Honolulu Council Reverses Decade-old Mandatory Leasehold Conversion Law, Restores Property Rights

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Dozens of citizens packed the Honolulu City Council Jan. 26, 2005, to testify for and against Bill 53, which will undo a decade-old law that forced landowners to sell their property to those leasing their land.

The bill passed its third and final reading, with a vote of 6 to 3. Those opposed including Council Members Charles Djou, Gary Okino and Barbara Marshall. Voting in favor of Bill 53 were Council Members Ann Kobayashi, Rod Tam, Donovan Dela Cruz, Todd Apo, Romy Cachola and Nestor Garcia.


The final vote on Bill 53 was no surprise to those testifying on the bill over the last several months. What was in question was whether council members would support an amendment to Bill 53 proposed by Djou that would have grandfathered the law so that properties already in the conversion process would go forward. Djou says that is only fair and it is wise so the city can avoid extensive litigation over the issue. The final vote on the amendment was 5 to 4 against the amendment, with Council Chair Dela Cruz supporting Djou, in addition to Marshall and Okino.

While former Honolulu Mayor Jeremy Harris was opposed to any change in the law during his 10 years in office, newly elected Honolulu Mayor Mufi Hannemann is expected to sign the bill into law. During Hannemann’s campaign for mayor in 2004, he pledged that if Bill 53 crossed his desk, he’s sign it, returning power to the landowners. That pledge helped him get the backing of many Hawaiians, including Kamehameha Schools graduates and employees, who say property rights are extremely important to Hawaiian heritage.

Passed 10 years ago by lawmakers who sought to break up the power and control of the state by land monopoly holders, such as the Bishop Estate and Kamehameha Schools, the leasehold conversion law mandated land owners — large and small — sell their at fair market values to those leasing the property. Hundreds of lessees took advantage of the opportunity and bought the land beneath their units, thereby preventing huge spikes in their leasehold contracts.

Arguments for and against the change were passionate.

Those in favor of property rights say they should not be forced into selling their property against their will.

Those in favor of mandatory conversion, as the law now stands, say they will be homeless if they are not given the opportunity to buy the land under their homes.

John DeSoto, a former city council member who introduced a bill to revert the law back in favor of property owners while he was in the City Council, said today he was thankful for term limits. New council members who understand the importance of property rights now represent the majority of the Council, he says.

Mike Gabbard, a former city council member who resigned to run for Congress, but introduced Bill 53 before leaving the Council, also testified in favor.

Testifying against the bill were dozens of people living in condominiums in the process of being converted from lease to fee and other advocates of mandatory conversion. Some of those testifying broke down in tears saying they will be homeless if the bill passes. Others threatened the council members with expulsion from office.

Richard Port, former head of the Democratic Party of Hawaii, criticized council members for their support of Bill 53.

Djou says the fact that the Council did not agree to pass his amendment is “reckless.” “We can agree to disagree on the leasehold issue. But to pass a bill without the amendment that would allow existing conversions to continue is exposing the city to liability and is unfair to those in the process of acquiring their land.”

Tam says he voted for Bill 53 and against the amendment because he does not want the government to interfere in private contractual agreements.

“That’s not right,” Tam says.

”’Reach Malia Zimmerman, editor and president of Hawaii Reporter, via email at”’ mailto:malia@hawaiireporter.com