Housing proclamation raises ‘questions galore,’ Kent says

from Grassroot Institute of Hawaii, August 7, 2023

Question marks galore. That’s how Joe Kent, Grassroot Institute of Hawaii executive vice president, described Gov. Josh Green’s recent housing proclamation during his latest visit to the Rick Hamada Program on KHVH News Radio 830. 

Kent said that given Hawaii’s status as the most regulated housing market in the nation, the proclamation will be a sort of “experiment” to test whether lifting cumbersome regulations will result in more home building. 

However, Kent clarified that the proclamation does not lift regulations across the board. Rather, it selectively grants regulatory relief to projects designated by a committee of housing “czars.” This approach, he said, raises concerns about transparency and accountability, as public disclosure of the committee’s project selections remains uncertain. 

“Gov. Josh Green learned from the school of the COVID era that emergency proclamations, supposedly, are the way to govern and get things done,” Kent remarked. 

While the emergency proclamation technically expires after 60 days, Kent pointed out the possibility of indefinite renewals, much like the COVID-related emergency decrees issued by former Gov. David Ige.. 

“[W]e expect [the proclamation] will be continuously renewed every 60 days for I don’t know how long. Six months? A year? Who knows right now. So, there’s question marks all over this,” he said. 

Kent questioned the governor’s use of his emergency powers, but he said legislators have been dragging their feet on Hawaii’s housing crisis for years. 

“Legislators, by the way, kind of like abdicating power and responsibility to someone else,” he said. “[W]e need to push legislators, I think, to look closer at emergency powers because what other emergencies could you dream up?”

Kent urged legislators to take note of any successful regulatory cuts that come out of the governor’s emergency proclamation and consider making those permanent. 

“We’re trying to be optimistic and say that, ‘OK, look, a lifting of regulations, hopefully, actually helped produce more housing — which is the ultimate goal,’” he said. 

TRANSCRIPT

8-3-23 Joe Kent with host Rick Hamada on KHVH News Radio 830

Rick Hamada: I want to thank Chad Blair for joining us in the previous segment, but I always look forward to our time with Joe Kent, Grassroot Institute. And of course, Joe, we welcome you. Good morning. 

Joe Kent: Good morning. Aloha.

Hamada: I’ve been watching some of your video action that’s online.

Kent: Oh, good. 

Hamada: I actually played a bit of a segment. I think it was Monday when we had our conversation about “Where did the $10 billion go?

Kent: Oh, yes, yes, yes that’s right. Yeah, it’s so fun to put videos online about topics that mystify most people, likew here did $10 billion of the state budget go? And what’s really going on with the rail? And why is the cost of milk so expensive? Etc, etc …

And we’re getting a lot of … There’s a hunger out there for people to explain things in a simple way about how Hawaii works. 

Hamada: Yeah. That’s why we’re going to expand our program to 14 hours a day because that’s how much that we go. 

[laughter]

I want to jump in, if you don’t mind, with our time remaining. The emergency proclamation has been “actified” — if you will, for a made up word — but more and more commentary is being shared, and more examination of details. Joe, your thoughts? 

Kent: Yeah, well we get kind of cross-eyed when we look at this because there’s a lot to like about it and a lot to criticize about it as well. And, you know, we just have to say both. 

I mean, on the downside, this is a disruption of the balance of powers. I mean, Gov. Josh Green learned from the school of the COVID era that emergency proclamations, supposedly, are the way to govern and get things done. And that’s what we’re seeing now — with the homeless emergency proclamation and now this housing emergency proclamation. 

But, you know, the way I view it also is during the COVID era, that was kind of an emergency proclamation to impose new rules and new lockdown orders and restrictions. But this emergency proclamation, on net, is an attempt at lifting regulations and cutting rules to allow more freedom.

And so, again, that has us a little cross-eyed because there is some to like about this. 

On the upside, it does … Now that it’s passed, is an experiment — a sandbox, if you will — of like, what if we snapped our fingers and were able to lift some of the regulations? 

But then on the other, other side, we’re not really lifting the regulations; we’re lifting the regulations for certain projects. 

Hamada: That’s right. 

Kent: And so, those projects have to be picked by a “czar” — a working group of people who, you know … basically a lot of the bureaucrats who already had the agencies that a project would have to go through. And some nonprofits are going to now hand-pick those projects for which the regulations will be lifted.

And then another “other, other” is the transparency laws were waived for this process. So, we’re really looking at this closely. We’re trying to be optimistic and say that, “OK, look, a lifting of regulations, hopefully, actually helped produce more housing — which is the ultimate goal. And we want legislators to look closely too, to write down which of the regulations that were lifted, which of those things worked, and maybe we can make that a little more permanent.” 

Hamada: So, some of the details: Number one, it is an emergency proclamation. This is a test run, if you will. There’s an expiration date — I believe it’s a 60-day duration.

And now, does it mean as an emergency proclamation — as we learned during COVID — that it must go to the Legislature and the Legislature must approve? And what is some of your thoughts about taking elements of this, codifying it in the legislative session via bills, and having it made into law?

Kent: Well, there’s two things that could be changed about the law: One is the housing regulations, and the other is the emergency proclamations. 

I didn’t mean that to rhyme, by the way. 

But basically, the housing regulations in Hawaii, of course, we’ve seen are way, way, way too many. We’ve got the most housing regulations in the nation.

And so, if legislators look closely and snip, snip, snip at the Legislature to, you know, snip some of the housing laws — that would probably be a good thing. Particularly, the ones we’re watching are the state Land Use Commission ones, which have classically been called the most burdensome of all the regulations. And a lot of them are duplicative at the county level anyways. So, that’s a place to start. 

But then, when you look at the emergency proclamation side — the emergency power side — yes, the Legislature is giving, in a sense, the governor the emergency powers. They failed to act in previous years to restrict the governor’s power. And so, this is kind of a lesson to the Legislature.

Legislators, by the way, kind of like abdicating power and responsibility to someone else. But they don’t really want, I think, people to understand that it’s them who actually are the checks and balances of this whole equation. And so, we need to push legislators, I think, to look closer at emergency powers because what other emergencies could you dream up?

I mean, could we have an agriculture emergency? A climate emergency? An energy emergency? I mean, the list goes on about how many emergencies you could supposedly think of to justify, basically a kingdom that we could create. 

And then there’s right now, it’s kind of a temporary kingdom — 60 days, as you mentioned — which we expect that will be continuously renewed every 60 days for I don’t know how long. Six months? A year? Who knows right now. So, there’s question marks all over this. 

Hamada: There is the inevitability of legal action expressed by organizations such as Sierra Club. What has been the volume of legal concerns and challenges? Is there a lawsuit in the offing that you may be aware of? And are there other parts of the community that in fact are very supportive, which could cause a bit of a confrontation outside the fifth floor?

Kent: Well, I totally expect lawsuits on this and we can already hear certain groups talking about that. I haven’t seen any actual lawsuits yet, though. But, you know, even during the COVID era, there were lawsuits galore. 

Now, it just goes back to the judges though, and their opinion about: Is this really constituting an emergency or not? And that’s anyone’s guess what’ll happen there. But yes, I can see the lawsuits coming.

Hamada: And finally, what is your estimate of the initial stages of the proclamation by response, reaction? And when can we anticipate actually a palpable, if you will, result of this action? 

Kent: Well, in August, I believe, is when the working group is meeting for the first time to actually look at proposals that developers have submitted to them for projects that they’re submitting to for which regulations will be waived for. 

But we still don’t know if the committee or the “czar” or the governor will actually speak out about which projects those are.

 I think they would be smart, though, because we’re already a little concerned about the transparency and openness during this process. So, being forthright, beyond what they’re technically supposed to be, would help quell the public’s concerns about this. 

Hamada: No doubt. Tell us about Grassroot Institute. 

Kent: Well, if you haven’t heard or seen our Instagram or YouTube or website, we’re a think tank that is basically a PR firm for liberty, free markets and accountable government. 

Someone has to watch what they’re doing in the big square building and at the councils, and if it’s not us, we’re not sure who it will be. Someone has to advocate for lower taxes and a lower cost of living and for accountable government — and so, it might as well be us. 

We’ve got 10 employees and 10 part-time employees. So we’re a group, also, of nerds with calculators in an office that try to help dream up better solutions for Hawaii. 

Hamada: Well, first of all, you’re a heck of a nerd. 

Kent: Thank you. [chuckles]

Hamada: Second of all, I am a nerd by association, so I like where we’re going. 

Gotta go to rail. And the reason why is that we’re just over a month into the project.

Now, I know there’s a lot of focus on ridership and even you expressed cost per rider based on [the] present. But then again, we’re being counseled, “OK, hold on a second, school’s getting back and then let’s complete at least the second leg to get a [better] understanding of what the potentiality is.” 

However — definitely your commentary on that — but the project itself, Dillingham Boulevard; that corridor, plagued. And I know businesses on that corridor that are expressing great difficulties. And now, not one, but two gas line ruptures caused by Nan, the contractor.

And then responses by HART [Honolulu Authority for Rapid Transit], which I’ll talk with Lori [Kahikina] and Rick [Keene] tomorrow, about how that can occur and the diligence being paid to the details of this work. 

Your thoughts, Joe Kent. 

Kent: Well, now we are starting to realize and discover why they started the rail way out in the country. Because now that it’s going into the city core, we’re seeing more visible disruptions to business and infrastructure and possible eminent domain cases and on and on.

And so, the last few miles of this rail system are going to be the most painful for residents of the city. And I’m trying to take a step back and look at: What does it all cost?

I mean, yes, we have seen ridership fall from around 4,000 to around 3,000 per day — sometimes less. And I, before calculated that would cost around $54 per passenger ride at 4,000. But now that it’s fallen, that number’s gone up to around $77 per passenger ride. So, you know, when the number goes down the cost per … [inaudible]…running it. 

And that’s $85 million if you multiply it by seven — let’s say seven years. That would be half a billion dollars that we could save on the project instead of wasting it, in a sense. 

Hamada: So, is that $85 million, is that actually for this first phase of operations and maintenance? 

Kent: So, the $85 million is the fiscal annual cost.

Hamada: Annual fiscal. 

Kent: Yes. 

Hamada: So that is, as of right now, this fiscal year, $85 million allocation O&M [operations and maintenance], even though there’s only one phase open until 7 p.m. that has a ridership of, as you described …

Kent: Around 3,000.

Hamada: In that number.

Kent: Yeah, that’s right. And that includes electricity costs, which I think make up the bulk of that by the way, so, yeah. 

Hamada: Talking with Joe Kent. We have some time remaining. 

Joe, I’d like for you to get your commentary. And that would be on the Chamber of Commerce urging Gov. Josh Green to pause an unemployment tax increase. 

Kent: Yes, well, we were warning about this. And, I think the Legislature just forgot to pause the automatic tax hike that’s written into law, which says that when the unemployment … [inaudible]…businesses and throw a bunch of people onto unemployment. But don’t worry, you know, we’re gonna paper over it with a bunch of money from the unemployment fund. 

Well, that fund tanked, and guess what? Now we’re paying for it in the form of higher business taxes. So, we’re seeing businesses with payroll taxes that are, you know, 2x or 3x. And they’re not prepared to pay for this. Some of them can’t expand; some of them might have to close. 

And so, they — the Chamber of Commerce — is urging the governor to somehow pause the tax and also urging legislators to knock the tax down for next year. Which it’d probably be a good idea because, you know, the tax ratcheted up way too quickly; they could have notched it down a little bit. 

But we have to try to focus on keeping taxes low in this state because we already are kind of a tax hell and businesses are struggling. We are one of the worst places in the nation to do business, and any steps that we can do to help that would help.

Hamada: And once again, talking with Joe Kent. Remind us — not only you’ve shared about Grassroot Institute of Hawaii — but how do we seek you out and learn more? 

Kent: Well, we’ve got an awesome Instagram page that everyone’s on: It’s grassroothawaii, if you go there. Or you could go on YouTube; just search for Grassroot Institute of Hawaii. Or get on our email list of 40,000 people in the state who get the news behind the news about what’s really going on, at grassrootinstitute.org. 

Hamada: There was a great deal — in wrapping things up here — a great deal of news information and headlines about the Honolulu Liquor Commission. 

Now, various departments within the city have come under great questioning, including DPP [Department of Planning and Permitting] and more. 

Is there any update in regard to the Liquor Commission? And have you heard anything about the disbursement of Narcan in bars and restaurants in Honolulu?

My question is: Does anybody know how to use it? 

Kent: Well, I’ll have to research that one more. That’s a good topic, but yeah, I’ll have to look at that a little bit more. Next time. 

Hamada: Nope. That sounds good, that sounds good.

Again, the invitation for us to see you. Give us that invite once again, Joe.

Kent: Grassrootinstitute.org. And we also have cartoons and editorials. We just won a state Society of Professional Journalists award a couple weeks ago for our cartoon: Best editorial cartoons in the state. 

Hamada: That’s right. 

Kent: So, yeah, that’s Dave Swann [who] won that award for us. So, Grassrootinstitute.org. 

Hamada: What’s on your radar in the coming week?

Kent: Well, I’m looking at the TAT [Transient Accommodation Tax] revenue, which is the taxes. Which, now the counties are trying to submit a bill to the state Legislature that would hike taxes on tourists, even more than we already have. And Hawaii already has the highest taxes in the nation on tourists; we’re like around 13% for the TAT plus the GET [General Excise Tax]. But they want to raise that 3% more. 

And so, that’s concerning. It goes back to the business thing again: Yes, it looks like you’re taxing tourists, but you’re actually taxing us because that’s local jobs too. So, we’re just trying to head that off at the pass. 

Hamada: We will get updates on that and more when we get together in a week.

But Joe, I can’t thank you enough for taking the time and being part of the program. 

Kent: Great. Thanks so much, Rick. 

Hamada: Thank you, Joe. Joe Kent with Grassroot Institute of Hawaii.