How to win the housing permitting game

by Keli’i Akina, PhD, President/CEO, Grassroot Institute, Nov 5, 2022

I’ve been playing a new online game, but no matter what I do, I can’t seem to win.

It’s a real-life simulation about getting authorized to build a house for your family. But I keep getting tripped up by Honolulu’s permitting process.

The creative folks at Honolulu Civil Beat have put together an interactive game that takes you on a permitting journey. In it, you navigate delays, missing emails and bureaucratic difficulties. 

You have to choose whether to spend more money in the effort to speed things up or whether to save your money for the $800,000 in construction you have planned. 

The problem is that the game is a little too real. Try as I might, I always end up frustrated and thousands of dollars over budget — just like far too many Honolulu homeowners.

The Civil Beat game is a great way to understand the effects of Honolulu’s permitting backlog. It also gives you some insight into how permitting delays and bureaucracy contribute to Hawaii’s acute housing crisis.

Unfortunately, the problem is more fundamental than bureaucratic inefficiency. Hiring more inspectors or pouring more money into high-tech software might help to some degree, but those are just cosmetic.

The fundamental issue is that there are too many things in Hawaii that require government permission. That is why my colleague at the Grassroot Institute of Hawaii, Ted Kefalas, testified before the Honolulu City Council this past week in favor of Bill 56. The measure would remove the requirement that homeowners obtain a permit for certain repairs costing more than $5000 a year. 

In practical terms, this means homeowners would be able to renovate their kitchens or replace their outdoor decks without having to wait months and spend thousands of dollars on permits.

It also would reduce Honolulu’s scandalous permitting backlog, because suddenly a lot of permits would not even be needed anymore.

Further, if as a law it could show that permitting is unnecessary for home repairs, perhaps Honolulu lawmakers could take the next logical step and streamline permitting for new home construction as well.

They could achieve that by instituting “by right” zoning, under which any proposed project that meets all existing zoning codes and various community plans will automatically be issued a permit.

It’s a concept currently being considered by the Maui County Council’s Affordable Housing Committee for affordable housing projects of fewer than 150 units. The Grassroot Institute of Hawaii testified in favor of that too — though why stop there? 

Even better would be to remove political reviews for all proposed home construction that meets the existing legal requirements. We would hear less from the “Not in My Back Yard” crowd and start to see more housing.

Pending removal of the vast array of permits required, another way to trim the permit backlogs would be for our state and county permitting agencies to work more with the private sector. 

The Hawaii County Cost of Government Commission expressed interest in that idea just last week after hearing testimony from my Grassroot Institute of Hawaii colleague Joe Kent. 

Kent said he had recently visited John’s Creek in Georgia and saw a man apply for and obtain his permit in a single day. He said when a backlog develops in John’s Creek, or a permit is complex, the civil servants there outsource the work needed to a private company. 

It’s an approach similar to Honolulu’s provision allowing for third-party review, but in this case, the third party is working for the county, not the property owner.

Kent offered the idea as a follow-up to testimony presented by Institute policy researcher Jonathan Helton, who discussed how Hawaii County could take advantage of legal exceptions to the infamous “Konno decision” to improve its delivery of public services.

The 1997 state Supreme Court decision basically said local governments cannot hire private sector workers to perform jobs that “customarily and historically” have been provided by civil servants. But the Legislature has carved out some exceptions, one of which is a one-year exemption for “special or unique” services that are “essential to the public interest” and cannot be filled by civil servants. 

Kent suggested the county could use that exemption to hire a private contractor and help reduce its permit backlogs. 

Of course, reducing Hawaii’s permitting backlogs won’t alone solve its housing problem entirely, but it’s a good first step. 

Ultimately, the one unassailable fact is that government regulations are the most significant contributor to Hawaii’s high cost of housing. That’s why reducing those regulations is critical.

E hana kākou! (Let’s work together!)