by Andrew Walden
Affordable housing? Hawaii has already solved this problem.
The solution is explained in Land and Power in Hawaii, Chapter 8, “Hawaii: Subdividing Lava Fields.”
In 1958 Tropic Estates bought 12,000 acres of land between Kurtistown and Mountain View in Puna from Big Island Democratic politician and businessman Robert M Yamada. The land was cut-up into 4,000 lots which were put on the market for $500 to $1000 with terms as low as $150 down and $8 a month. The project was named Hawaiian Acres. The lots sold spectacularly well.
The effect of this success was electrifying. A Big Island subdividing boom was on. For the next nine years new large-scale subdivisions were approved one after the other by Hawaii County….
… the developments unique to the Big Island were in the mold of the one in Puna that set off the boom: sizable acreage in remote areas, of little or no real economic use value, subdivided into house lots on which practically no one ever actually built homes.
Only on the Big Island was there so much empty space that had no foreseeable economic use thus nowhere else were there speculative subdivisions.
Most of the really big subdivisions of this sort were done in the vast sparsely populated southeast and southern districts of the island in Puna, Ka’u and South Kona.
By the time the Big Island boom came to a halt in the mid-1970s something like 80,000 lots of this kind had been created….
Participation by local people in the subdividing boom was remarkable. Probably one Big Island family in four put money into a lot in one of these subdivisions….35% of the lots were sold to Oahu residents.
The casual reader could be forgiven for mis-reading.
Cooper and Dawes didn’t write “Only on the Big Island was there so much empty space.” They wrote, “Only on the Big Island was there so much empty space that had no foreseeable economic use.”
The distinction matters.
There is no actual shortage of flat, buildable land on any island in Hawaii—including Oahu. Only about 5% of Hawaii land is zoned for home construction.
Supply and Demand
Fast forward 65 years, how do these 80,000 lots affect housing affordability in the Puna and Kau Districts of the Big Island?
According to Zillow, the Hawaii Statewide median single family residence is $972K. The median condo is $532K.
In Puna and Kau there are no condos. But the law of supply and demand and the ready availability of kit homes keeps the price of single family residences below one-third of the statewide median:
Since the collapse of the Japanese Bubble, Hawaii land use has been consciously restricted for the purpose of driving the cost of developable land up.
Strategic litigation by the Office of Hawaiian Affairs blocked state sales of Ceded Lands for affordable housing for 14 years.
Then, carefully timed Sierra Club lawsuits delayed Hoopili and Koa Ridge 16 years until homes could be sold on the Ewa Plan for $1M.
The policy is working exactly as planned, and it is a disaster for the middle class.
Now there are vast tracts of fallow, unused, buildable, state owned land on every island. Today, these lands have no “foreseeable economic use.” That’s why they are fallow.
Meanwhile, thousands of young families flee Hawaii every year because they are unable to buy their first home here. As a result, the majority of Native Hawaiians now live outside Hawaii. The state is literally being hollowed out.
The Hawaii Admission Act, section 5-f, mandates five purposes for the so-called ‘Ceded Lands’ including, “ the development of farm and home ownership on as widespread a basis as possible.”
Even after OHA lost, the State remains in violation of its own Admission Act.
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BACKGROUND: