Living in the Fourth-Most Economically Repressive State

by Randall O'Toole, AntiPlanner

According to the index of economic freedom, only California (of course), New Jersey, and New York are more repressive than Hawaii. Much of Hawaii’s (and California’s) repression comes from the land-use regulation, which makes building a home or starting or expanding a business very expensive.

The Antiplanner has told this story before, but briefly, most of Hawaii’s land is controlled by a few corporations and families. For the first half of the 20th century, these landowners argued that they could not sell their land for homes or other uses because it was too valuable as farms. They sometimes leased land to people who built houses on it, but people could lose their right to use the land at any time.

In 1954, the Democrats took control of the state legislature promising land reform, such as by taking land from the large landowners by eminent domain and selling to more people or at least forcing the landowners to sell land to leaseholders. Instead of keeping that promise, when they took office, the Democrats joined with the large landowners so that anyone who wanted to develop land had to make key members of the legislature one of their partners.

To support this system, starting in 1961 the Democrats passed the nation’s most restrictive land-use laws, effectively prohibiting any developments unless the developer greased the wheels by making some politician a partner. They justified this on the need to save agricultural lands–exactly the same excuse that the landowners made.

More recently, Hawaii Senator Daniel Akaka proposed a bill that would effectively give some federal lands in the state to Hawaiian natives, in the same way that Native Americans have reservations. This would be fine if individuals would be allowed to own and sell their land, but instead the land will be managed for the natives by the federal or state governments. In essence, the bill assumes that natives are too stupid to make their own decisions.

Bills and laws like the Akaka bill would do little other than to keep the natives poor and prevent Hawaii from developing. Fortunately, the bill did not pass, but it shows that Hawaii Democrats remain ignorant of the benefits of and need for protecting peoples’ property rights.

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