‘The battle is not over’

Dr. Keli’i Akina on passing the largest tax cut in Hawaii’s state history

by Jessica Wyeth, Mackinac Center, March 7, 2025

Hawaii is home to some of the rarest creatures and environments in the country. It also boasts some of the steepest housing costs. Dr. Keli‘i Akina, president and CEO of the Grassroot Institute of Hawai‘i, discusses the institute’s work to improve the cost of living in Hawaii on The Overton Window podcast. Through collaboration and data-driven policymaking, he emphasizes the importance of working across political lines to create meaningful change.

The challenge extends beyond homeownership, affecting renters as well. “It’s becoming harder and harder for the working person who doesn’t own a home yet just to rent a place to live,” Akina says. On Oahu, home to the capital city of Honolulu, housing prices have reached levels that make ownership unrealistic for many residents. “On the main island of Oahu, the median home is about a million dollars. That’s a small three-bedroom, maybe 1,200 square foot home,” Akina says.

“The government would say the reason that housing costs so much is because of the scarcity of the land,” Akina says. Research suggests otherwise: “Hawaii doesn’t have a scarcity of land. We build housing and urban development on only 5% of the land mass.”

Another widespread belief is that outside buyers are driving up home prices. “The myth of the outside buyer is something we’ve exposed and researched,” he adds. Regulation has played a much larger role in driving up costs.

“People have started to get desperate,” Akina says. “They’re desperate because their government cannot solve the problem of providing housing. They’re desperate because this affects their ability to live in Hawaii.”

That desperation has created an opportunity for change. “People are now able to hear — even the government is able to hear — that the cause of the high price of housing in Hawaii is largely regulation by government,” Akina says.

Working in a politically challenging environment requires creative solutions. “It’s basically a one-party state,” he notes. Yet by finding ways to collaborate, policy advocates have been able to push for reforms that benefit residents.

With Hawaii’s unique climate, concerns over development often center around the environment. Increasing housing doesn’t necessitate expanding into untouched land — a focus has been placed on increasing density in existing urban areas. “Finding places where cities have popped up, where urban core has developed, and fortifying them by increasing the density is one of the more important ways of being able to increase housing supply,” Akina says.

Tax reform has also been a major focus. Last year, Grassroot helped to pass the largest tax cut in state history. “By the year 2031, Hawaii’s taxpayers will be paying $6 billion less in taxes,” Akina says. “That’s great savings, and it goes right back into the economy, and it helps consumers, and it helps businesses.”

Despite this success, there is concern about backsliding. “The battle is not over. It’s easy for the legislature to revert to a tax-and-spend mindset,” Akina says.

Proposals for new taxes and fees are already surfacing. “We played offense last year and won. Now we have to play defense and keep the gains that were made in terms of a better tax policy in Hawaii,” he says.

A commitment to collaboration remains central to this work. “‘E hana kākou’ is the Hawaiian way of saying ‘Let’s work together.’ Change comes about when parties work together on common ground. We don’t maintain distance from the other side. We talk about the other side as agents of change,” Akina says.

Hawaii’s housing and tax challenges remain significant, but recent efforts championed by the Grassroot Institute of Hawaii show that meaningful progress is possible. By continuing to build partnerships and focus on practical solutions, more residents may be able to afford to stay in the state they call home.

Listen to the full conversation on The Overton Window Podcast.