Why Hawaii Housing Costs So Much

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BY EDWARD GUTTELING – “Ownership of private property is a constitutional civil right.” So stated UH Prof. David Callies, Hawaii’s land use law authority, at the June meeting of the Conservative Forum for Hawaii. “Hawaii is the most regulated state in the nation,” he said. And from that follows the devil in the details. Restricting this right has severe effects on our freedom and on poverty.

An estimated 4,800 Big Island families (11 percent) are on the affordable housing waiting list.  Hawaii has the highest rental costs and lowest proportion of homeowners in the nation. There are reasons for this.


Presently, the state Land Use Commission (LUC) requires developments have 25-30% ‘affordable’ units. Counties add on more.

The County defines an “affordable home” as $240,000. That is not affordable to most. No wonder there are no “affordable” housing developments. Maui requires 50% affordable units. Callies explains: “The LUC tried a 50% requirement 15-20 years ago. No development could afford that. Projects come to a halt or don’t even get started”. Massachusetts in 14 years built 1400 units by such set-asides. Such a minuscule contribution to the housing markets is just not worth it.

Walter Moe, owner-builder consultant, showed pending building code changes increase costs $25,000. “All they do is pass more laws, make costs go up.”  Every new code requirement increases costs and difficulties. None lower costs, or make the process easier. This hits the lowest incomes hardest.

Real estate broker David Turner described the biggest problem of all:  government delays of projects. “Time IS money.”  He recounted the unnecessary county level permitting and inspection delays, in addition to state delays.

“No wonder the cost of housing goes up, with layers of requirements” said Callies. “It takes 10-14 years to get a project in Hawaii from green field to completion. Markets can absorb that somewhat, but eventually things stop. Every delay is costly. All projects are financed and interest accrues even without construction.” (Remember the Super Ferry bankruptcy from unexpected Environmental Impact Study delays?) Currently, entities such as the Sierra Club et al. win 90% of their State Supreme Court EIS cases, 65-75% by reversal of lower court findings.  “The Supreme Court creates their own interpretations from the bench. We need EIS law but desperately need amending by the legislature.”  If deep pocket developers with skilled attorneys cannot predict land use laws effectively, with these odds the only rational decision is not to start.

The LUC recently reversed Bridge Aina Lea’s development from urban to agriculture, negating all permits including the already completed 30-40 affordable units. The LUC has previously stated that agriculture was impossible due to extensive lava fields.
“This is wrong in so many ways”  said Callies. The LUC is being sued for $35.7 million.

Callies adds another point: “The US Supreme Court ruled that any property regulation removing all meaningful economic use constitutes an illegal taking, requiring compensation. No excuse, no justification would prevail.”

Currently, 2 of the 5 LUC conservation land designations (40% of all land) eliminate all meaningful economic use for owners. “In Hawaii we have a huge bulls-eye on our back” as a result. “There was a time when an LUC made sense to protect the state’s interest in preserving plantation agriculture. The state’s interests no longer have any need for protection. Counties do. Hawaii and California are nearly the only states in the nation where land use is regarded as a privilege to be bestowed by government.”

In 2005 the US Supreme Court found (5:4) government may condemn one person’s private property for the use of another private citizen, for chance of any public economic benefit. 47 of the 50 states reacted to further protect citizens from eminent domain laws. “Increasing the protection of a civil right is always constitutional,” said Callies. Hawaii is not one of them.

“Government is not the solution. Government is the problem.” This quote from President Ronald Reagan’s  1981 inaugural address illustrates why Hawaii has such high housing costs, why so many are unable to be home owners, and why our freedoms are so threatened. Meanwhile Hawaii County Office of Housing and Community Development signed a $34,000 consultant contract to study the mystery of why affordable housing is becoming less available.

Dr. Gutteling is vice president of the Conservative Forum for Hawaii conforhawaii.com Reprinted with permission from the Hawaii Tribune Herald





  1. UH Prof. David Callies is highly intelligent and I have tremendous respect for him. However, I think several of his points overstate the case for the constitutional takings clause and the extent of protection for private property rights

    He said that, “Increasing the protection of a civil right is always constitutional”. This is not necessarily so when one constitutional right clashes with another constitutional right as so often occurs. For example, courts around the nation are currently grappling with the clash between the open and conceal carry rights of gun owners and the exclusive private property rights of commercial businesses open to the public, employee cars parked in employer parking lots, and college campuses. To increase the scope of one individual constitutional right may diminish the scope of another equally important individual constitutional right.

    “Callies adds another point: “The US Supreme Court ruled that any property regulation removing all meaningful economic use constitutes an illegal taking, requiring compensation. No excuse, no justification would prevail.”’ The Lucas v. South Carolina Coastal Commission case is sort of an outlier because it requires an extreme regulatory taking of any and all economic benefit. Land zoned for Ag may still permit private golf ranges, shooting/archery/skeet ranges, hunting, eco-tourist camping, zip lines, wedding events, baby luaus and other business ventures (albeit much less or not profitable ones). I recall ruining my seven iron in a lava field of a golf course on the Big Island.

    The 2005 Kelo case is not much of a conceptual departure from the Midkiff case here in Hawaii back in the ’80s. The holding and reasoning are somewhat similar though the resulting legislative reaction was not.

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