Can fixing our zoning laws make a dent in poverty?
by Keli'i Akina, Ph.D., President / CEO, Grassroot Institute of Hawaii
One of the most effective ways for lawmakers to reduce poverty in Hawaii wouldn’t cost taxpayers a dime: housing reform.
According to a new study from Pew Charitable Trusts, the state’s poverty rate would decline by 26% and its child poverty rate by 36% if housing policies led to a 20% reduction in inflation-adjusted rent.
How is this possible? Well, in states such as Hawaii that have high housing costs, residents often spend more of their income on housing. The Pew study calculated that about one-third of poverty in Hawaii — and almost 45% of child poverty — is caused by high housing costs. Lowering average rents would relieve some of that pressure, freeing up more money for other basic needs.
As for the 20% rent reduction, that figure wasn't chosen at random.
It reflects the real-world effect of housing reforms passed in Austin, Texas, and Minneapolis, Minnesota — two of several cities where lawmakers enacted policies aimed at easing regulatory barriers to housing growth, especially related to zoning and permitting. Homebuilding increased as a result, which led to overall reductions in rents and poverty.
Those outcomes align with recent research on the “filtering effect” of new housing published by the Economic Research Organization at the University of Hawai‘i, which found that a new luxury condo tower next to Ala Moana Center kicked off a chain reaction of residents moving into new units and freeing up their previous, more affordable homes across Oahu.
That means building new homes of any kind expands availability overall, creating more options at all income levels.
It might be tempting to think that rent control would quickly reduce housing costs. But before lawmakers consider that, they should know such price fixing has been shown to reduce available rental housing and increase rent prices in nearby areas where rent is not controlled.
So what could Hawaii do to reduce poverty through housing reform? Simply follow the example of cities that have already seen success: Allow higher-density homebuilding, streamline permitting, simplify building codes, eliminate parking mandates and revise restrictive land-use rules.
In short, making it easier and cheaper to build housing results in more housing being built.
Pew’s project director for housing policy, Alex Horowitz, told Honolulu Civil Beat earlier this week that the reforms Hawaii lawmakers have passed so far, such as allowing more accessory dwelling units and making it easier to convert office spaces into homes, “have made only small dents” in the state’s housing crisis.
“More steps will be needed to dig out of it,“ he said, noting that permitting and local building codes in particular still act as barriers.
Our lawmakers deserve credit for taking those “partial steps,” as Horowitz described them. After all, we must start somewhere. But as I’ve said again and again, it is time to embrace reforms that will meaningfully improve Hawaii’s housing crisis and could even help reduce poverty.
E hana kākou! (Let’s work together!)
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