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    The “Rail Skim” Suit: We Lost the Battle, Taxpayers Won the War

    A long time ago, in October 2015 to be more precise, the Tax Foundation of Hawaii sued the State.  Why?  Because at the time, the State was skimming 10 cents off every dollar that was being collected for rail, and it plopped the money into the state’s general fund, where it was spent on everything but rail.  Its justification for pocketing the money was that there were various costs associated with administering and collecting the rail tax, and those needed to be reimbursed.

    But the State was hauling in $25 million a year – a sum comparable in size to the entire budget of the state Department of Taxation.  We thought the State was not only reimbursing itself, but was making a killing in the process, all at the expense of Oahu taxpayers.

    When we initially filed our complaint, the State’s response was more about “jurisdiction” and “standing” rather than the meat of the dispute.  In other words, they were saying, “And what right do you pipsqueaks have to be telling we the State how we should be spending our money?  If anyone has a complaint, it should be the City government and not you runts.”

    Our response was simple.  Governments don’t pay taxes; taxpayers pay taxes.  If taxpayer dollars are skimmed from rail, fewer dollars are available to build rail.  To build the train, the City would then have to tax Honolulu taxpayers for a longer period.  And indeed, the City got the Legislature to move the sunset date of the surcharge from 2022 to 2027 to 2030.

    The Circuit Court tossed out the case.  It reasoned that if the Foundation wasn’t seeking a tax refund (we weren’t), then the Foundation would be seeking a “declaratory judgment” which, under statute, cannot be obtained in tax cases; game over.

    We appealed.

    On March 21, the Supreme Court of Hawaii released three opinions, totaling 125 pages, saying that the Foundation loses.

    The great bulk of all three opinions addressed the issue of standing.  They reviewed the tortuous history of attempts by many nonprofit groups, from Life of the Land to Hawaii Insurers Council to Hawaii’s Thousand Friends, to get the courts to act in cases where they thought governmental power was being misused or abused.  Rules were made, rules were bent, and rules were bent some more, depending on which version of the history you found more persuasive.  Ultimately, four of the five Justices concluded that the Foundation did have standing.  This means that we, or similar taxpayers, who feel that our tax dollars are being distributed unlawfully can go to the courts to get something done about it.

    The merits of the suit are only addressed in the last ten pages of the principal opinion.  There, four Justices were satisfied that the Legislature didn’t cross the line when it enacted the 10% skim.  There would be “costs of assessment, collection, disposition, and oversight” of the new tax, people had no idea how extensive these costs would be; so 10% was a reasonable estimate.  Also, it wasn’t discriminatory as compared with the other counties because if any of the other counties enacted a surcharge, they would have been skimmed as well.  Game over.

    We, of course, didn’t think the estimate was reasonable at all.  How could the costs for assessing, collecting, and overseeing a mere 3% of the total revenues taken in by the tax system be around 100% of the costs to run the whole Department of Taxation?

    In the end, however, we need to focus on the real issue, namely The Skim.  What happened to that law that allowed the state to skim 10% of the county’s surcharge?

    In the 2017 special session, the Legislature slashed the skim from 10% to 1%.  It snipped out one zero, and the result was a huge victory for taxpayers.  Would they have done it without the Foundation’s lawsuit hanging over their heads?  We doubt it; the law contains an explicit reference to our lawsuit, so it’s clear that lawmakers were very much aware of it.

    The Foundation may have lost the court battle.  But all of us won the war.

    Finally, Someone Serious Has Said the Word: Treason

    Today, sensationalistic rhetoric is cheap in American politics. There isn’t a day that goes by when the most outrageous words are used in completely opportunistic ways in attempts to hobble the political opposition. Just last week House Speaker Nancy Pelosi (P-CA), called for President Trump’s family and inner-circle to execute an “intervention”, a term used for interceding with drug addicts and alcoholics. And as sensationalistic as that sounds, other than feeding the Leftist mainstream media with ammunition to attract advertisers, the country yawned.

    So, when someone actually calls out actions that are severe, criminal, and/or otherwise dangerous to the well-being of the nation it gets drowned out in the din of the disingenuous.

    Such is the case with the very real and very serious observation leveled by US Rep. Liz Cheney (R-WY). In an interview with ABC News’ This Week Cheney said:

    “I think what is really crucially important to remember here is that you had Strzok and Page who were in charge of launching this investigation and they were saying things like, ‘We must stop this president, we need an insurance policy against this president…In my view when you have people that are in the highest echelons of the law enforcement of this nation saying things like that, that sounds an awful lot like a coup – and it could well be treason and I think we need to know more.” (Emphasis mine)

    Webster’s defines treason as:

    “[T]he offense of attempting by overt acts to overthrow the government of the state to which the offender owes allegiance or to kill or personally injure the sovereign or the sovereign’s family.”

    It can be successfully argued, as Rep. Cheney did in a cursory manner, that Strzok and Page – along with anyone else who was aware of or aided the process by which their intentions would become a reality – did commit an act of treason. While their actions before Mr. Trump’s inauguration do not apply, the Watergate-like cover-up to which they were integrally a part in the time since Mr. Trump became President certainly do apply.

    The statements, “We must stop this president” and “We need an insurance policy against this president”, coupled with their willing use of information they knew to be false and/or created to effect an adverse political effect against a sitting President more than self-implicate in an act of treason. While no assassination was contemplated, the illegitimate removal of a duly elected President of the United States was attempted. This is the very definition of treason.

    18 US Code § 2381 reads:

    “Whoever, owing allegiance to the United States, levies war against them or adheres to their enemies, giving them aid and comfort within the United States or elsewhere, is guilty of treason and shall suffer death, or shall be imprisoned not less than five years and fined under this title but not less than $10,000; and shall be incapable of holding any office under the United States.” (Emphasis mine)

    Trying to overturn the election of a President not only disenfranchises the American people of the Constitutional right to elect their leader, it “adheres to their enemies.”

    It wasn’t too long ago (just before the George W. Bush Administration) that words like “liar”, “Nazi”, “racist”, “xenophobe”, “impeachment”, etc. were rarely used. The very use of these words was reserved for very serious circumstances with very real implications. Thanks to the ginned-up fake-outrage facilitated by the leaders of the Progressive-Fascist movement here in the United States, the electorate has become numb to these words, even when they apply to a crime such as treason executed at the hand of those sworn to guard against it. Let us all hope that Rep. Cheney’s words rise above the din of the mainstream media’s sensationalistic disingenuousness. The crimes that the Progressive-Fascists hope you do not pay attention to are real, and they must be investigated and punished.

    Comey, Brennan & Crew: How Is This Different Than Watergate?

    With President Trump ordering intelligence entities in every agency and department to fully cooperate with Attorney General Barr – and for Barr to declassify all relevant documentation regarding any clandestine information gathering and surveillance of politicos pursuant to law during the 2016 General Election, we have to ask some serious questions whose answers must transcend politics.

    How is what the Obama Era FBI and DoJ executed during the 2016 Election – the illegal gathering of information against Americans for political purposes – any different than the crimes committed during Watergate; an event that brought down a presidency?

    The illegal activities executed during Watergate included the bugging of the offices of political opponents and people of whom then-President Nixon and members of his inner-circle were suspicious. They illegally used the FBI, CIA, and IRS as political weapons.

    Evidence is pointing to proof that during the 2016 General Election a select handful of Obama and Clinton loyalists (read: Progressive-Fascists) abused the intelligence and legal apparatuses to both manufacture false information and use it to fraudulently acquire FISA warrants to affect a political outcome.

    Both of these events are crimes. Both of these events have to do with illegally using government law enforcement, judicial, intelligence, and information gathering agencies and/or departments to gather information to favor a political person or movement; to illegally affect the outcome of an election.

    In 1974, Democrats screamed about the disenfranchisement of the American people in the electoral process by nefarious forces in the Nixon Administration – and the President himself – and burned the question “What did the President know and when did he know it?” into American History.

    Today, in the ominous shadow of a crime equal to or greater than those committed during Watergate, Democrats are not only seeking to overlook crimes; they are seeking to validate the attempted disenfranchisement of the American people. In any other matter that would reach a court in the United States, their actions would be tantamount to aiding and abetting a federal crime.

    Again, Democrats have done zero governing since President Trump was elected. Everything they have done has been for the benefit of their political party.

    It’s time to put government before politics. It is also time to punish those who do not.

    Gut-n-Replace 2019

    This week we’ll discuss a couple of examples from this legislative session of the controversial but commonly used technique called “Gut and Replace” where a bill is amended so much that it looks nothing like its former self.

    Senate Bill (SB) 162, as originally introduced, would have provided tax credits for hiring elderly people

    In late February, the Departments of Taxation and Transportation (DOT and DOTAX) came to key legislators with a problem.  In 2018, a law was enacted to raise the special tax on car rentals from $3 to $5 – but only for those who couldn’t produce a Hawaii drivers’ license.  The car rental companies opposed the bill then, citing constitutional concerns, but legislators pooh-poohed the objections after a deputy attorney general concluded that the bill was okay.  In the beginning of 2019, however, some of the car rental companies came back in with a new analysis concluding that the law’s discrimination against nonresidents was prohibited by a part of the U.S. Constitution that the deputy attorney general didn’t consider.  “Oops,” the deputy said.  “I think these guys may have a point.”

    DOT was greatly concerned because the car rental company threatened to sue to invalidate the tax.  Revenue from the tax normally goes to the Highway Fund, which DOT uses to fix roads and bridges.  Interruption of revenue to that fund would put DOT in a bind.  The discrimination could be solved by making the tax on locals and visitors equal.  So, DOT’s fix was for everyone to pay $5 a day.  That solution would, however, require a bill to be passed and signed into law.

    Eyes then fell upon SB 162.  Now, once a bill is introduced, its title can’t be changed, and its contents need to be consistent with the title.  There were several bills floating around that would allow a tax credit for hiring the elderly, so no one would miss this one. It was titled “Relating to Taxation,” meaning that it could appropriately contain the language to fix the rental vehicle tax.

    On March 1, Senate Ways & Means published a hearing notice for the bill along with a proposed Senate draft that would trash the language currently in the bill and change it to fix the rental motor vehicle tax.  The bill passed out of Ways & Means in a form close to the proposed draft, but at least people had a chance to, and did, testify on the language in the proposed draft.  When the bill crossed over to the House, public hearings were held and only a few minor changes were made.  The Senate disagreed to those changes, and a conference committee was appointed.  The committee made another minor amendment to the bill, and the bill is now on the Governor’s desk for consideration.

    Contrast this with the saga of SB 1405, which, as it was moving through committees of both houses, would have made it a crime for unlicensed people to ship e‑liquid products (used for “vaping”), increased tobacco wholesaler or dealer license fees and retail permit fees, and hiked administrative fines and criminal penalties for electronic smoking devices by persons under 21.  The bill that came out of Conference Committee requires educators to confiscate e-cigarettes found on school kids, provides a safe harbor for disposal of e-cigarettes, and increases fines and criminal penalties on underage smoking.  The final version of this bill is not completely unrelated to the prior versions, unlike SB 162, but there was no opportunity for public input at all on the final version of SB 1405.

    Now here is the question for you to consider as a taxpayer and citizen.  The system our constitution sets up for bills to become law requires opportunity for public comment. Although both of these bills technically comply with the rules, they are “gut-and-replace” bills because the final version and the version as introduced embody entirely different concepts.  Was there a meaningful chance for the public to comment on the ideas in the bills before they were shipped off to the Governor?  And if not, should either or both bills be invalidated as a result?

    (Disclosure:  The author represents some of the car rental companies.)

    808 Viral Still Going Strong

    808 Viral is an Hawaii entertainment media page started in 2015, that creates and shares funny and engaging Hawaii content by Hawaii actors, story tellers and comedians. Over the years it has produced some of Hawaii’s most recognizable social media influencers and viral videos. It has amassed a following of over 1.5 million followers across all platforms.

    “Last month we reached 60 million in one month. That was just Facebook and just one page. We have a network of pages now. All niches.” said Daniela Stolfi-Tow — 808 Viral Managing Director. “The power of our network still blows my mind and we all work really hard to be careful what we post. We are completely aware of the responsibility we have.”

    To follow 808 Viral go to: www.facebook.com/808viral and on Instagram: https://instagram.com/808viral

    A Threat to Judicial Independence

    When we learn about our three branches of government, we’re usually told that the legislative branch makes the laws, the executive branch carries them out, and the judiciary branch interprets them.  Each branch serves as a check and balance on the other two.

    The legislative branch also has the power to raise money, for example by imposing taxes, and the power to spend it.  It’s been written that such power is with this branch primarily because it’s most directly accountable to the people.  Each state legislator must run for office either every two or every four years.  Most in the executive branch and the judiciary are spared that ordeal.

    With the power to spend money comes the power to place conditions upon its use.  The legislature might not have the power to tell the executive branch what to do directly, for example, but it could certainly say that a particular agency shall do X, or shall not do Y, if it wants to see legislatively appropriated dollars flow into its coffers.

    Against that backdrop is a very debate-worthy comment from one powerful senator at the end of the 2018 session.  He described a “tension” between the legislative and judicial branches of government:

    We also had some tension with the judiciary.  That was very healthy as well.  They did some rulings that we thought were stepping into the legislative arena, they were trying to legislate from the bench.  We control the purse strings, so we said no to a lot of their money.  They reversed some of their decisions.  We gave them some money.  So the tension worked.

    Civil Cafe: Legislative Wrap-Up 2018 Panel Discussion 23:10-23:34 (May 2, 2018).

    In past articles we at the Foundation often have urged our legislators to use their power of the purse to set priorities for where we are going as a society.  The state has a limited amount of hard-earned taxpayer dollars, and the legislature is there to make sure that the dollars they collect are spent wisely for our collective benefit.

    In other states, this kind of tension has played out in the public arena, with observers scratching their heads and with the media having a field day.  In New York in 1991, for example, Governor Cuomo slashed the judiciary’s budget and Chief Justice Wachtler sued, eventually resulting in a settlement.  A similar spectacle occurred in Illinois in 2003, where the justices ordered the government to pay salary increases that its governor vetoed.

    What the Hawaii Senator referred to, however, is not a question of finding the wisest use of scarce taxpayer funds.  It was an attempt, and a successful one if we take the speaker at his word, to use that power to influence the content of judicial decisions.  “Justice is blind,” we are told, meaning that justice should be applied without regard to money, power, or other status.  If money — especially our own money — is used to skew or bend the justice we deliver here in Hawaii, then our justice is tainted.

    Certainly, the Legislature and the Judiciary have their respective jobs to do and there is some merit to slapping down one branch that has entered the other’s kuleana.  Legislating from the bench isn’t legitimate either; that’s why the courts have a “political question doctrine” that says policy issues for which no discernible standards in law exist are not issues for court resolution but are to be left to the legislature.  What happens, though, if the judiciary and the legislature disagree on what questions are political and which are judicial?  Do we let the courts decide, or should the legislature be allowed to take matters into its own hands by pulling the purse strings?

    Carbon Credits

    Today I have some help from the Hawaii State Watch Doggie’s wife, who is a passionate researcher.  Those who know them know who’s the brains in their family!

    Q:  I’ve been reading about our Department of Land and Natural Resources, which is doing a reforestation project in East Maui.  It’s hired a vendor to certify the project for “carbon credits.”  Why are they doing that if we don’t even have a carbon tax (which we have written about before here and here)?

    A:  Carbon credits have nothing to do with a carbon tax.  The same end goal, perhaps, but the mechanism is very different.

    Q:  How so?

    A:  In the Kyoto Protocol, an international treaty adopted by over 190 countries other than the United States, the treaty countries agreed to cap the amount of greenhouse gases that each country generates.  The cap is measured in “Assigned Amount Units,” with each unit representing the emission of one metric ton of carbon dioxide or other equivalent greenhouse gas.  Each member country then sets quotas on the emissions of greenhouse gases by “operators,” which refer to local businesses and other organizations.  An operator that wants to emit more greenhouse gases than its quota has the option to buy “carbon credits,” which can be sold by either another operator who agrees to reduce its own quota by the number of credits sold or – and this is where we come in –other organizations that can demonstrate that they have reduced the emissions of greenhouse gases elsewhere.

    Our DLNR is saying that reforestation of 4,700 acres in the Kahikinui/Nakala area of East Maui will withdraw about 94,000 metric tons of carbon dioxide from our atmosphere.  If validated, 94,000 carbon credits could be made available for sale.

    Q:  So where would the buyer come from?  Somewhere on the mainland U.S.?

    A:  Could be.  Although the U.S. has not ratified the Kyoto Protocol and there is no central national cap-and-trade carbon pricing, some states such as California have such systems in effect, so the buyer could come from the Northeast and mid-Atlantic States or California.  

    Australia, the European Union, and several European countries have ratified the Doha Amendment, which extended the Kyoto Protocol past its original expiration date in 2012.  A buyer could easily come from one of those countries.

    Son:  Mom!  What’s Doha?

    A:  It’s the capital of Qatar, on the coast of the Persian Gulf.

    Son:  Oh!  Reminds me of shishkabobs!  Mom, I’m hungry!

    A:  Grrr…anything reminds you of food, and you just had lunch!  Growf!

    Son:  Yipe!  I think I’ll take a nap then.

    Q:  Carbon credits can come from a project here on Maui even though our country didn’t ratify the Kyoto Protocol?

    A:  Yes, if the project is validated internationally.  This was to encourage emission reduction projects to be undertaken in less developed countries that otherwise might not care about greenhouse gases.

    Q:  So how much are carbon credits selling for these days?

    A:  The market for credits rises and falls like the stock market, and the prices vary by project type.  One website here is listing reforestation project credits at about 14 Euros a credit (US $15.75).  At that price, the DLNR project credits could fetch about $1.5 million.  And DLNR estimates its cost for carbon credit certification at $150,000.

    Q:  The money we might be able to get from mainland or foreign companies would help pay for the expenses of our government without reaching into our own pocketbooks.  That’s a good thing, right?

    A:  Especially considering that reforestation is something we should be considering anyway because of the benefits to our environment.

    OHA’s LLCs: The Noose Is Tightening

    Our Office of Hawaiian Affairs (OHA) formed some limited liability companies (LLCs) a while ago and dropped significant assets into them, including some 1,875 acres in Waimea Valley on Oahu that were conveyed to Hi’ipaka LLC in 2007.  The LLCs’ governing documents all say that they are to be managed by individuals holding specified administrative positions at OHA, specifically the CEO, COO, and CFO.

    Over time, however, it became increasingly evident that the LLCs were being run like fiefdoms accountable to no one.  The State Auditor’s Report No. 18-03 brought to light concerns about spending irregularities, for example, including finding several occasions in which OHA’s CEO funded sponsorships contrary to Board-adopted guidelines and staff recommendations.

    The Board of Trustees of OHA engaged the accounting firm CliftonLarsenAllen LLP (“CLA”) to conduct a forensic accounting examination “to identify and quantify potential areas of waste, abuse, and fraud … for OHA and its LLCs.”  As of November 30, 2018, however, a memo from one of the OHA trustees observed: “The LLCs have refused to provide any information to CLA.  OHA’s failure and the LLCs’ refusal to honor the Board’s will[,] have led to substantial and unwarranted delays. … It is now unclear whether CLA will be able to complete the audit at all.” 

    Andrew Walden, publisher of Hawaii Free Press, submitted a request to turn over financial records and was told that the LLCs were independent entities to which public records laws didn’t apply.  In the resulting lawsuit, David Laeha, then OHA’s CFO and one of the managers of the LLCs, stated in court papers:  “As a matter of practice, the Managers restrict [OHA] access to the information of the [LLCs] so as to reserve managerial powers in the Managers, as contemplated in Respondents’ operating agreements.  Managers have explicitly limited OHA’s access to information, and reserved their right to continue to do so.”

    But now the noose is closing around the LLCs from several different angles, threatening to end the fiefdom and the shroud of secrecy surrounding it.

    On March 29, Circuit Judge Crabtree entered a Minute Order in Walden’s case ruling that the LLCs cannot avoid the public records laws.  The final order hasn’t been entered yet, but the direction in which the judge is heading appears clear.

    On April 12, the Senate adopted Senate Resolution 151, which urges OHA to complete the financial audit and management review of OHA and its subsidiaries.

    House Bill 172, now awaiting final floor votes in the House and Senate, contains a budget proviso appropriating funds for the CLA audit, requiring the auditor to submit its report 20 days before the 2020 legislative session starts, and preventing any of the $6.4 million appropriated in the bill for fiscal year 2020-2021 from being released until the legislature receives a copy of the audit report.

    The fiefdom must end.  We the People of Hawaii created OHA in the Hawaii Constitution and have specified that it be run by trustees elected by the people.  The lands and the vast sums of money that OHA controls (now in excess of $660 million) are assets belonging to the people of Hawaii.  Their use cannot be shielded from accountability (to both the Trustees and the general public) simply by tossing them into LLCs.  Those who have created or perpetuated this charade must be challenged.  The dealings of the LLCs must be disclosed.  If the audit discovers any misappropriation of those assets, appropriate remedial action must be taken.  Not only do the beneficiaries of OHA deserve this, all the people of Hawaii deserve this.

    HIDOE Achieves Success with Job Order Contracting

    We’ve written a lot about the Hawaii State Watch Doggie.  Those who have visited our Twitter site have seen that the Doggie is a family man, with a wife and son.  His son is five and loves to ask questions.  He also really, really, really loves to eat.

    Q:  Are you reading something about my school, Dad?

    A:  Not just your school.  The government is fixing the roofs on lots of schools.  And it happens really fast.

    Q:  How fast?

    A:  They did eight roofing projects in about eight months.

    Q:  Is that fast?

    A:  Normally, one project using the traditional design-bid-build method takes an average of seven years.

    Q:  Why so long?

    A:  The project needs to go through appropriation, design, bidding, and construction.

    Q:  Why didn’t the roof projects take seven years also?

    A:  They changed the process to something called “Job Order Contracting.”  Instead of having the contractors bid on only one job at a time, they had the contractors give the DOE a menu.  The DOE picked a handful of contractors, and then was able to order projects off their menus.

    Q:  Like how I can go into a restaurant and order a hamburger?

    A:  Yes.  But don’t do it now, it’s too close to dinner time.

    Q:  I want a hamburger!

    A:  Anyway, the DOE has lots of construction projects they need work on.

    Q:  You mean when they need chores done, they don’t do them?

    A:  No, they just make a list of the projects and call them “deferred maintenance.”

    Q:  How much deferred maintenance do they have?

    A:  At the beginning of this year, the DOE said it was $868 million.  The Boss complained about that back in January.

    Q:  Wasn’t he also complaining about the University?

    A:  Yes, the University of Hawaii was reporting a backlog of $722 million.

    Q:  So, they didn’t do their chores either?  And that’s legal?

    A:  Well, some of our lawmakers were scolding them when they came to the legislature for money.

    Q:  So, is the DOE going to use this menu stuff for other things?

    A:  Yes, they will use that method for air conditioning projects next, and then electrical upgrades.

    Q:  Is the method really new?

    A:  Not really.  The federal government has been using it for some time.

    Q:  Then why haven’t we used it before?

    A:  I don’t know.

    Q:  Is the University of Hawaii going to use it?

    A:  I don’t know.  They should.  By the way, when are you going to clean your room? 

    Q:  Next month.  Deferred maintenance!

    A:  NO!!

    Thinktech Interview: Real Estate Firms in 2019 (Business in Hawaii)

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    by Ray Tsuchiyama

    Host Dailynn Yanagida, an expert in business organizations, interviewed me in January 2019 for 2019 Hawaii Real Estate trends.

    I recalled my first phase in Hawaii real estate – in the 1980s — a turbulent period characterized by stagflation (residential mortgage rates skyrocketed to 18 percent) with high employment.  During this time Hawaii realtors were first exposed to the many facets of “agency” (fiduciary duties to the Client – Seller, Buyer, or Dual).  After the tsunami of Japanese real estate investment in the 1980s, the Japanese “Bubble Economy” collapsed by the early 1990s, along with the first Iraq War – the U.S. bombing of Baghdad in January 1991 led to a prolonged tourism dip, and the 1997 Asian Financial Crisis poured gasoline on the fire – resulting in a real estate recession, which was mitigated by the West Coast Internet economic boom of the early 2000s and higher Mainland visitor numbers and spending.

    Dailynn asked me about 2019 annual trends – and I responded simply, according to the Hawaii Board of Realtors, in December 2018 there was a 30% year-on-year drop in residential closings compared to December 2017.  In other words, more inventory, with longer “sales cycles”, with an ever-slight advantage going to Buyers.  With an April 2019 view, that trend is continuing – and there has been lower listing prices, especially with many Kakaako condos competing now with older Waikiki, Makiki, Ala Moana, and even Hawaii-Kai properties.  We have to see if there will be more volatile price adjustments by summer.

    In terms of global macro-trends, the low U.S. Fed interest rates continue, but there was a slight increase from 2.25 – 2.5% in January 2019 to 2.7 – 2.8% in March 2019 – heading into 2.9% territory by the end of 2019.  U.S. unemployment rates continue to be low. 

    Of my macro-currency prediction, I was wrong – usually with higher U.S. Fed interest rates, the U.S. dollar gains – and so it did – hovering at the 112 yen vis-à-vis the U.S. dollar in mid-April.  I had expected the  Japanese yen will increase in value to <110 to a dollar – but the Japanese economy has been hurt by slowing sales to China.

    I was on-the-mark for the Chinese renminbi/yuan – hitting nearly 7 to a U.S. dollar this spring, and now at 6.7 – a far cry from 8.5 that I enjoyed in the early 2000s.  The resurgent U.S. dollar has impacted PRC/Mainland real estate development projects in North America (and helped the Hong Kong economy stabilize a bit – since the Hong Kong currency is pegged to the U.S. dollar).

    I received many comments from Hawaii realtors on my overview of the “changes” in residential real estate, especially on the rise of “teams” like Myron Kiriu or the “Ihara Team”, plus Preview Agents at Coldwell increasing transactions share.  Names like Keller Williams, Hawaii Life and Better Homes & Gardens are new entrants, and older brands like Kahala Associates are gone.

    Finally, I commented on economic macro-trends for the State, including the continuing crisis in housing Inventory – highlighted by economist Paul Brewbaker again and again – there just not been new housing units Hawaii compared to the 1970s – that’s four decades ago!   Firms still grabble with the State/City permits and zoning process.  As Hawaii young people leave for greener pastures (yes, Nevada has >80,000 former Hawaii residents now), this is the demographic that pays taxes.  Paradoxically, I said that the main factor for mass transit is a growing population (so they can explore transit options earlier than later) – with a “declining” population, there evaporates the reason for a mass transit line!   So population, jobs, mass transit, and real estate/housing all are intertwined – one is impacted by the other.

    Like I said, I remain an optimist: the last 4 – 5 transit stations (Downtown – Waikiki) offer the best opportunity for a Private-Public Partnership (P3) in developing mixed-use development on top/adjacent the rail stations (residential, office, commercial, even museums, sports centers, tourist destinations)– and so it is again about real estate.  It is not Transportation-Oriented Development but the other way around: Development-Oriented Transit – and revive the Honolulu inner core for “Work, Live, Play”.  See my Civil Beat Op-Ed for a more in-depth analysis on P3:

    My closing comments on tech and real estate – VR, AR, platform disruptors – I hope to address more fully in a future Interview Show.  Thanks for watching!