#Honolulu, #Kauai, #Maui, #Molokai, #Niihau, #Oahu #RealEstate #Rentals, #Businesses, #Hawaii

“When you’re a hammer, as they say, everything looks like a nail. And when you’re a government politician in Hawaii, regulation is the answer to every problem.”

Perhaps that’s why so many of our politicians are trying to solve Hawaii’s housing crisis with big government solutions like taxes on empty homes, government-funded housing projects and regulations that limit or sanction certain types of development.

Extensive research, however, shows that the reason for Hawaii’s housing shortage is the Hawaii government. 

So what can we change in this situation?

The reality is that if we want to make a difference, we should not try to import policies from areas with high housing costs such as New York, Los Angeles and San Francisco, or countries with vastly different social and governmental structures such as Singapore. Instead, we should look to places that have managed to maintain housing affordability, such as Tokyo, where housing prices have been relatively stable for two decades.

More recently, Hawaii had strong housing construction until about 1972 or 1973, but then it collapsed and never recovered.

Reasons for this, he said, include the State Land Use Commission, created in 1961, and the Hawaii Environmental Policy Act of 1974, both of which are heavily involved in land use management.

“It comes down to land use and making something illegal. Essentially, reasonable density—we call it light density—has been made illegal in Hawaii. It is illegal to have two real estate units on a lot. And all this just increases the cost of land.”

As a result, Hawaii has one of the most expensive housing markets in the world, second only to San Francisco and ahead of London.

Why don’t we use Singapore’s development model, since after independence it was really a clean slate? 

Singapore in the 1960s consisted mostly of slums, but today the government owns 90% of the land and can acquire private land at low prices.

Moreover, Singapore also has a highly effective government leadership cadre and really only has one form of government that is not necessarily as responsive to voters, allowing it to overcome many barriers to increasing supply.

But the downside of applying such a model in Hawaii may be that this Singaporean model may not be able to benefit Hawaii. And if you end up trying it and failing, it could be costly for the state of Hawaii because you might end up with public housing, which is very common on the mainland where you basically have increased racial segregation and income segregation.

Perhaps a better option for Hawaii would be the kind of “light density” zoning that has helped Tokyo create adequate affordable housing.

The secret to Tokyo’s success? Ownership.

After World War II, Japan’s new constitution provided for strong property rights. By the 1980s, this included the right to develop one’s property as one wished, as long as it did not cause a nuisance.

“You can build duplexes, triplexes, high-rise buildings. As a result, over a certain period, more housing was built in Tokyo than in the entire state of California by several times.”

This has allowed Tokyo to meet the needs of its population in terms of housing that is affordable for both renters and homeowners.

Light density relies in part on “by-right” zoning, which allows projects that meet all zoning requirements to be developed without going through a discretionary approval process. This essentially legalizes small, fast, economical, adaptable and simple additions to home construction, while keeping health and safety in mind.

If Hawaii adopts Tokyo’s example, Oahu alone could add 26,000 homes over the next 10 years.

It would also be beneficial for Hawaii to set aside more land for residential use, since only 5% of land in Hawaii is available for residential development, an increase of just 1 or 2 percentage points would result in a 20% or 40% increase, respectively, in land available for development . 

I certainly understand that there is no such thing as a quick fix to Hawaii’s housing crisis. This is a problem that has been decades in the making and is being made worse by modern policies and laws like inclusionary zoning. 

I also have no doubt that people who want to use government to solve a problem have the best intentions. But the data is clear: If we want our children and grandchildren to be able to find affordable housing in Hawaii, we must liberalize our state and local land use and zoning regulations.

Nika Vidi

Hawaii.bio