By Keli‘i Akina

Usually, when we say that “government” is responsible for the high price of housing in Hawaii, we are talking about bureaucracy: the rules, regulations, permits and barriers in general that make it difficult, time-consuming and expensive to build homes.

But there is another side to the government’s role in the housing crisis, and it consistently frustrates attempts to reduce the bureaucratic burden on housing. 

I’m talking, of course, about politics

The politics of housing includes self-advancement, election fears, special interests, land, money, government funds, property rights,  NIMBYism (“not in my backyard” objections), socio-cultural issues and economic factors.

On one level, you can sympathize with politicians who are trying to navigate this mess. There is a strong public sentiment that “something” must be done to bring down the cost of housing in Hawaii. But most practical reforms require upsetting a potentially powerful groups of voters or donors.

That is probably why attempts at fixing the housing crisis usually end up dying on the vine while efforts to scapegoat different groups for high housing prices are legislatively successful.

From the viewpoint of politicians, it doesn’t really matter if their policy “solutions” might be ineffective. It only matters that they don’t get any negative publicity or lose any votes.

The result is exactly what we have in Hawaii: a lot of talk about lowering the cost of housing, but very little effective reform.

Consider two recent county proposals: Honolulu’s Bill 10 and Maui’s Bill 107.

Bill 10 is a flawed but promising proposal that seeks to encourage housing by revising Oahu’s land-use laws. The Grassroot Institute’s testimony on Bill 10 praised its long-overdue effort to reduce regulation on accessory dwelling units and allow more housing in business districts. 

Unfortunately, Bill 10 appears to have stalled this week, a victim of the political season and the pressures of the upcoming election.

Maui’s Bill 107, on the other hand, was a poorly conceived effort to address the housing crisis by lowering the price cap on affordable homes. 

It is a basic principle of economics that price caps increase scarcity. The Grassroot Institute of Hawaii, along with homebuilders and community activists, warned that the proposal would create disincentives for housing construction, further slow the growth of housing and contribute to higher home prices. Bill 107 also included vague language about subsidies that would have an unknown effect on the county budget.

Everything about Bill 107 indicated a need for caution and further thought. Yet, it was pushed to the finish line with little time for reflection. The Maui County Council passed Bill 107 last week and Mayor Mike Victorino signed it into law just days later. Why the rush? 

Once again, the upcoming election is a likely factor.

In other words, one bill that could have made a difference in creating more housing was killed, while a bill that is certain to deepen the crisis was pushed through. And all because of politics.

So what do we do? How can we achieve real change if politicians are so easily persuaded to look for scapegoats, pass bad laws or abandon good ones?  The answer is twofold. 

First, we need to show strong grassroots support for reform. Our lawmakers need to know that the people want to see less regulation, streamlined approvals and fewer barriers to new housing. 

There are some policymakers who are willing to take a stand on housing reform regardless of the political winds, but most need to see that their constituents care about these issues and expect action.

Second, we need to hold our lawmakers accountable, not just at the ballot box, but throughout their terms. We have to remind them of their promises and speak out when these proposals come up at the Legislature or county councils. 

Politicians have a lot of different voices in their ears when it comes to addressing the housing crisis. We must ensure that the needs of ordinary Hawaii families aren’t drowned out by the chorus of political interests involved.  We must get the politics out of housing and make Hawaii more affordable for everyone.
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Keli‘i Akina is president and CEO of Grassroot Institute of Hawaii.

By Keli‘i Akina

“Do something,” goes the popular political call to action. But perhaps it would be better if politicians added a line from the medical field: “First, do no harm.”

In the case of housing, the urge to “do something” too often means expanding the role of government, which research shows is exactly the wrong medicine needed to remedy one of our most pressing issues.

According to a recent study by UHERO, the University of Hawaii Economic Research Organization, Hawaii already has the highest level of housing regulations in the country, which many other studies confirm is significant cause of our acute lack of housing and higher housing prices.

This isn’t a secret. Housing activists from all parts of the political spectrum have been telling Hawaii policymakers for years that the best way to increase homebuilding and bring down home prices is to reduce government barriers.

Nevertheless, calls to increase government involvement in housing persist. A perfect example of this flawed approach is Bill 107, approved Sept. 27 by the Maui County Council, which seeks to implement “affordable housing sales price guidelines.”

Bear in mind, of course, that in the context of housing regulations, “affordable housing” doesn’t refer to reasonable housing prices for everyone. It refers to a subset of homes that must be sold at below-market rates to residents who meet certain income requirements.

Under existing Maui law, a percentage of homes in any development over a certain size must be sold at these below-market rates. But by changing the “guidelines” of how those below-market prices are determined, Bill 107 would require homebuilders to lower the prices of their “affordable” units even further — by about 20%, or an average of about $120,000.

In testimony submitted to the Maui Council on Sept. 20, Joe Kent, executive vice president of the Grassroot Institute of Hawaii, warned that such a reduced price would disincentivize the construction of new homes — exactly the opposite of what the Council would like to achieve.

This was backed up by testimony from a representative of the Waikapū Country Town project, who said the bill would negatively affect a building project that has been in the making for more than a decade.

Despite the many reasoned arguments opposing Bill 107, the Maui County Council passed the bill by a 5-4 vote. As if the proposed “sales price guidelines” weren’t problematic enough, the bill also includes a vague subsidy program for prospective buyers that has the potential to become a budgetary albatross for decades to come.

The measure now is before Maui Mayor Mike Victorino, who has until Monday to decide whether to veto it, sign it or let it become law without his signature.

He has plenty of reasons not to let the bill become law, including that it likely will discourage new homebuilding, be a drain on the county budget and contribute to higher average home prices on Maui.

There also is the likelihood that the Council membership might change after the upcoming election, and this bill may not represent the wishes of Maui voters.

Will the mayor listen to the warnings that Bill 107 could end up doing more harm than good? No doubt it is a well-intended effort to “do something” about housing in Hawaii, but this is not the “something” that needs to be done.
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Keli‘i Akina is president and CEO of Grassroot Institute of Hawaii.