Will more bureaucracy solve permit delays?

by Keli'i Akina, Ph.D., President / CEO, Grassroot Institute of Hawaii

Hawaii’s high cost of housing has multiple causes, one of which is the time it takes to obtain a building permit, whether that be for a new home, a whole bunch of new homes or even a simple home improvement project.

As the University of Hawaii Economic Research Organization noted in its recent report “Measuring the Burden of Housing Regulation in Hawaii,” the average delay for permits or approvals in Hawaii is more than three times as high as the national mean. And “extreme delays in permitting will generate significant costs and uncertainty for developers, creating a disincentive for new projects.” 

In other words, time is money, and if things take too much time, expect to pay higher prices for homes — if homebuilders are willing to build them at all.

Before I go any further, let me just say I appreciate that some policymakers are starting to address our permitting delays and backlogs. But I do have one important piece of advice when it comes to finding the solutions: You cannot reduce a bureaucratic delay by adding more bureaucracy.

More about that in a minute.

First, let us recognize that Hawaii’s permitting problems have been causing grief throughout the islands for years. Reviews and audits have consistently pointed out that excessive delays are a major problem. Contributing factors are said to include inadequate staff, “inefficiencies” and multiple review cycles.

On Oahu, Honolulu Department of Planning and Permitting Director Dean Uchida said at a town hall meeting in late July that wait times for residential and commercial permits can now stretch for as long as two years.

At the request in August of Honolulu County Council member Andria Tupola, Uchida revealed there are more than 8,000 permits stuck in DPP review limbo. As of Aug. 11, 3,499 permit applications were in the pre-screening or initial processing phase, 4,780 were under review and 1,113 had been approved and were waiting to be picked up. 

Tupola, who requested the DPP information, called the results “discouraging.” She told Pacific Business News this week that questions about the backlog often come up at public events.

“Just like Disneyland or the grocery store, you want to know how long the line is you're waiting in,” she said.

Of course, waiting two years for a building permit isn’t quite like waiting to ride Disneyland’s Matterhorn Bobsleds or Space Mountain roller coaster. But the point is well taken, and I think we can all agree that Hawaii’s permitting backlogs need to be cleared. The big question is: “How?” 

Suggestions I’ve seen include spending more money on new software or personnel, speeding up the hiring process for new employees, proposing legislation to address automatic permit cancellations, starting courtesy residential and commercial inspections and collaborating with private industry professionals.

So now we get back to my bit of advice. Many government officials are suggesting more personnel should be hired to deal with the backlog. But the reality is that enlarging the various permitting departments would only add more people to the process that created the backlogs in the first place.

When I talk about the need to streamline the process, I don’t mean that there should be an express lane for people who meet a series of special qualifications, which then launches a new set of pre-approvals. 

Nor do I mean that the government should pour more money into speeding up the process slightly. 

What I mean is that we need to get rid of some of that process altogether.

That can mean creating certain “pre-approved” changes or plans that don’t require permits. It can mean eliminating permits for certain categories and doing away with redundant cycles of review. It can even mean exploring ways to privatize the permitting functions so that the permitting departments become unnecessary.

But the best approach may be to rethink the necessity of some permits altogether. Recent research by the Grassroot Institute of Hawaii has shown the value of by-right zoning and building. This approach allows any proposed construction that conforms to the existing land-use and building codes to proceed “by right” — without the need for more governmental approvals or permits. 

This may seem like a revolutionary idea, but it actually has been tried and tested elsewhere with great success, such as in Tokyo, the world’s most populous city, where homebuilding has been able to keep up with demand and home prices have been relatively stable.

It simply is not possible to fix Hawaii’s housing crisis through small changes to our permitting and approval rules. We need a new approach that produces affordable housing by encouraging more homebuilding, not delaying it. 

E hana kākou! (Let’s work together!)