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On September 21st, the Grassroot Institute held an important panel discussion on free market solutions to homelessness and affordable housing. Moderated by Dr. Keli’i Akina, the panel featured a number of distinguished experts and community activists. That panel is now available to view online–just click play below or go here to view on You Tube. (And see below for the transcript of Dr. Akina’s opening remarks and the list of panelists.)

Opening presentation from Keli’i Akina, Ph.D.

At the outset, I want to thank each and every one of our distinguished panelists today. You are doing good work in the community, and one of the purposes of our panel is to highlight that. Thank you for your commitment, creativity and courage.

The Grassroot Institute of Hawaii is pleased to come alongside you, cheer you on, and play a complementary roll with the work that you and other community and government organizations are doing.

There are two approaches to meeting the needs of the least advantaged in society. And both approaches are essential and must take place simultaneously.

The first approach is on the ground level. It’s the meeting of the immediate needs of the least advantaged for food, clothing, shelter, and health care. Those who serve at this level are really the boots on the ground, the heroes, in the endeavor to alleviate poverty and homelessness.

But there is a second approach that is frequently neglected or absent. And that is the revamping of the economy according to free-market principles in such a way that will benefit all people including the least advantaged in society.

The term free-market is often misunderstood or promoted in its extreme, so at the outset let me at least say what we are not talking about. Free-market economics does not mean that the poor must fend for themselves with no safety net. It does not mean survival of the fittest according to the Gospel of Gordon Gecko of Wall Street. Nor does it mean that Government has no role to play at all.

Free-market principles are those which allow the market to work in the most natural way harnessing the forces of supply and demand with the least amount of government interference. The free market allows individuals and companies to exchange freely with each other in the environment of healthy competition, ultimately providing consumers with the greatest amount of choice. When free-markets operate well, government has a limited and accountable role, most significantly in the insuring of the rule of law, which protects individual property rights and insures that contracts are upheld.

Research shows that wherever in the world free-market principles are implemented, the economy flourishes and all segments of society, the wealthy and the poor, are better off in terms of economic and human rights. That is why  Grassroot Institute monitors this research and has become a research collaborator and co-publisher of the Economic Freedom of North America report of the Fraser Institute, to be released again this Fall.

Economist Stephen Moore in his book Who’s the Fairest of Them All? surveys economies in states and nations across the world and has documented an important finding. In the economies that follow free-market principles, the needs of all people along the economic spectrum, for food, clothing, shelter, and healthcare, are met at the highest levels. All segments of society are better off in free-market economies.

To apply this result here in Hawaii, the Grassroot Institute is researching and developing policy in multiple areas. Let me close with ten of our initiatives, which I like to call, “10 things Hawaii Can Do So That Everyone Gets Richer.”

  1. Increase the supply of land for housing. Currently, zoning rules limit housing and urban development to somewhere between 2 1/2 and 3% of all the land mass of Hawaii. Experts agree that a small percentage increase would not hurt the environment, but could increase the supply of developable land, and that could be ear-marked for affordable housing as well as help to lower the overall price of housing.
  2. Increase opportunities for the poor to have jobs by reducing barriers to work. By limiting or creating exemptions to minimum-wage laws, the supply of temporary low-wage jobs available to the poor would increase. Additionally, Hawaii is one of the states with the highest level of regulatory and licensing barriers to low skilled work. Loosening up on this would significantly help those poor who want to work.
  3. Eliminate the GET/Sales tax on food and medicine, and stop raising the GET/Sales tax for public projects. Low income wage earners and the poor spend and average of 13% of their income on GET/sales tax. At the very least we should follow the best practice of 32 states which have eliminated this tax at least on food and medicine.
  4. Cut red tape for private sector development projects. Throughout the state, private sector projects which purchase land and develop it for housing and other needs of the poor face significant zoning and county regulatory barriers. Given the fiscal condition of the state and counties, we should actually be incentivizing their efforts.
  5. Streamline the affordable housing development rules. We commend recent efforts to do this, and call for continued efforts to eliminate the State and counties barriers and disincentives to developers to build affordable housing.
  6. Allow private-sector solutions to our State Hospital labor crisis. With rising labor costs consuming 70% of the budget at Maui Community Hospital, and falling revenues under new Health care insurance laws, the State took the bold move last legislative session to allow Maui hospitals to put it’s labor force out to bid. This generated robust proposals from Hawaii Pacific Health and Kaiser. As bankrupt state hospitals mean services are cut for the poor and homeless, especially psychiatric services, a public-private labor partnership needs to be pursued at our state-owned hospitals on all islands.
  7. Solve Hawaii’s Micronesian immigration problem at its source. In addition to ground-level assistance to recent COFA immigrants from Micronesia, we need a long- term solution. That would be to get the federal government to remove free-market barriers to the rebuilding of the Micronesian economy, particularly in the fishing and tuna processing industries.
  8. Decrease the overall cost of living by updating the Jones Act. Alaska’s legislature has passed a law requiring its governor to lobby Washington to modify the Jones Act, a set of shipping restrictions established in the 1920’s. Even a slight updating of these laws, could result in significant drop in the cost of living, enabling more affordable housing.
  9. Enable private property ownership amongst native Hawaiians. Currently native Hawaiians, who represent a significant portion of the homeless and poor, stand in line for decades to acquire Hawaiian Homestead land that is leasehold. Unknown to many, it must be returned to the state when leaseholder heirs marry non-Hawaiians and their children drop below the qualifying blood quantum. Efforts should be made to allow the leaseholders to convert their property from leasehold to fee simple, and thus developed generational wealth.
  10. Transform Hawaii’s economic climate into a destination for global investment. Currently, investment capital for non-real estate projects tends to fly over Hawaii. While at the Grassroot Institute we do not take a specific stand on the pending Next Era/HEI merger, we are concerned that in its specter, State executive policies, such as the 100% renewables mandate and opposition to the merger, have resulted in the downgrading of our Moody’s rating for Hawaii’s electric utility to negative. Whether it is the failed super-ferry venture or the currently challenged $1.4 billion TMT project on Maunakea, Hawaii is in desperate need of measures that will transform our state into a destination for National and global investment. Otherwise, those at the bottom of the economic spectrum will be hurt the most.

Well, that’s our “10 things Hawaii Can Do So That Everyone Gets Richer.” If we could do enact even a small handful of these 10 initiatives, life would definitely be better for the poor in Hawaii.

Now, you may not agree with each of these policy proposals, and even at the Grassroot Institute we will continue to debate and update our work. So I do not want to give the impression that any of our panelists necessarily agree with all things that I have shared. But the reason I have invited them is that they are doing some exemplary things in terms of free-market principles. Remember free-market is a broad banner. It can include public private partnerships with government, faith-based work, and completely private sector endeavors.

So let’s turn now to some truly exemplary programs and approaches represented by our panelists.

 

Panelists:

Lisa Darcy is the Executive Director of the Ho’omoana Foundation, a Maui-based organization dedicated to assisting financially and emotionally disadvantaged individuals in the community. Lisa has had more than 25 years of experience helping people with chronic mental health issues, and homelessness issues. She sits on the State Commission on Homelessness.

Connie Mitchell is the Executive Director at the Institute for Human Services, a 501c3 non-profit with the mission of providing relief for the unsheltered. Their vision is, “a community where everyone has a right to, and responsibility for safe, decent, and affordable housing.”

Erin Rutherford is a program supervisor at Catholic Charities Hawaii. She is also on the Executive Committee for Partners in Care, and she leads community efforts for nationwide homeless initiatives. Erin is spearheading efforts to end veterans homelessness, and also works closely with the neighbor islands on this issue.

Victor Geminiani is the executive director of the Hawaii Appleseed Center for Law & Economic Justice, a 501c3 law firm created to advocate on behalf of low-income individuals and families in Hawaii on civil legal issues. Victor has spent the last 45 years trying to improve the lives of low-income people across six states.

Scott Morishige is the State Coordinator on Homelessness, which includes leading the Hawaii Interagency Council on Homelessness, staffing the Governor’s Leadership Team on Homelessness, and working closely on a coordinated statewide plan. Scott Morishige has managed programs for the Hawaii Community Foundation, and Helping Hands Hawaii, and many other projects in the community.

Rep. Andria Tupola is a Republican member of the Hawaii House of Representatives, representing District 43. She currently serves as Minority Floor Leader, and has been active in the homelessness and affordable housing issue in her community.

Sen. Maile Shimabukuro is a Democratic member of the Hawaii State Senate, representing District 21. She has been a supervising attorney in the Waianae Branch of the Legal Aid Society of Hawaii, and she has been active in finding solutions to the homelessness issue in Hawaii.