Editor’s note: This is the second in a series of stories that looks closely at specific issues facing Hawaii and how the Democratic gubernatorial candidates would deal with them. Also coming this week, Civil Beat teamed up with Hawaii News Now for in-depth interviews with the top candidates for governor in both the Democratic and Republican primaries. Register to attend our free virtual watch party of Hawaii News Now’s special report on Monday. Civil Beat will be posting the full interviews on our Governor Race election page, which is where you can find all our coverage of the run-up to the primary.

Vicky Cayetano and Lt. Gov. Josh Green are both prepared to engage the emergency powers of state government to finally break though the barriers to rapidly developing affordable housing in Hawaii, but both candidates are vague on exactly which regulatory steps need to be suspended or scrapped.

Green said that if he is elected he will issue an executive order to all state housing agencies to expedite permits for all projects already approved by the state Land Use Commission. He says 42,000 units are “entitled” but stalled because of government “red tape,” and specifically mentioned delays in the chronically understaffed State Historic Preservation Division.

Cayetano, a successful longtime businesswoman, said one of her first acts as governor would be to work with the Legislature to declare a “state of emergency” for housing to fast-track some affordable housing proposals “while we work on the longer term issue of why it takes so long, what are the barriers to accelerating affordable housing.”

Civil Beat asked the leading Democratic candidates for governor about their near-term, highest-priority initiatives for coping with the housing shortage, and Green and Cayetano offered up those ideas as their top-tier proposals.

Both candidates said housing is the main driver of Hawaii’s high cost of living, and their housing plans will be crucial components of their efforts to make life in Hawaii more affordable.

U.S. Rep. Kai Kahele, who is also considered one of the top contenders in the Democratic primary, declined to be interviewed for this series, saying through a spokesman he is dissatisfied with the way Civil Beat has covered the governor’s race.

Condominium construction cranes near the Ala Moana area.
Construction cranes have been at work over the past few years near the Ala Moana area. Both Vicky Cayetano and Josh Green are ready to use the government’s emergency powers to waive at least some state and county requirements for affordable housing projects. Cory Lum/Civil Beat/2022

Justin Tyndall, assistant professor of economics at the University of Hawaii Economic Research Organization, said the candidates are on the right track in seeking to reduce regulation and permitting delays. Hawaii requires approvals by overlapping agencies such as the state Land Use Commission and county planning agencies to build housing, he said.

“Anything you can do to streamline that process I think is a worthy goal, and could be quite helpful,” he said.

Green said he wants to use the power of the governor’s office to press state agencies and the counties to expedite the units that have already been entitled, “because if you were building these 42,000 units, we’d be well on our way to a solution,” he said. “We just have to be more direct and get it done.”

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But the estimate Green cites of 42,000 units that are entitled but not permitted is more complicated than it appears. John White, advisor to the Green campaign, said that number originated with the state Land Use Commission, and it includes projects such as Koa Ridge and Hoopili where building has already begun.

It also includes a 7,900-unit project at Waiawa that was approved by the Land Use Commission in 1988, but never built. Kamehameha Schools has revived that project and is now planning 11,000 homes there, but still hasn’t completed the environmental impact statement or even applied for all of the government approvals required for the project.

Daniel Orodenker, executive officer of the LUC, said the 42,000 units Green references is the estimate of all of the housing approved by the LUC that has not yet been built. Some of those projects were approved in the 1980s, 1990s and 2000s, and may have stalled or failed because of infrastructure costs or changes in the market or interest rates.

Research shows it takes 10 years from the time a developer launches a major project until construction, and the LUC by law can take no longer than a year processing a project, he said. Projects do get stuck in state processes at times, but many of the problems are at the county level, which the new governor cannot simply fix with an order.

Green said he would like to have the Legislature meet in a special session to give lawmakers “first crack” at the housing issue to try to get a consensus on the solutions. He added: “I am completely willing, however, to use emergency powers to expedite housing,” which might involve waiving state laws or county ordinances to move projects forward.

Green also wants to mobilize state departments to help the counties to crack down on illegal vacation rentals, saying that “I want those back into the housing market.”

But Tyndall said even an aggressive enforcement program may not have quite the impact people expect. Based on research from Barcelona, Spain, and other locations, Tyndall estimates vacation rentals may be causing a fairly modest 5% escalation in housing prices here.

Demonstrators in opposition to Bill 41 hold signs on King Street near Honolulu Hale.
Demonstrators on King Street near Honolulu Hale oppose a bill to curtail vacation rentals. Lt. Gov. Josh Green is promising that if he is elected governor, he will mobilize state agencies to help the counties crack down on illegal short-term rentals. Cory Lum/Civil Beat/2022

Green is also calling for a “moonshot” to speed development on Hawaiian homelands, and says he will appoint a developer or builder to lead that department. That initiative will surely get a huge boost from a $600 million appropriation the Legislature just approved to help the chronically underfunded Department of Hawaiian Home Lands develop housing.

Solving the Hawaiian homelands problem “would go a long way to changing people’s view of how the state government respects the Hawaiian people, and I think that’s really important,” he said.

Cayetano said her plans for a “state of emergency” on housing would involve reaching out to the counties and developers to look for ways to accelerate affordable housing. Longer term, she wants to scrutinize the approval processes for all projects.

The idea is to selectively waive some of the state and county requirements for developers of affordable projects, “but I don’t want people to think there’s going to be no planning or permitting involved.”

She said she intends to communicate clearly to the public to be sure people “don’t think things are being bypassed to the detriment of the community. But look, we can’t continue to address affordable housing in the same way, (or) we will be right back to where we are today.”

She also cited the example of the State Historic Preservation Division, saying she supports preservation of historic buildings, but questions exactly what triggers SHPD review of a project.

“That’s what I want to have a deeper look at, to see if our planning rules are safeguards, or really more detrimental to affordable housing,” she said. “Just an old building doesn’t necessarily make it historic.”

Cayetano isn’t ready to set a specific goal of how many affordable units she wants developed by a specific date, but said “we have to be aggressive and at least target a third of the demand in the next three years.”

She also said state leadership needs to have the “political will” to set priorities.

“When you look at Aloha Stadium and the current plan that they have — or a lack of a detailed plan — it’s very concerning to see that kind of decision being made,” she said. “If I’m governor, I’d be the first one to say ‘We need to take a deeper look at this.’ We don’t need another rail project.”

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