could build about 100,000 homes, for example, which is double the amount that they say is needed in Hawaii. So, just by doing that, you would basically solve the whole housing problem.
But that’s very hard to do because it’s not very politically popular. But just talking about policies that would work.
Now, let’s hone in on this a little more. So, on Oahu, like I said, 26% of the land is zoned urban. On Kauai, it’s about 4%. Maui is 4% as well. And Hawaii Island, the Big Island, is about 2% zoned for urban.
So, this is what it looks like. All the little black dots that you see, that’s the urban zones. And most of the land is open space.
Here’s Kauai, and you can see these little red areas here are the urban zoning. The white area is the agricultural. This green is the conservation lands.
Ooh, you can’t really see that at all, but this is the Big Island. Does this have a laser pointer on it? No. Oh, what’s that? I don’t know. It’s OK. I’ll just use my finger. So, this is the … [chuckles] Can anyone see that? It’s really faint? It’s like … There’s a … Oh my goodness. OK. Well …
Audience member: [inaudible] like really focus.
Audience member: Basically, there’s not much [inaudible].
Kent: There’s not much. There you go. There you go. Thank you. Thank you.
Audience member: So, that’s the Big Island.
Kent: So this is Hilo right here and this is Kona, and that’s basically it. And then there’s … Oh, this is Maui, by the way. And you’ve got all these colored bits. Yellow and blue are the urban areas, but like I said, most of it is open space.
Audience member: Does the urban zoning include where hotels are allowed to build as well?
Kent: Yes, yes, that’s correct.
Audience member: Some of that housing isn’t residential.
Kent: That’s right. That’s right. Exactly. And so, just like professor Beard said, some of the urban zoning is where hotels need to be, or where airports are. And so that’s not housing as well. So, even the 5% of the land here — cut that in half basically, and that’s, you know, it’s like 2.5% is actually housing in Hawaii.
And if we zoom in to Honolulu, so here’s Honolulu, Oahu, and the red areas here are the urban zoning. I’m gonna zoom in right here. So, let’s see. Where are we? We are around here. OK. That’s where we are. You are here. OK? [audience laughter]
And now, so look at this purple area; this is like the airport and the industrial zone here. So, that’s not housing. Then you’ve got the yellow areas up here. This is when you look up into the valley and you see all those housing units up there. That’s what that is. And yellow is single-family housing. So that means you can only have one house on a plot of land.
So, let’s say a 5,000-square-foot plot, you can have one house with one kitchen and that’s it. You can’t have a duplex. You can’t have a fourplex. And you have to have a parking spot too. So that’s all of this housing, it’s very low-density. And then in the red and brown areas here, that’s where you can actually have condominiums and apartments, things like that, more dense housing. So, you can see it’s just a sliver of land here that …
Audience member: But that includes some hotels and stuff?
Kent: And that includes hotels, which would be down here.
Audience member: OK.
Kent: In this area, yeah. So, that is, really, you can see the problem is the zoning, you know, the big factor in making housing costs so high.
Now, ironically, it’s actually easier to build a mansion in Hawaii than it is to build an affordable house. Now, why is that? It’s because, again, a mansion fits neatly into the definition of agricultural zoning. One house on one acre, right? And you can see this is Oprah’s house on the island of Maui, and it’s one house on many, many, many acres, but it’s a mansion, very easy to build.
You don’t have to have to go through any public testimony. You don’t have to go through any hearings. You don’t have to go to the state Land Use Commission or the County. You just build the house, basically, very simple.
Whereas developers who want to build affordable housing — let’s say a neighborhood or a low-rise or something like that — they have to go through the public-testimony process here. And in Hawaii, it’s very contentious.
This kills a lot of housing projects. Folks come out and say, “Not in my backyard.” And so that’s killed so many projects that they call them the NIMBYs, the not-in-my-backyard folks.
So a developer — and we’ve talked to many developers who are going through this in our research — and they say, “Well, when they deny our project, we just shrug and say, ‘OK, well, we’ll just build a mansion then.'”
And so, [chuckles] in that sense, Hawaii’s housing regulations are set up to favor the rich. Not intentionally. Unintentionally. They’re meant to favor the poor, but they actually serve the very wealthy.
And if you look on Maui, for example, you cannot build a house, you can’t build a low-rise, you can’t build a high-rise. There is nowhere to live. There’s no place to buy. There’s no place to rent. It’s just all bought up, except for the fabulously wealthy. And that’s why you see so many celebrities there.
So, I wish you guys could go to Maui actually. Maybe you should convince your teacher. [audience laughter]
So, what can be done about the problem? So, the Grassroot Institute has researched this and tried to figure out what can we do. Obviously, there’s the 5%-to-6% thing. That’s good. But what are some other solutions?
Well, let’s look at some different areas. We’re gonna look at Minnesota, Oregon, California and Tokyo.
Now, in Minnesota — where I’m from originally — and this is Minneapolis — they passed a law that basically took all of the single-family zoning areas and allowed more density, so you can have a duplex in a single-family zone, or you can have a three-plex and so on.
They also got rid of the parking mandates. And not every house, not every apartment needs a parking space. Some don’t, and some only need one. You know, you don’t need three.
Maybe you need only one.
And so, that has allowed for the development of more housing in that area. Oregon or Portland learned from that and in 2020 passed a law very similar, and basically said, “Let’s allow for more development to fill in between the homes.” Now, if you like your home, you can keep your home. [chuckles] So, you don’t have to do it.
Audience member: Mmm.
Kent: But if you want to, you can, and if your neighborhood wants to, they can. But everyone has to agree. Same thing in California. This is last year, 2021, they passed SB9, and that allows duplexes and split lots in the single-family zoning areas, so …
Audience member: For the whole state or just certain …
Kent: For the whole state, yes. And that’s a crazy concept because, you know, before, I was just talking about, you know, cities, but this is the whole state.
Audience member: How did they get around [unintelligible]?
Kent: Oh, I don’t know about that one.
Audience member: OK.
Kent: Yeah. Yeah. But I know that there is a lot of litigation about this at the county levels, because the counties say, “Well, you know, this is our county. You can’t tell us what to do.” But the state is saying, “No, we can tell you what to do.” And so there’s a lot of court cases popping up about this right now.
But in any case, this is what they passed in California.
So now, we’re gonna go all the way to Tokyo, and which shows that basically if you allow housing — which Tokyo did, they allowed all types of housing — you can have a high-rise next to a little house, you can do all kinds of things there and that has eased housing prices.
Here, these are housing prices in Tokyo since 2000 that have basically remained steady. Whereas in San Francisco and New York, housing prices have gone straight up or skyrocketed. And so what we say is: Follow the Tokyo model. [chuckles] And in Hawaii, there are a lot of people here from Japan and from Asia, and so that’s kind of like what we’re trying to talk about right now.
We have a few reports that we’ve written about. We’ve got “Reform the [Hawaii LUC] to encourage more housing.” And basically, one thing that lawmakers have talked about doing is abolishing the state Land Use Commission. Just get rid of it. A lot of the things that they do at the state Land Use Commission are duplicative at the county level.
So, you get through the state Land Use Commission and then, yeah, you’ve got to do the same thing at the county level. So they are saying, “Well, why do we have to do that? Just get rid of the state [commission].
Then another report that we have is, “Build Up Or Build Out?” And that’s a big question a lot of times in Hawaii, “Should we build up or should we build out?” And our answer is, “Let’s do both.” [laughs]
But building out, according to this report, is the easiest way to do it. But maybe not the easiest politically.
Then there’s a report by the State Policy Network that’s published on our website, and it has 50 different ways to reform zoning. And I’m not gonna go through all of these, but basically, it’s just allow more zoning in the technical minutiae of county code. That’s basically what this says.
So, you could reduce parking requirements, you could reduce political approvals. If you have the right to zone, if your project comports with the zoning laws, then you should just be able to do it by right. Allow higher densities, like in ending single-family zoning. Outsource the permitting department to a private company.
And that has shown success in Houston and Sandy Springs, Ga. In fact, I went to Sandy Springs, Ga., and you could get a permit through the private company in about one or two days. It was pretty quick. Whereas in Hawaii, it takes maybe a year. And then they implemented a new computerized system to speed things up, and so now it takes two years. [audience laughter] They call it the EPIC system and we call it the epic failure. But, yeah, do you have a question?
Audience member: Yeah, um, so the people in the ALICE, in …
Kent: Yeah.
Audience member: Whatever.
Kent: The ALICE group, right.
Audience member They’re living like almost paycheck to paycheck on their housing, and you were saying about how there’s a — I think it says a lot of neighborhoods upselling their blocks, like putting more houses.
Kent: Mm-hmm.
Audience member: I’ve seen the people in the ALICE thing would like for that to happen because that would drive the prices of the houses down. But the people that aren’t living paycheck to paycheck, the people that want their house to be more expensive so they could sell it, they need that. Right?
Kent: Yes, that’s right. That’s exactly right. It’s very perceptive because let’s just talk about the 5% to 6%. Those people who have a home may not see their home appreciate as much. They may actually see it go down as more supply hits the market. And depending on interest rates and everything, you might see prices take a dive.
So, absolutely, that could be a big problem, and so, politically, that’s the issue, is the people who need the housing don’t show up at the political process, and the people who don’t need the housing do show up at the political process. So you have the unspoken masses that, you know, don’t have a voice in this problem.
Audience member: Well, how do you go to the zoning meetings when you have to work three jobs?
Kent: Right.
Audience member: And take care of all your kids?
Kent: Right. Exactly. Exactly. I know. So often I’ll go to the zoning meetings and testify on behalf of all those people that can’t make it. But, you know, I’m viewed skeptically as well. It’s like, “Oh, who are you?” You know, “Are you really a developer?” It’s like, “No, no. I’m just a nerd, you know. So, just don’t be afraid.” [audience laughter]
Audience member: A nerd, in Minnesota.
Kent: So, anyways, I won’t go through all of these. But you can see. … And if you’d like to learn more, this is a fantastic report to go through. And again, you know, at the end of the day, you know, we’re trying to do this so that more locals can afford a life in the islands and not have to move away. So, there’s more to talk about and discuss, I can go in a lot of different directions. But that’s it. Yeah.