Road to rebuilding Lahaina paved with obstructions

from Grassroot Institute

The road to rebuilding Lahaina in the wake of the 2023 wildfires should be paved with fewer taxes and regulations, not more, according to Keli’i Akina, president of the Grassroot Institute of Hawaii.

Commenting on Maui Mayor Richard Bissen’s plan to raise property taxes and water fees to fund the recovery effort, Akina said, “We should be going the opposite direction.”

Speaking March 28 with host Rick Hamada on KHVH News Radio 830, Akina said efforts to rebuild homes in Lahaina have been delayed by a multitude of government regulations, such as “state land use, county zoning, permitting, historic preservation, water access, and I could go on with the list. All of these factors and regulations and objections by various special interests in the public are slowing the process down.”

He said it is a “marvel” that King Kamehameha III Elementary School, destroyed by the fire, was rebuilt in less than nine months, yet government can’t seem to make any headway on building new homes. 

Akina also touched on proposals at the Legislature to allow smaller homes on smaller lots.

“If you have one lot and you can only build one home, you’re stuck,” he said. But being able to divide a property and build two homes would introduce “to the market affordable housing, affordable in the sense … that you can — get this, Rick — actually afford it.”

Akina also mentioned the recent Pacific Resource Partnership survey of Hawaii residents. 

“Probably the biggest thing that hits you between the eyes when reading it is the high cost of living is the greatest worry for 44% of our people,” Akina said. “It’s also the top reason that people cite for why they’re leaving Hawaii in droves: 52%. And affordable housing is at the top of the list of things that people just can’t afford in Hawaii.”

TRANSCRIPT

3-28-24 Keli‘i Akina with host Rick Hamada on KHVH News Radio 830

Hamada: Welcoming into the studio, it is always a pleasure, Dr. Keli’i Akina, Grassroot Institute of Hawaii. And Keli’i, always good to see you and good morning.

Akina: Good morning Rick and aloha to you and all your listeners. Great day to be in Hawaii.

Hamada: It certainly is, I think every day is, isn’t it?

Akina: Absolutely. The people, the beauty and the culture here, nowhere like it in the world.

Hamada: Perfect. In just a one-minute segment, Keli’i, Grassroot Institute of Hawaii is …

Akina: We are Hawaii’s independent think tank. If you want to know how to think about the most significant issues of our day, and you want an independent take, go to GrassrootInstitute.org. Amen.

Hamada: Amen, brother. We’re going to jump right on in, if that’s all right?

Akina: Fantastic.

Hamada: All right. Maui Mayor Richard Bissen, he announced his budget for the upcoming year. What stood out there?

Akina: Well, you know, with the wildfires and the destruction of Lahaina, any budget on the island of Maui is going to be a huge challenge. But let me give you the highlights, at least starting with the revenue. 

They’re going to raise property taxes, at least the mayor wants to do that. And that’s going to increase taxes on homeowners, second homes and short-term rentals.

If you live on Maui, your home is worth at least $1 million. So you’re gonna be in for some hefty increase. 

There’s also gonna be a higher charge for water and sewer services, especially in the aftermath of Lahaina. And $45 million is going to be tapped from the people because of the right of the county to charge GE [general excise] tax now. And the county also, however, expects to get some federal grants and state grants. 

Now on the spending side of the budget, there’s going to be a lot more spending for firefighting equipment and emergency response staff. And that makes sense in the aftermath of Lahaina.

$47 million is going to be spent — or at least promised — for affordable housing, if it’s gonna be possible to get up and running on that. 

And of course, a huge amount will go to repairing infrastructure in Lahaina.

Hamada: Oh boy, Alright … [laughter]  — This is your time. I don’t want to interject, but my goodness gracious, i — What happened on Maui is the calling card and the cover for increased regulation, taxation, when there are billions of dollars that have been infused in the name of survivors of the wildfires. I’m done. Back to you. [laughter]

Akina: Yeah, and the irony, just to pick up on what you’ve said, we should be going the opposite direction.

Hamada: Amen.

Akina: We should be taxing them less. 

Hamada: Amen. 

Akina: Taxing businesses less. Yeah. And most definitely helping the people recover economically so that they can have the self-sufficiency to rebuild their island.

Hamada: But this is a standard M.O. with government and these speeches and these etc. Oh it sounds great, we’re going to have $47 million. We never know where it comes from, accurately. 

We definitely don’t know the disbursement and the justification when in fact there are so — You mentioned federal monies, grants, fee, whatever it is. What — Why are we getting that money when you justify taxes and increases?

Akina: You also mentioned the card, the trump card, which is we have to raise money from the people, taxes, because of Lahaina and because of the wildfires. 

Actually, it should go the other way. We need to bring down the burden on people because of these emergencies.

Hamada: Well, one part of this thing is if you were to do this in the private sector, you would have to have cost centers, justifications and exactly what you justify. 

So that’s what, that’s what happens when you get away from base budgeting and you just throw any amount of money you want out there.

Akina: Rick, we’re not talking about the private sector. 

Hamada: I know we aren’t. 

Akina: We’re talking about government.

Hamada: But there is a standard of expectation that we should pursue and demand.

Akina: I love that line from the original “Ghostbusters” when the three turned to each other and say, “This is the private sector. I’ve worked here before. And they expect results.”

Hamada: Oh, I love that. I thought when you were going to mention “Ghostbusters,” I thought you were going to invoke “Dogs and cats living together. Mass hysteria.”

Akina: There you go.

Hamada: So, anyhow, more on the agenda for us today. Thank you for the update in Maui. 

King Kamehameha III Elementary opened this week. This is eight months after the fire. But correlation, why is housing itself, construction, so slow?

Akina: You know, Rick, this is a real marvel and a testament to our capacity that an entire school that had been burnt to the ground has been rebuilt on another site, but in less than nine months, on time, on budget. And this is going to be a great celebration when the students in just a few weeks march into the school.

You know, I’ve talked to some developers on the island and they’re kind of in shock because they’re saying, “Well, yes, this is how it can be done. This is how it should be done. So why isn’t it happening with regard to housing? How is it that a special project like a school can get up in less than nine months, but we can’t get housing going?”

And you know that there’s a lot going on in terms of promises about housing, but the issue is that nobody can really agree on what to do down there. The government can’t bring the voices together. 

FEMA told us that their number one site for building housing is Leilani Mauka, which is near Lahaina or mauka of Lahaina. They want to build 169 units there.

They’re also discussing whether they can build in Kaanapali. And there are plans for the state to build units near the FEMA Leilani site as well. 

So, it’s not happening though, because we’ve got state land use, county, zoning, permitting, historic preservation, water access, and I could go on the list. 

Hamada: Water trumps almost all of that. Goodness.

Akina: Absolutely. All of these factors and regulations and objections by various special interests in the public are slowing the process down. It’s really hard to find a place on the island of Maui that is zoned for housing and that has water access and that is also environmentally and culturally appropriate.

Hamada: However, Gov. [Josh] Green invoked emergency order in regard to affordable housing. By extension, housing: Are any of the provisions in his decree being applied to Maui at all to help move this process forward?

Akina: Not as much as he would have liked in the first place because there has been a great deal of objection to his pulling back on regulations, particularly with relationship to the environment and to cultural matters. But it’s a good direction, and I want to commend him for that.

Hamada: We’re talking with Dr. Keli’i Akina, Grassroot Institute of Hawaii, and bringing this up to speed on very important issues that we’re facing today. 

This “accessory dwelling” bill has been in the news a lot lately. Grassroot supports it. Can you share why?

Akina: Well, fundamentally, there’s a principle called property rights. If you own a piece of property, so long as you’re not harming people around you, you have the right in America — and I think the last time I checked, we are still in the United States of America —

Hamada: 50th?

Akina: That’s right. You’ve got the right to build on it. You’ve got the right to do what you want to it. But our laws currently make it virtually impossible to build small homes on small lots. And the consequence is that they’re not available for people who need to buy them, who can’t afford to plop down $1 million to buy their first starter home.

So here’s an easy solution: Look at the fact that three-fourths of the cost of a home is the land underneath it. So if you have one lot and you can only build one home, you’re stuck. But if you can use that one lot and divide it in two and build two homes, that’s a huge cost savings. And that introduces to the market affordable housing, affordable in the sense — not that people have to make certain income requirements — but affordable in the sense that you can — get this, Rick — actually afford it.

And these units called accessory dwelling units can be used for grandma and grandpa, or a child, or a renter if you need income. 

So that’s what we’re supporting. It makes common sense. It’ll also allow people who have ADUs already and enough space to put another ADU on their property. 

This has been done in cities across the world, and it has resulted in being able to add a good amount of inventory to help solve the problem of a lack of housing.

 It’s a good bill, and there are a lot of legislators who stand for it. 

Unfortunately, it’s come up against a lot of criticism that’s based on misinformation about it. And so I would just encourage your listeners to get ahold of their legislators, if they’re interested in seeing this go through.

Hamada: There is in all policies, proposals, specificities and that would include lot sizes. The fact that ADUs have been on the agenda here at home for a decade — I remember going to the first model unit over at the Mission Houses where it was on display. There was no disagreement. They came in two models, prefab, 400, 800 square feet. Very self-sufficient.

Two things. One, water and sewage. There was resistance. There was not enough capacity to construct in virtually every area.

Secondarily, requirements for parking. With each ADU, you had to have accessible parking, one per unit. That negated because of land availability.

So, ADUs, 100% supportive. Get rid of the restrictions so the property rights of the owner can be utilized. 

The monster home analogy, I don’t buy it. However, the NIMBYism of “You can change the complexion of our neighborhood,” well, you know what, maybe it needs a complexion change so we can utilize existing land and house people that need housing, usually within our own families, and as you mentioned, a revenue generator.

Akina: That’s right. No solution, Rick, is going to be perfect. And it’s going to require citizens to understand that there has to be a balance between values that we hold — preserving nature and the beauty and peace of Hawaii, which is one — and yet providing homes for our children and others so that they don’t have to leave the islands as they are right now, constituting Hawaii’s leading export: its people.

Hamada: Amen. Dr. Keli’i Akina in our studio, Grassroot Institute of Hawaii.

I host Pacific Resource Partnership, “The PRP Hour,” 7 a.m. Fridays. Tomorrow’s another program. “Hawaii Perspectives” was issued recently for the last quarter of last year. Have you had a chance to review? If so, your thoughts?

Akina: Well, Rick, one of my favorite things about PRP is their annual survey. It provides very valuable information for any business or actually any individual here in Hawaii, and I would encourage people to get a hold of that PRP report. 

The one that has come out, we’re especially pleased with at the Grassroot Institute because it confirms a lot of things that we have been saying.

Probably the biggest thing that hits you between the eyes when reading it is the high cost of living is the greatest worry for 44% of our people. 

It’s also the top reason that people cite for why they’re leaving Hawaii in droves: 52%. 

And affordable housing is at the top of the list of things that people just can’t afford in Hawaii.

Twenty percent of our people who are living here right now say that they’d consider leaving because of the housing crisis. That’s huge, and that number has been growing. 

People are also concerned about the cost of energy, which is ironic because we’re in the midst of a campaign by our state to bring down costs through green energy. But 78% of those surveys said they didn’t want to pay higher electric bills to advance the goal of being 100% renewable.

So that’s basically a highlight of the report, but there’s much more in there.

Hamada: Amen. We’re at 8:57. 

Before we go, Keli’i, the governor made a presentation yesterday, and I’d like to get your take into short-term leasing and vacation rent and all of that because it was on the table and he made a decision yesterday.

Akina: Well, we’ll start with short-term vacation rental. The governor’s had a love-hate relationship with that, alternating in his speeches and proclamations between condemning and praising them. 

And yet I want to be sympathetic here. The governor has a tough job to do, and he’s trying his very best to see that people who don’t have housing, especially those who’ve been displaced on the island of Maui, get housing.

But he announced basically that he is not banning short-term rentals, which is good news to those who operate short-term rentals and those who believe that some people have the freedom to do that. 

A couple of points. Number one, he’s using a carrot approach rather than a stick, and I commend that. Rather than punishing owners of short-term vacation rentals, he’s offering them incentives. That’s a much better route. I don’t think government really should be in the business of doing that, but it is a better route than threatening with the stick. 

Secondly, he’s shifted the focus away from all short-term vacation rentals and has said that instead the government will be going after illegal short-term vacation rentals. That’s an important distinction because it allows room in the market for that.

Other things that he said are valuable — Lahaina should be seeing people move back in this year, but we don’t know how quickly Maui itself will be able to do the permitting there. 

And I like the fact that he pointed out that the biggest problem in rebuilding on Maui is water.

Hamada: Agua. We’ll get into more conversation. I’ll just say this: You established a point that dealt with property rights when it comes to the utilization of your property, if it is for revenue generation or share renting, etc. You retain those property rights, and in my humble view.

Dr. Keli’i Akina, we’re right up against our mark. I want to thank you for today as always. 

Akina: Rick, aloha to you and all of your listeners.