‘Hasn’t been a lot of interest’ in governor’s housing proclamations

by Mark Coleman, Grassroot Institute, January 20, 2024

Gov. Josh Green’s effort to address Hawaii’s housing shortage through a succession of emergency orders that suspended various regulatory barriers has amounted to “just a temporary workaround” with not much yet to show for it, according to Grassroot Institute of Hawaii research associate Andrew Luff.

“Despite all the controversy and lawsuits around these [orders], the impact hasn’t been that large,” Luff told Grassroot President Keliʻi Akina on the Jan. 15 episode of “Hawaii Together” on ThinkTech Hawaii. 

“In fact,” he said, “the proclamations have only been used once [since the first of them was issued in July 2023], and that was to waive school impact fees for an office to housing conversion at 1060 Bishop St. So I think that kind of speaks for itself. So far, there hasn’t been a lot of interest.”

Luff told Akina that he would characterize Hawaii’s housing policy as “discordant,” with some agencies trying to build housing and others making it difficult to do so.

“A large part of the problem,” he said, “is the complicated regulatory system, but no one has really addressed that yet in its entirety. The most we’ve seen is kind of limited exceptions for certain types of projects, and I think that in their current form, Gov. Green’s emergency orders are a continuation of that.”

Luff said the long list of laws waived by the governor’s initial proclamation — specifically eight entire chapters and 32 individual sections of the Hawaii Revised Statutes — “speaks to how large of a problem there is.”

Several of those laws — ones that relate to historic preservation, the sunshine law, the state Land Use Commission and environmental impact statements, he said — have since been reinstated due to controversy.   

Laws that remain suspended, Luff explained, relate to school impact fees, which he said increase project costs; civil service laws, which he said largely prevent the government from hiring private contractors; and county zoning policies, which he said restrict multi-family housing and are based on unpredictable discretionary approvals.

Luff recommended implementing permanent changes instead, such as by-right permitting approvals, removing redundancies related to the state Land Use Commission and improving efficiency by updating civil service laws.

“We’ve tried lots of temporary measures to solve this problem,” he said. “But I think it’s time for some more permanent measures as well.” 

TRANSCRIPT

1-15-24 Andrew Luff with Kelii Akina on “Hawaii Together

Keli‘i Akina: Aloha, and welcome to “Hawaii Together” on ThinkTech Hawaii. I’m your host, Keli’i Akina, president of the Grassroot Institute of Hawaii. 

This week marks one year since Gov. Josh Green announced his first emergency order intended to speed up the construction of kauhale for the homeless, or houseless.

It also marks six months since the governor signed his first emergency order waiving many land-use, zoning and environmental laws to foster more home building. Since then, he’s updated that order three times and says that he intends to continue the state of housing emergency for up to a year. 

So, my question today is: How have these regulatory waivers worked out? And that’s the topic for our program today. 

My guest is Andrew Luff. He goes by Drew for short. He’s a research associate at the Grassroot Institute of Hawaii and a policy fellow at Housing Hawaii’s Future. Perhaps most impressive is that Drew is still in high school. 

He came to my attention when I was reading the [Honolulu] Star-Advertiser and saw his op-ed, which the newspaper had published. Drew is a junior at Radford High School, where he’s developed his research and writing skills at the school’s newspaper, The Rampage. 

Welcome, Drew. Thanks for joining us on the program today. 

Andrew Luff: [No audio]

Akina: Well, we’re so glad that you’re here. And I just want to ask you a few questions about an area in which you have become a bit of an expert so far. And you’re helping us to do research in that area. 

What got you interested in housing policy here in the state of Hawaii?

Luff: Yeah, so my dad is in the military, so we moved here in June 2022. And it’s one of the first things we noticed when we came here, was like how expensive everything was, especially housing in Hawaii. 

And that really made me wonder like why it was so expensive. And then, like, seeing all like the homeless people made me wonder, like, what could be done to solve the problem.

Akina: Now from your research, how would you characterize Hawaii’s housing policy?

Luff: Yeah. So right now, Hawaii’s housing policy, I would say, is kind of discordant. You have, like, some agencies trying to build housing, and then you have others that are making that very difficult. 

So, it’s been clear, though, for a while, that a large part of the problem is the complicated regulatory system. But no one has really addressed that yet in its entirety. 

The most we’ve seen is kind of limited exceptions for certain types of projects. And I think that in their current form, Gov. Green’s emergency orders are a continuation of that.

Akina: Well, let’s talk a little bit about some of the things Gov. Green is doing. You’ve been doing a lot of research on his emergency orders, which have waived various laws to speed up the construction of shelters for the homeless and housing in general. 

Could you summarize a little bit of these laws that these emergency decrees are trying to address?

Luff: Yeah. So, there are a lot of laws in these proclamations, and I think that speaks to how large of a problem there is. So, his original proclamation on housing waived eight entire chapters and then 32 individual sections of the Hawaii Revised Statutes. 

I’m not going to talk about all of those, but I can tell you about a few real quick. So, Chapter 6E was one of the more controversial, and that was — that relates to historic preservation and preservation of iwi kupuna [ancestral bones]. 

And then Chapter 46, which relates to county organization, including zoning, which is very important. And then there are three chapters: Chapter 76, Chapter 89, Chapter 89C, which all are related to the civil service. 

Chapter 92, that’s another controversial one. And that’s the “sunshine law,” so like, all the practices of how the government has to be transparent. Sections 3.1 and 4A of Chapter 205 — those relate to the State Land Use Commission, which is like a statewide zoning board, basically. So those, that was controversial too. 

And then, Sections 1601 through 1612, those deal with school impact fees, which are another hurdle. And another controversial one was Chapter 343, which deals with environmental impact statements.

Akina: Andrew, there is certainly a wide array of laws that are addressed by the governor’s emergency decrees. And he’s had to revise his order a couple of times for various reasons, mainly in response to legal challenges.

Can you let us know which laws are still suspended, and which got removed from the orders?

Luff: Yes. So, the ones that are still suspended are the laws dealing with county organization and zoning, the civil service laws and school impact fees — those are all still suspended. 

But the ones that have been restored and are not in the proclamation anymore are the ones relating to historic preservation, the “sunshine” law, the Land Use Commission and environmental impact statements.

Akina: Well, let’s talk about some of those — about these laws, which were removed from the order — why do you think the governor backtracked on these?

Luff: Yeah. So, I think this was largely to avoid a court challenge because these were all laws that were specifically listed in the Earthjustice lawsuit that has since been withdrawn.

Akina: So, it was a measure of public activism that made the difference in these cases?

Luff: [No audio] Yes.

Akina: OK, so about the laws that are still suspended. For example, the state’s civil service law. What was the reason for suspending that?

Luff: Yeah. So, the reason to suspend that was some of the counties wanted to hire third-party reviewers for building permits because it takes a very long time to get a building permit in Hawaii. 

So when the Hawaii Housing Factbook came out this June, it took — the median time was 153 days in Honolulu County; 174 days in Maui; 182 days in Kauai; and if you’re on the Big Island in Hawaii County, it takes 458 days to get a building permit.

And the reason they’re not normally allowed to use third-party reviewers is the state Supreme Court has interpreted Chapter 76 to mean that any job that has been done by a civil servant cannot be privatized. 

So — and the reason they’re unable to fill these positions is the hiring process is much longer than in the private sector. It can take up to six months to hire civil servants, and this discourages a lot of applicants from applying.

Akina: Well, this certainly creates a challenge to accomplish the goals that the governor has set out to do. 

What about the state’s mandated school impact fees? You’ve looked at that, haven’t you? And how do these fees work? Why were they suspended?

Luff: Yeah. So, the way school impact fees work is that they are charged to homebuilders that build homes in a school impact district. The purpose of them is to raise money to build schools in like, growing areas. 

But these fees, they vary by district — they’re all several thousand dollars per unit, though. And this will add up, especially if you have a larger building. 

And they’re kind of not ideal because they, in effect, punish people that build housing. And while the intent was they would be paid by the developers, in reality, they get passed on to the renters or buyers of the housing.

Akina: Andrew, do you have any further comments on the other laws that remain suspended?

Luff: Yeah. So, I guess the last one I wanted to talk about was Chapter 46, which deals with the counties. And it’s especially important because it deals with zoning. 

So, in Hawaii about 4% of our total land is zoned for housing. And of that, only 7.5% is zoned for housing, multi-family housing. So what this means is that of the total land, 0.3% is then for multi-family housing, which is more affordable, and this creates high land costs for that teensy bit of lands where you can build. 

Multi-family housing and rezoning land is very difficult right now. You have to go all the way to the county council to get it rezoned. And it’s a discretionary approval, which means that they use their personal judgment. So, it’s kind of unpredictable too, then, and it makes it harder. 

So, what would be a better solution would be by-right [zoning]. So what that means is instead of using their personal judgment, you would have set criteria, where if the project meets the criteria — such as, like, infrastructure needs or whatnot — it can be, it must be approved to be rezoned.

And what this would do is it would make costs lower by increasing the predictability for homebuilders. And it would make it easier for them to respond to the market demands.

Akina: Well, Andrew, you have certainly summed up a very complex issue and have said some things that a lot of folks — even our public officials — are not fully cognizant of. 

You’ve talked about what kind of caps the supply of land here in Hawaii — having a zoning of only 4% in our state available for housing — and the process [of having] even that small amount developed. 

Now, when you look at everything that you have studied in terms of the governor’s emergency orders, how would you characterize the results of the emergency housing orders so far? Have they been successful? Or are they on the track towards success?

Luff: So, despite all the controversy and lawsuits around these, the impact hasn’t been that large. In fact, the proclamations have only been used once. And that was to waive school impact fees for an office to housing conversion at 1060 Bishop Street. 

So, I think that kind of speaks for itself. So far, there hasn’t been a lot of interest, I guess, in this. 

And I think probably the reasons why is that people might be a little hesitant to use this because, for example, in the Earthjustice lawsuit — if that was to be successful — they wanted all of the exemptions to be undone, if they were successful. So that creates some uncertainty there. 

And then, there’s already many avenues for specifically affordable housing to go through the pipeline, so it doesn’t change that much. It’s really just replacing one set of discretionary approvals with another. 

And they only have one year to take advantage of this, and that’s really not that much time for how much housing we need.

Akina: Certainly that impact has not been very widespread. 

Now, what about the individual home builder who may want to get an exemption approved under the emergency order and build — how would that homebuilder go about doing that?

Luff: Yeah. So this might explain why the take up has been a little slow. 

So, first of all, his affordable housing proclamation — so the second, third and fourth ones after his original one — now your project must be defined as affordable housing. 

So, if it’s not for 0%-140% of the area median income, it doesn’t qualify anymore. So you need to qualify. 

And then the Build Beyond Barriers Working Group needs to determine that you have the necessary skill and resources to complete the project, and you must be able to commence forth within 36 months. 

And then, if you meet those, you have to submit a pretty comprehensive application to the working group. And you still have to get public input. And then there’s also some new challenges, like you must pay prevailing wages if you use any of the exemptions.

Akina: It sounds as though there’s still a lot of complexity to the process. 

You mentioned the Build Beyond Barriers Group. Do you have any thoughts about how well that has worked out?

Luff: Yeah. So it sounds like many people, even in the group, were hoping it would be more efficient. Like, I think I read it took them 30 minutes to approve a single exemption — and that was the same one I discussed earlier, the office conversion. 

So, it still seems like they’re taking a long amount of time to do these things. So, it’s really just a temporary workaround. But [what] we would like to see is probably more by-right approvals.

Akina: Now, overall, would you say the governor’s emergency order serves as a blueprint for lawmakers who want to make permanent reforms? 

Given, of course, that the emergency reforms are short-term; there’s only so long that the emergency can remain in effect. 

But what about long-term solutions? Can legislators take a look at what the governor is suggesting in his emergency orders and work toward permanent changes in our regulatory climate?

Luff: Yeah. I think the laws that get suspended by the proclamation — if you look at those — I think legislators will find reasons why most of them should be reformed. 

But of course, a lot of the solutions in the proclamation are temporary and would probably not be the best way to move forward with a permanent solution.

Akina: In terms of the balance of powers — and you’ve studied the Constitution, where we have three branches of government: the Executive, the Legislative and the Judiciary, and they keep each other in check. 

So, in terms of the balance of powers, do you think emergency orders are the best way to proceed in terms of dealing with the kind of situation we have with regard to housing?

Luff: No, I think we’ve seen the limitations of this approach. Definitely, we’ve seen that it’s vulnerable to, like, lawsuits and it’s not ideal now. 

I think what we would like to see is the Legislature really take this up in the next session and try to figure out some more permanent reforms.

Akina: Well, Andrew, it’s just been remarkable listening to your depth of knowledge on this subject. 

And I’m all the more impressed by the fact that you’re still completing your high school education, and have much further education and a career path ahead of you and so forth. 

And there are many, many activities you could be engaged in at this time. I don’t know how many high school students are engaged in public policy in the way you are. 

And I just wanted to ask you, what draws you to working with groups like our organization, the Grassroot Institute of Hawaii, and also Housing Hawaii’s Future?

Luff: Yeah. So, I’ve always been a little interested in these sorts of things. Like when I was little, I would draw maps of cities on, like, a paper tablecloth, or play a game where I’d pretend to be, like, a president of some sort. 

But I think it’s a very good opportunity to try to leave Hawaii better than I found it, and try to make it a place where the next generation can have a chance to realize their potential.

Akina: Well, it’s great work that you’re doing, and I appreciate the things you’re volunteering at. 

For example, a friend of ours is Sterling Higa, the director — you know — of Housing Hawai‘i’s Future. You worked with him to co-author a brief for Housing Hawaii’s Future, relating to parking minimums — the requirements for the amount of parking that would be necessary to get a permit for a building project. 

Could you explain a little bit of what that’s all about?

Luff: Yeah. So, like you said, a parking minimum is the minimum number of off-street parking spaces that a development must provide for it to be within the code. 

And often what happens is parking minimums require homebuilders and communities to build more parking than they need. And this comes, of course, at the expense of housing. 

So, parking is very expensive, especially in Hawaii. So, in urban Honolulu, a single spot in, like, a podium parking garage is around $42,000 to build — and you have to maintain it after that too. And even a surface parking spot on Oahu is around $22,000 to build, so — including the cost of land too, in there. So, it’s not cheap, and it’s using resources that could have been used for housing. 

So, what you will also see parking minimums do is discourage smaller units because — and developments — because proportionately, more parking must be provided for these smaller units compared to their size. And that doesn’t really pencil out very often for developers, so you don’t see these kinds of things get built without exemptions. 

So, parking minimums also will harm lower income people, the environment and walkability. So, if Hawaii policymakers want to make housing cheaper and get improvement in these areas, they should look at removing parking minimums.

Akina: This whole issue of housing policy, I take it, is not just a dispassionate debate topic for you. But it’s something that, probably, you’ve thought of will affect your own future and the future of your peers in school at this time here in the state of Hawaii. 

Have you talked to others? What do individuals in your generation think about their prospects to be able to start a career in Hawaii, and be able to afford a home in Hawaii and so forth?

Luff: Yeah. So unfortunately, some of my friends have decided that they’re not going to start their career in Hawaii, and the high cost of housing is a big influence on that decision.

Some of my other friends — they do want to stay, but they know that housing and the high cost of living will be a struggle for them. And I think we’re losing some very smart and talented people this way.

Akina: Is there a lack of hope? What is the mood of your friends? What are their thoughts about the prospects of an improved Hawaii, in terms of housing costs and career opportunities?

Luff: Yeah, so my one friend said he had given up hope. But the rest of them are cautiously optimistic, I guess. They believe that it can be done — that Hawaii can make housing more affordable — but they know it will not be easy, and it will take everyone working together.

Akina: Andrew, if you were one day — some day — governor, or in a position to influence the Legislature, what would you do for Hawaii in terms of its housing needs?

Luff: Yeah. So I would try to make the process easier for all developments, mainly by using by-right approvals so that it would create more consistency and predictability in the system. 

And I think there’s lots of places where we can remove redundancy — such as with the State Land Use Commission — or inexpensively make the system faster by, like, changing the civil service laws to make it easier to hire people. 

So, I think it’ll just take a lot of small changes. But it’ll take some permanent changes as well. We’ve tried lots of temporary measures to solve this problem, but I think it’s time for some more permanent measures as well. 

Akina: Well, very well put. It’s been a delight talking with you, Andrew, and I appreciate your service to the community and look forward to seeing all the great things that will happen in terms of your further education and career. And thank you for working with the Grassroot Institute. 

Luff: Thank you for having me. 

Akina: Well, everyone, I hope you’re as impressed as I am with our guest today. Andrew Luff is a student at Radford High School, deeply concerned about the community here in Hawaii and doing something about that right now. 

I’m looking forward to seeing what will happen in his future. Not just in his life, but in terms of what we talked about today: the cost of living and quality of life here in Hawaii — a state from which many are fleeing right now to find places across the mainland with lower cost of living and more opportunities. We’re fighting to correct that trend so that people, if they choose, can stay in Hawaii. 

And I want to thank you very much for tuning in today, and we’ll talk with you again next time we’re here on ThinkTech Hawaii’s “Hawaii Together.” Until then, I’m Keliʻi Akina with the Grassroot Institute, wishing you aloha.