Getting Permitting Out of Home Maintenance

by Tom Yamachika, President, Tax Foundation Hawaii

This week we continue to focus on the City and County of Honolulu, where efforts are under way to deal with the highly backlogged state of affairs at our Department of Planning and Permitting.  As we’ve previously reported, a 2020 City audit (Report No. 20-01) (Exhibit 4.3) found that a typical residential building permit application took 108 days to process, while one for a commercial project ($1 - $10 million) took 432 days.  That is a very long time to be just waiting for a permit.

Apparently, one reason for the huge delay is the sheer number of projects that are in the queue.  The 2020 City audit tells us (Exhibit 4.1) that in the years 2014 to 2019 there were between 15,000 and 23,000 permit applications per year.  Of these, the lion’s share were for renovations and maintenance (Exhibit 1.7).  Pacific Business News reported that there were over 8,000 building permit applications were in line as of August 2022, awaiting various stages of processing.

When do you even need to get a building permit for renovations or maintenance?  The answer, as stated in section 18-3.1 of the Revised Ordinances of Honolulu, may surprise you.  Before 1993, a building permit was needed for maintenance work valued at $300 or more during a 12-month period, and for work, regardless of value, that affected electrical or mechanical installations.

Ordinance 93-59 in 1993 changed the $300 threshold to $1,000, but still said that work affecting electrical or mechanical installations still needed a permit.

Seven years later, Ordinance 20-29 said that any repairs valued at $5,000 or less during a 12-month period, even if it affected electrical or mechanical devices, did not require a permit.

This year, Bill 56 (2022) proposes to get rid of the $5,000 threshold entirely, providing that any “repairs,” meaning replacing component parts of existing work with similar materials for purposes of maintenance, would be allowed without a permit regardless of value.  The idea, as stated in an October 31 press release from Councilmember Tupola, is to require fewer permits.  “The monetary amount is outdated, especially in 2022, as the cost of materials and labor have increased due to record inflation,” she is quoted as saying.  “It is reasonable that homeowners be allowed to perform basic repairs to their bathrooms, kitchens, and other areas within their homes, without the need for a permit–especially when the permitting process has been unfairly burdensome and excessively difficult.”

Allowing work to proceed without a permit, of course, does not mean that the work will be done haphazardly, dangerously, or shoddily.  The architects and engineers who plan the work are licensed, as are the contractors who do the work.  If, despite the qualifications of the workers, there are problems in the finished project, then people can go to court.  (This happens even for projects that are reviewed by city government and for which a building permit is issued after significant delay.)

When permitting delays are largely to blame for our housing crisis, as the Grassroot Institute recently concluded in a research report that we previously discussed, getting unnecessary projects out of the queue should help.

Bill 56 unanimously passed first reading in the City Council on November 2, 2022.  Councilmember Tupola, in her press release, stated that Bill 56 is one of a set of bills she plans to introduce to attack our permitting problem.  We look forward to seeing what the others are going to be.