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Maui Housing Woes Traceable to Red Tape

Hawaii is the most regulated and arguably overplanned state in the union, according to University of Hawaii law professor David Callies, who spoke about Hawaii’s extensive land use controls, at an event last week in Paia sponsored by the Grassroot Institute of Hawaii. (See full presentation here)

Also the author of “Regulating Paradise: Land Use Controls in Hawaii,” Callies said there are two means by which Hawaii’s crisis-level housing prices could be reduced, preferably in conjunction with each other: Scale back building regulations and increase the amount of land zoned for urban development.

Callies said that being a home developer in Hawaii already is tough: Importing supplies adds to costs, and employee wages tend to be higher than on the mainland.

But it doesn’t stop there. Hawaii’s home prices are high, Callies said, because of “the time it takes to get through the state and local government processes — and to conform to the plans that need to be conformed with — and because the land exactions and fees add to it.”

Callies noted that “95 percent of the land area in the state is classified in either conservation or agriculture … and less than 5 percent — about 4.1 percent — is classified urban. Development of any size or quality or density can’t take place except on land the state classified as urban.”

Obviously, the amount of land on which developers are allowed to build on is scarce, and complying with zoning and permitting laws can add years to the development process.

Callies said the relentless addition of well-intentioned regulations has both overcomplicated the development process and added costs that get passed on to consumers.

For example, “impact fees” are imposed on developers to pay for a proportional amount of the water, sewage, roads, traffic lights, affordable houses, schools and other things that their development’s might require. Callies said such fees are “good and proper … in theory,” but typically add $70,000 to $100,000 dollars per housing unit.

He said the intentions behind the creation of the many regulations “are all benign,” but the result has been to drive up up the cost of housing for everybody.

“We don’t ever repeal anything, we just add to it,” he said.

Hawaii could still turn around its housing crisis, Callies said, but only if the core of the problem is addressed, by reducing regulation and allowing more land on which homes can be built for families hoping to stay in the islands.

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About Aaron Lief

Aaron Lief
Aaron Lief is a researcher with the Grassroot Institute of Hawai`i, a nonprofit public policy think tank based that seeks to educate people about the values of individual liberty, economic freedom and accountable government.

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