State Lawmakers Have Best Chance In A While To Move Needle In Solving Hawaii Housing Crisis

by Ted Kefalas

Smaller homes on smaller lots could be a big antidote to Hawaii’s housing shortage if only state lawmakers would make it easier to build them.

A bill currently making its way through the state Legislature, SB3202, set out to do just that.

The premise of the bill is the sad fact that land costs are the largest component of home prices in Hawaii, so an easy way to lower housing costs in the islands is to add flexibility to county zoning codes that require every home to be on at least 5,000 square feet of land.

In other words, allow less land per house.

For example, a 5,000-square-foot lot in Kaimuki can easily have a land value of more than $1 million. So, putting a single home on that lot means that a homebuyer will have to pay for land he or she might not even need or want.

Adding a second or third unit to the lot, however, would disperse the cost of the land, and these smaller homes could then sell for a third of the cost that standard houses tend to sell for now.

However, because of Hawaii’s current local county zoning codes, instead what we have is a lack of diverse housing options available for locals, which has prompted thousands of residents to leave the islands every year for the past seven years in search of a lower cost of living.

The political quandary is that if we can’t build outward into Hawaii’s agricultural lands, the only option then is to build more on the lands already designated for housing. The advantage of this option is that much of the needed infrastructure for new housing already exists.

Often called “upzoning,” this means either building more high-rises; building more multifamily dwellings such as duplexes and triplexes; converting more office buildings into residences; or allowing smaller homes on smaller plots of land — or all of the above.

This idea of upzoning is not without precedent. Diverse cities such as Houston, Portland, Minneapolis and Decatur, Georgia, have also legalized more housing in their existing urban areas with varying degrees of success. Auckland, New Zealand, is an excellent international example.

At the state level, California and Montana recently took action to preempt local governments that had been dragging their feet in addressing spiraling housing costs.

This has been the case in Hawaii. For example, Honolulu’s last Primary Urban Center Development Plan, adopted in 2004, identified redeveloping small lots as a key housing strategy but little has happened since.

So now state lawmakers are attempting to move the needle as best they can, and kudos to them for having the courage to do so.

Unfortunately, SB3202 was amended in early April to remove several of its most important provisions, despite agreement on compromise language among two of the three committee chairs in charge of hearing the bill.

It’s a shame that SB3202 was gutted after making it all this way because it probably is the best bill at the Legislature in a long time that could actually make a difference in facilitating more homebuilding and alleviating Hawaii’s heart-wrenching housing crisis.

But to borrow a phrase from the famous baseball star Yogi Berra, the legislative session ain’t over till it’s over. So maybe we’ll get something we can all be happy with after all.

TED KEFALAS is the director of strategic campaigns at the Grassroot Institute of Hawaii.