Governor’s housing proclamation could be a ‘Pandora’s box’

from Grassroot Institute of Hawaii, October 4, 2023

After years of legislative inaction on Hawaii’s housing crisis, Gov. Josh Green took a decisive step in July by issuing an emergency proclamation, slashing much of the red tape that hinders homebuilding. But do the ends justify the means?

That was the question co-hosts Tom Yamachika and Mark Coleman discussed with guest Loren Seehase on the Sept. 26 episode of “Talking Tax” on ThinkTech Hawaii.

The governor recently modified his proclamation in response to heavy backlash from those upset by the suspension of certain laws. However, it still retains many of its original elements. 

Yamachika, president of the Tax Foundation of Hawaii and a Grassroot Scholar, commended the governor’s action as a bold attempt to cut through the “labyrinth of laws” that have hampered housing development, stating it was a “good idea” to “once in a while, go in and break the system.” 

In contrast, Seehase, a graduate of the William S. Richardson School of Law and senior counsel at the Liberty Justice Center based in Chicago, criticized the proclamation as a clear case of government overreach. 

“The governor, by Hawaii Constitution and our doctrine of separation of powers, only allows him to enforce laws — not create laws,” she said. 

She characterized the proclamation as a “Pandora’s box,” adding: 

“[W]hat he declares as an emergency today, while it seems good on its face — because, you know, everyone in Hawaii or most people in Hawaii will agree: “Yes, housing is an issue. Yes, permitting is an issue” — maybe tomorrow the emergency isn’t something we agree with.” 

Coleman, managing editor and director of communications for the Grassroot Institute, agreed with Seehase on some of the “problematic” aspects of the emergency order, including the Build Beyond Barriers Working Group established by the proclamation as the sole authority for approving affordable housing projects. 

“Even within itself, it’s got too much red tape going on there,” he said. 

Nevertheless, Coleman described the sentiment behind the proclamation as “proper” and called it a “wonderful blueprint” for the Legislature to enact permanent change. 

“I think we need more bold moves like this to really expose what’s wrong in the system that we now have,” said Yamachika. 

TRANSCRIPT

9-26-23 “Talking Tax” with Tom Yamachika, Mark Coleman and Loren Seehase 

Mark Coleman: Aloha, everybody. I’m Mark Coleman, and I’m here as the co-host today of this week’s episode of “Talking Tax.” My co-host — or really the main man here — is Tom Yamachika, president of the Tax Foundation of Hawaii. 

And our special guest today is Loren Seehase. She’s a William S. Richardson School of Law at the University of Hawaii graduate, and she’s currently with the Liberty Justice Center based in Chicago, although she’s living in Florida. 

She’s a graduate also of Indiana University with a business degree, and she’s going to help us talk about the governor’s housing emergency proclamation. That’s our topic today. 

It was the topic of Tom’s most recent column, which is published in various newspapers around the state and also on the Tax Foundation of Hawaii website. So, check that out. 

But basically, we want to look into: Was that a good idea? He used his emergency powers under the state constitution to declare a housing emergency, and he suspended all kinds of laws. It generated a lot of backlash from people who didn’t like some of those laws being overturned or suspended, some of those laws. 

And so, actually, this was issued in July. And since then, he has, just like last week, he updated the proclamation. He had been — there have been many lawsuits filed against him, and some of them have really good reasons for their arguments. 

Anyway, much of it is still in effect. He revised it and got rid of some of those things that people objected to, but there’s still a lot of laws that are suspended. So, we’re going to talk about the whole wisdom of whether this was the right thing to do, whether it’ll achieve its goals. 

Tom, you wrote that article. You were kind of questioning whether it was a good thing. Since he revised it, have you changed your mind at all about what the status of that situation? 

Tom Yamachika: Well, let’s kind of start with the background. What is it; what the emergency power statute is; and where we go from here. 

The emergency power statute we have in Hawaii is, you know, a statutory framework that lets the governor — basically, when an emergency is happening, or when an emergency has happened, you know, the governor has given extraordinary powers to deal with it, including suspending all kinds of laws at his discretion if they’re going to impede the emergency or the emergency relief effort.

And, you know, we saw that play out during the pandemic because Gov. [David] Ige, his predecessor, used the emergency power statute and kind of chained emergency proclamations — I think each one lasts 60 days. But he kept it going, through the state of emergency, for about a couple of years. 

And obviously, when you do that, you know, there are questions that can be raised about, well, are you doing the right thing? Are you really, you know, making yourself king? And what, you know, why do we have a Legislature if the governor can just sweep all those laws aside? And that kind of thing. 

But we’re talking today about, you know, the current governor and the current so-called “state of emergency” that was used to justify an emergency proclamation for housing. The creation of a housing czar, which had the ability to sidestep or circumvent, you know, different kinds of processes that are, you know, currently in place that regulate housing.

There is, for example, a permitting process; there is a process for what happens if you find historic Native Hawaiian artifacts or burial sites; there’s a process for historic structures; there is a state Land Use Commission; there are county zoning and permitting bodies — all kinds of stuff to get through.

And not surprisingly, housing is a big problem here in Hawaii in terms of trying to get, you know, get anything built — you have to maneuver through all of this stuff. So, the governor basically has issued this emergency proclamation to kind of cut through all this maze — this labyrinth of laws, regulations and so forth. I think the question is …

Coleman: Yes, it’s called red tape. But there are good reasons, I guess, for some of those laws. But anyway …

Yamachika: Yeah, well, of course there were. I mean, that’s why they were passed in the first place. 

Coleman: Yeah, theoretically, they were good ideas. But in total, they combine to just create this sludge, you know, that people have to trod through, taking years to get anything built, if they can get it done at all.

You know, the — this goes back to me, in my mind, this has something to do with the police powers of the government. Supposedly, the police powers. Under state law, as you know — and as you noted, I think in your article — that, you know, an emergency in Hawaii under state law is whatever the governor says it is, right? 

So, it doesn’t matter. Even though, in the proclamation, it says “to protect the health, safety and welfare of the people,” I think that’s the essence of state police power. And just about any law, you can do just about anything, if you can say you’re — apparently — if you can say you’re protecting the health and safety and welfare of the people. 

So, there is no definition. I know there were some people saying, “Well, this isn’t really an emergency.” But according to the law, it’s up to him, right? So, that’s a problem. Loren, what do you think about that broad stroke? 

Let me go back a little bit here. During the COVID era, the Grassroot Institute of Hawaii — which I’m affiliated with — we did put out a report outlining the problems with the state law, and we urged reform. For one thing, to make the cutoff point for the emergency — 60 days — subject to approval of the Legislature if they wanted to extend it. 

That law didn’t get passed. There were some other things that the Institute proposed relating to reforming that law. But, yeah, Tom’s right that even before this housing proclamation, the governor, Gov. [Josh] Green, the current governor, had issued a homelessness proclamation in which he suspended almost all the same laws.

We did a — we started to look into that. We were doing some research on that, about all the laws that got suspended. And then he came out with the housing proclamation, which was just way more general, but it was all the same stuff. 

Anyway, it seems to me that this police power is like, it’s pretty broad. I mean, don’t you think, Loren, about that? 

Loren Seehase: I do. I think that this is definitely a situation of government overreach. You know, there’s several issues going on with the proclamations for housing. 

You know, the statute you mentioned — the HRS 127A — it defines disaster or emergency as basically an occurrence, or the imminent threat of an occurrence. So, and that occurrence has to be the threat to loss of life or injury to people, loss of property or loss of environment. 

You know, so it’s pretty specific. And traditionally speaking, you know, like you mentioned, most of us think of a hurricane, a tsunami, a wildfire, you know, natural disasters out of our control. Not something that has taken decades in the making, and is really not an emergency by traditional standards.

So, I do think this is a situation of government overreach, where we have a housing proclamation for a problem that, you know, is multifaceted. It’s not just about the overregulation; there’s other aspects to why people can’t afford homes in Hawaii, other than the permitting — although the permitting is a big problem. 

The issue with the proclamation itself — it not only, I think, is unconstitutional, I think it exceeds the governor’s constitutional authority. You know, the governor, by Hawaii Constitution and our doctrine of separation of powers, only allows him to enforce laws — not create laws.

And in this proclamation, he not only created an agency, but he promulgated rules for that agency to follow, and basically suspended county and state laws so that he could have his own agency decide for affordable housing. You know, and at first glance, it appears as though, “Oh, it might help everybody with the permitting.”

You know, everyone complains — from developers and contractors to single-family homeowners — you know, they complain about the permitting. And there’s valid concerns for the time it takes for a permit to get approved in Hawaii, but this proclamation only addresses affordable housing — or at least it purports to only address affordable housing. So, it is very interesting.

Yamachika: Well, I mean, you mentioned that this isn’t, you know, traditionally what you call an emergency. But there really are not a whole lot of guardrails around what a traditional emergency is. 

I mean, if you’re saying, for example, that an emergency can’t be if it’s, you know, months, years or centuries in the making. Well, what about if astronomers found an asteroid that they predicted is going to slam into Oahu in three months time? 

Certainly, that disaster was years or millennia or, you know, hundreds of millions of years in the making; we just happened to be at the tail end of it and we got three months to go, and you say that’s not an emergency because of that reason? I mean …

Seehase: Not necessarily. So, according to the statute, it defines the emergency as an occurrence or the imminent threat of an occurrence. So, in that situation, it would be the occurrence — or the imminent threat — of the asteroid hitting Hawaii, in your example. 

Where this is something that is — when we talk about housing and the issues behind the permitting, you know, even the Building Beyond Barriers Working Group has admitted that part of the problem is lack of staffing. 

You know, that’s not an overnight problem; 30 to 40% of the required employees for the different agencies — they didn’t disappear overnight. 

Another problem that isn’t being addressed is … 

Yamachika: Well, you can say the same thing about the wildfires. I mean, because of understaffing, all of these non-native dry brush grew and grew and became tinder all along the way from the mountains to Lahaina. 

It got ignited by whatever, you know, spread like crazy and leveled the town.

Coleman: Wouldn’t that be arguing, in that situation, [it] sounds like it would have been a nice thing if the governor had declared an emergency to clear the fields of the tinder before they caught on fire. But of course, they never did that. 

You know, the whole Lahaina thing is just poor land management and bureaucracy to the max.

But as far as the housing proclamation goes — yeah, he suspended laws like, I think it’s called Chapter 76, that will allow him to, that will allow the government agencies to hire third-party viewers and contract with the private sector. 

Because right now, there’s a state Supreme Court decision — the Konno decision — that won’t allow counties or the state to hire contract workers or privatize anything if it’s traditionally — if it’s something that’s traditionally been done by civil service workers, which are all unionized, of course. 

And then, of course, the original law also suspended, like you said, historic preservation — the original proclamation, excuse me — and environmental impact statements, and even public record laws, which is outrageous. But they did that during the COVID era, too, so… 

Yamachika: Yeah, I mean, during the COVID era, it was even worse in the beginning. Because they suspended …

Coleman: Yeah, they made us stay in our homes. Yeah, our freedom of assembly, our, all — you know, that was just outrageous. And so, Gov. Green, you know, he grew up — he was trained in that environment as the lieutenant governor.

And even during the governor, Gov. Ige’s era, he was in charge of an emergency proclamation to create a kauhale — a little village for homeless people — under emergency proclamation. So, I think that’s where he got the idea for the homeless emergency proclamation once he became governor, that he signed while he was giving his, you know, his inaugural address, as I recall.

But then it turns out he was also working on this broader housing proclamation. And I think the arguments that, you know, Earthjustice — I think it was Earthjustice, but anyways — Sierra Club and ACLU and all these other groups, they were saying, “First of all, this isn’t really that kind of an emergency. Secondly, he consulted with like over 200 people over periods of months about this before declaring it an emergency. So, obviously, this is stuff that could have been handled legislatively.”

I mean, cause that’s what legislators do. They get together and talk for months about things like this. And he backed down. I mean, I don’t know if you want to call it backing down, but he — maybe it was, he wanted to be pono and “E hana kākou” like the Grassroot Institute. 

And he went, “OK, I’ll get, I’ll restore all those laws — at least a lot of them — and you know, we’ll try to make it, we’ll try to finish, we try to accomplish what we want with what’s left.”

But I think, you know, whereas, for example, in the Grassroot report, our conclusion was: Trying to sue over that COVID emergency proclamation was very problematic, because the courts tend to favor, they tend to side with the government in times of emergency — a clear emergency, which in the first, you know, shutdown for two weeks, is what we were told, right?

But after it started dragging out, you know, you thought maybe you might have a better chance of winning in court. But we didn’t do that, because the Grassroot Institute didn’t sue because of the fear of possibly a precedent that might make winning such, you know, that a precedent that might go against the claim against the emergency proclamation.

Yamachika: Well, and actually, there was a suit that was brought on the Big Island by, you know, some people or other, and it was brought in the Circuit Court level, and the government won. You know, during the emergency, the COVID emergency proclamation.  

Coleman: Well, they won by it being dismissed, right? I don’t think they had a precedent.

Yamachika: Well, yeah. I mean, there certainly isn’t any appellate case law on it. But the question then becomes — look, I mean, are you going to argue that emergency proclamations or emergency laws are invalid because you had a lot of time to plan them out? 

I don’t think that’s a valid argument because, you know, you want that kind of deliberation if you can.

Coleman: Well I think you said that in your article, and I think that’s a really good point. But what do you think about that, Loren?

Seehase: Well, while I understand that, you know, deliberating on a certain emergency ahead of time is important, the things that he’s deliberating on really should be taken care of by the Legislature and by the people. 

You know, this type of issue is not something that should be taken over by the governor, almost in a dictatorship manner, you know? Because what he declares as an emergency today — while it seems, you know, good on its face because, you know, everyone in Hawaii, or most people in Hawaii will agree [that] yes, housing is an issue; yes, permitting is an issue — maybe tomorrow the emergency doesn’t, isn’t something we agree with because it’s, you know, another long-term thing that’s on his agenda.

You know, so picking and choosing battles and what, you know, is an emergency outside of the traditional occurrence or imminent threat of an occurrence to loss of life, property and environment, I think we’re really opening kind of Pandora’s box to what could potentially be an emergency. 

You know, we’ve seen it with a couple other governors across the country recently. The New Mexico governor issued an executive order saying, “Well, guns are an issue. So, you know,” and I’m paraphrasing here, but basically, “I’m going to suspend the second amendment.”

And that was very quickly — yes, very recently — and that was very quickly fought with a lawsuit. I just saw the news the other day that the Colorado governor issued an executive order saying, “All state agencies will stop,” I think, “immediately using gas-powered lawn mowers.” 

You know, and so where does it — how is that an emergency? Or is that something that can be better taken care of with the Legislature? And I think that if we start to erode our separation of powers and make judgment calls like, “Well, it benefits us today,” it may not benefit us tomorrow, you know? And that, I think, is a slippery slope.

Yamachika: Well, that’s something for the courts to say, I think. 

Seehase: Oh, I agree.

Yamachika: That’s something for the courts to say. And there are standards that the courts can use to say, “Well, is this an emergency or not?” 

And there’s a process behind it. In [HRS] 127A, you know, somebody files for an injunction against enforcement of the emergency powers, you convene a three-judge court, and then off you go. But none of that’s happened yet. 

Coleman: Tom, I’m sensing that you’re sympathetic to this executive order — and as we’re, as am I actually, because of what it hoped to achieve. 

Like Loren said, I think everyone kind of liked the idea. But when you get into the nuts and bolts and really the rationale behind it, then it becomes more problematic. And I’m just wondering if you’re being swayed more by the goal as opposed to the process. 

Yamachika: Well, yeah, I think the end has a little bit to do with it as well. I mean, here, you have a kind of long-running problem that we’ve had in our government for decades. 

And we’ve given the Legislature, you know, tons and tons of years to do something about it. And for whatever reason, they couldn’t, or didn’t or won’t, so — and relief hasn’t happened. 

And I think if I were to go to the Legislature today and I told them, “Well, you know, you should do X, Y and Z,” somebody’s going to ask me, “Well, where the heck is the evidence to show us that X, Y and Z works?” And, for that reason, I think it’s a good idea to, you know, once in a while, go in and break the system, and then see what drops out, see what’s working, see what’s not. 

And then you can go to the Legislature and say, “All right, you know, these are the parts that are broken, these have to be fixed,” you know, “the land-use part’s OK; the historic preservation part’s OK; but this permitting, this permitting garbage has to be dealt with.”

Seehase: I think that raises a really great point. You know, the working group that he created, really, the purpose shouldn’t be to determine what projects go forward. But it should be used to determine where the issues are in the process.

What is the root cause of the delay in permitting, the lack of developers, the lack of affordable housing? Get to the roots of the problem and present those issues to the Legislature and say, “Hey, we have convened state and county officials. We’ve convened non-profits and for-profits.” 

You know, get the community’s input. You know, talk to the construction industry, talk to single-family homeowners, and find out what’s going on.

And really, I think that you then take that information to the Legislature rather than dictate, “Well, now that we have found it, we are going to be the sole determining factor of projects going forward.” 

Coleman: Yeah, I think one of the really cool things about this emergency proclamation, and coming from a Democratic governor even — you know, in this really blue state, which loves regulation, tends to love regulation — is that it so clearly identifies so many of the laws that have caused this problem. 

I mean, even aside from that it’s an emergency proclamation, it’s a wonderful blueprint for what things need to be changed. And I do think the Legislature was, has been finally coming around. There have been some tiny steps recently that we never would have seen, you know, years, a few years ago.

But I do like the idea of that, you know, it’s — that it was, you know, creating a petri dish, creating a little, like, enterprise zone. That’s sort of — that’s sort of, he’s trying to have an enterprise zone for the whole state, and, you know, let’s see what happens. 

But couldn’t he have done that like — like, for example, in the revised emergency proclamation, they exempted Lahaina from any of the changes. So, I think that’s what it was. So, everything there is going to be up to the people of Lahaina to decide. 

Yamachika: Well, 60 days later, that can change too. 

Coleman: [Laughs]

Seehase: Right. That’s part of the problem. 

Coleman: That is part of the problem. So, you know, you’re going to build — you’re going to have a housing revival in 60 days? No. So, he’s going to have to extend it, right? How about 60 days later? No. So, here we go again. You know, three, right … 

Yamachika: Well, I mean, he has previously announced that he’s going to do this for a year. 

Coleman: Yeah. 

Seehase: Yeah, I believe in the rules that even says that anybody that they hire for this working group or any of the agencies, the term won’t exceed a year. But I’m sure, you know, just issue another proclamation, and, you know, that can change. 

Yamachika: Yeah. And at any point, you know, somebody can, you know, bring a suit to invalidate this, which I think is the legitimate way of dealing with it. 

Coleman: But what do you think — do you think the court would go along with that, Tom? Do you think that the, you know, that the judiciary here would side with the governor and say, “No, it’s … ”

Yamachika: Well, I think Loren’s right up to a point. I mean, I think she had mentioned initially that, at least during the first, you know, few days, weeks, months of the supposed emergency, the courts would probably be willing to give the governor a lot of latitude. 

But as time wore on, I think their patience would be limited, and I think that that’s kind of the correct result. 

Seehase: I do think there’s one argument out there that I haven’t seen presented yet in the lawsuit that has some merit. So the governor’s basically policy and procedure or practice has been to issue these recurring emergency orders every 60 days. 

And the statute, I think, is pretty clear that it says that you, that [the] emergency proclamation will terminate at 60 days or by separate proclamation, whichever occurs first. You know, and standard statutory interpretation requires that you read the clauses that, you know, are conditioned upon each other. 

And whichever occurs first, I think the interpretation is that, you know, if there was an emergency proclamation, he has 60 days. And if for some reason the emergency ends at 45, he can issue a separate one, and then it ends at 45. 

Yamachika: By the same token, if the emergency still exists on day 49, he can issue a proclamation day 49 saying, “The emergency still exists, and I’m going to reinstate everything that was in the first proclamation, and proclamation number two has 60 days,” which is what Gov. Ige did.

Seehase: Right. In which case, I think that that violates the non-delegation doctrine and the separation of powers, and we run into a serious constitutional issue. 

And I don’t think the courts in Hawaii have yet specifically grappled with that. I don’t think that anybody’s brought that forth just yet. 

Coleman: Yeah, it occurred to me, too, when I was talking about the lawsuits that prompted the governor to revise his emergency proclamation. You know, when I saw the content of the — when I saw the arguments that they were putting forth, I thought, “Wow, these are really good arguments. This is going to be a tough one if it goes to court.” 

And I wondered if maybe Gov. Green, you know, thought, “Well, maybe I better back out unless, because if I don’t or, you know, change course,” not only would he make all the progressive people happy — they were the ones basically pushing the lawsuits — but — and he’s a progressive, so he wants to make them happy — but also, he might have been afraid of a precedent that could lock him in in the future to, you know, less broad-based proclamations. 

Do you think that could have been a factor? 

Yamachika: At some point, precedent’s got to be made. And I think during the early part of a declared emergency is the easiest time for the state to get in there and reaffirm that the power exists. 

So, if I were the AG [attorney general], I would want the challenge to be made now in the early stages of the so-called emergency and, you know, have the courts rule. 

Seehase: Yeah, I can’t speak for, you know, the rationale behind walking back some of the, you know, emergency proclamations and the laws that were suspended. 

But, I mean, I do think that a consideration might be, you know, precedent creating law that says, you know, “This type of situation is not an emergency under the statute.” 

You know, so that could prevent him from doing, you know, kind of what I mentioned before that this Pandora’s box of, “Oh, well, anything can mean emergency, even though the housing crisis has been in place for decades.”

Coleman: Well, let’s just hope that in general, some good comes out of this in terms of the blueprint that the emergency proclamation provides for the Legislature to pick up on and run with. 

There’s a lot of good things in there that need to be changed that, you know, that are the guideposts for change. And, Tom …

Yamachika: And I do think this is a, at bottom, it’s a grand experiment. And I’m all for, you know, proper experimentation. 

Coleman: Yeah, I commend the governor for the — it’s actually bold. And I, you know, to some extent — too bad you can’t be a dictator in this kind of a situation. 

Although, again, if you look into the particular setting up that body, which gets to approve which projects, you know, can be authorized and all of this, I think it really is — even within itself, it’s got too much red tape going on there. 

So, that’s ironic, but the sentiment is proper. Loren? 

Seehase: I think you raised an interesting point. If you watched the last Building Beyond Barriers Working Group — I believe it was August 29th in their meeting — you know, the projects that have been presented so far — and of course, it’s in only its early days — they were all government projects for affordable housing.

And the irony is that they are government agencies asking the same government agencies for permission to do their project. So, why couldn’t they have gotten it done before under the laws that were in place? 

You know, so it wasn’t that there was private parties, private developers. These aren’t individual homeowners asking, you know, to rebuild their home or remodel their home or add on.

This is government agencies asking the very same government agencies that have created that bureaucracy. So, it’s an interesting dynamic. 

Coleman: Thank you so much for being with us today, Loren. It’s really been great having you. Sorry we couldn’t have you …

Seehase: Thank you.

Coleman: In person in Hawaii. I’m sure you’d like to come back for vacation sometime.

Seehase: Absolutely. 

Coleman: Right on. Tom, last word?

Yamachika: Well, like I said, this is a grand experiment, and I do commend the governor for, you know, teeing it up and taking a swing. 

I think we need more bold moves like this to really expose what’s wrong in the system that we now have. You know, break it and then try to put it back together better.

Coleman: Right on. Thank you very much, Tom, Loren. Our listeners today, our viewers, thank you for being here today. We’ll see you next time. Aloha on “Talking Tax” here on ThinkTech Hawaii.