LUC reform isn’t glamorous, but it’s important

Keli’i Akina’s “Hawaii Together” program on Monday, Sept. 28, 2020, on ThinkTech Hawaii was all about the state Land Use Commission, which both he and his guest acknowledged isn’t typically the most captivating of topics.

“You know all there is to know about the Land Use Commission,” Akina said to Grassroot Institute of Hawaii research associate Jackson Makanikeoe Grubbe, who wrote the institute’s newest policy brief, “Reform the LUC to encourage more housing.” I‘m sure that’s good talk at a cocktail party.”

Grubbe chuckled: “I wouldn’t say that I know all of it. And you’re right that it’s not a particularly glamorous issue. But I think it’s extremely important.”

“It is, indeed,” said Akina.

And so began the conversation about how the LUC hamstrings homebuilding in Hawaii and what can be done about it.

Such talk might not be glamorous, but it could make a big difference in resolving Hawaii’s perennial housing crisis.

Watch the video to see more, or read the full transcript below.

9-30-20, “Hawaii Together”: Keli‘i Akina with guest Jackson Grubbe

Keli’i Akina: Aloha and welcome to “Hawaii Together” on the ThinkTech Hawaii broadcast network. I’m Keli’i Akina, president of the Grassroot Institute, and I’m delighted today to have one of our staff at the Grassroot Institute with us. 

If you live in Hawaii, or if you’ve had to move away from Hawaii, you know that one of our biggest problems is a shortage of housing that people can afford. As a result of that, many people simply leave the state in order to find more affordable housing for their careers, for their livelihoods, to raise their family, and so forth.

One of the reasons that we seem to have housing that can’t be afforded is because of an apparent, perhaps a contrived, shortage of housing due to what we consider to be an artificial scarcity of land. Although there really is more than enough land in the islands to have all the housing that we need and still preserve the beauty of nature and the aquifer and so forth, we ultimately end up developing on only 5% of all the landmass.

Did you realize that? There are strange reasons for that, but one of the problems in getting enough housing for people that can be afforded is an agency that creates a bottleneck. It’s called the Land Use Commission.

Now, if you really don’t know what the Land Use Commission is or does, you’re in good company, because hardly anyone does. I’m so proud of the Grassroot Institute staff, who’ve put together a recent research brief, entitled “Reform the Hawaii LUC to encourage more housing,” and I’m going to say that again: “Reform the Hawaii LUC to encourage more housing.” You can get a free copy of this on our website, grassrootinstitute.org. 

I’m with the staff person who led that project and wrote the report for us today, research associate Jackson Grubbe, a graduate of Brigham Young University up in Laie and a student at the University of Virginia School of Law right now. He’s an outstanding researcher, and we’re so glad he’s on the Grassroot Institute team. Jackson, welcome to the program. Aloha.

Jackson Grubbe: Aloha, thanks for having me.

Akina: You know all there is to know about the Land Use Commission. I’m sure that’s good talk at a cocktail party.

Grubbe: [chuckles] I wouldn’t say that I know all of it and you’re right, that it’s not a particularly glamorous issue. But I think it’s extremely important.

Akina: It is indeed. Why don’t you start right at the beginning and tell us what the Land Use Commission is and, in particular, how it may differ from other boards that we’re familiar with here in Hawaii.

Grubbe: Sure. The Land Use Commission was created in 1961 under the Land Use Law, and its purpose was to stop subdivisions that were spreading throughout agricultural conservation lands. You would have subdivisions on places like lava fields. So the government stepped in and said, “We need to centralize this and make sure that land-use regulations are more structured and predictable in a way, as you mentioned, “that doesn’t compromise natural resource protection.”

Akina: How is this Land Use Commission different from the county planning boards and, in fact, one of the major differences, of course, is the fact that the Land Use Commission exists on a statewide level, whereas planning boards exist at the counties.

Grubbe: Hawaii is unique in that it’s the only state that has a statewide Land Use Commission or something like that. Most jurisdictions have something where they handle everything at the county level, or [have] some multicounty land-use authorities. 

In the case of the Land Use Commission, its purpose is to handle district boundary amendments. First of all, I have to explain the difference between land use and zoning. Land use, in Hawaii, involves four categories, and that’s urban, agricultural, rural, and conservation.

When someone wants to reclassify a piece of land, the Land Use Commission is the board that oversees that and oversees the request to change the land-use designation. That’s different from a zoning board, because a zoning board is a matter of specific uses and specific impacts. Within an urban classification, you might have residential zoning or you would have commercial zoning or mixed-use zoning, industrial zoning, those kinds of things. So land use is bigger picture, zoning is more specific and smaller picture.

Akina: What kind of challenge does it create that the land use, or the governance of that, is situated in a statewide board with overall control as opposed to at the county level, at the most local level of government?

Grubbe: In talking with various developers, one of the main problems that it poses is delays. Delays are a problem because, in any development deal, any increased risk can jeopardize a housing development. Any added time, partners might back out of the deal, financiers might change their interest rates, you might have legal changes in terms of just laws that get passed with different regulations.

Let’s say that there are certain requirements that the project would have met before, and then if the law changes, then they have to go back through that. Any amount that you extend the building and approval process, that creates more and more possibilities for things to jeopardize the ultimate completion of the project.

Akina: Challenges such as the one you’re talking about, for example, delays for developers, are things that you became aware of not only theoretically through your research, but by actually talking with a broad spectrum of stakeholders, developers, citizens, and so forth, government leaders. Tell us just really briefly about the extent of interviews and so forth you conducted in the research project.

Grubbe: I wanted to get, as you mentioned, a broad spectrum of people who are interested in this. So I spoke with developers, I spoke with certain government officials. With the government officials, it was: What does the Land Use Commission do? Trying to get a background, how does that relate to, as you were saying, zoning and other kinds of regulators.

Then with the developers, it was: What is your experience with the Land Use Commission? Have you done projects that involve the Land Use Commission? 

Actually, multiple developers that I spoke with said that they specifically didn’t do any projects that required LUC, Land Use Commission, approval because of the possible delays and possible lawsuits that can arise throughout the process.

Akina: What was the LUC supposed to do for us here in Hawaii when it was created, and how does it compare to what it’s doing now?

Grubbe: Again, back in 1961, things weren’t as stable in terms of the counties’ ability to handle permitting, planning, land use through designations. It sought to centralize everything in order to control the “Wild West” approach that didn’t involve any, again, centralized authority. It curbed that by requiring everyone to go through one agency

That compares to now, where even though counties have become better at planning for urban expansion and development, the Land Use Commission still handles a lot of centralized — or it still has a lot of centralized authority. Its effect is that, at times, it can create delays which increases risks for developers. And when risks are increased, then it’s less likely that deals will go through, meaning that, ultimately, housing can be stifled or delayed.

Akina: Ultimately, how does the process affect the average person who wants to build a house?

Grubbe: The average person who wants to build a house wouldn’t necessarily be affected because the Land Use Commission only handles district boundary amendments, or petitions for reclassifying the land. Again, we talked about those four categories: urban, rural, agricultural, or conservation. They handle larger parcels.

Akina: When it comes to developers who say that the LUC hinders construction, can you give me some examples as to how that takes place?

Grubbe: Sure. From a bigger picture perspective, in the counties, when you go to seek a district boundary amendment  — and this is where it gets technical — the Land Use Commission handles district boundary amendments that are larger than 15 acres, and counties handle certain district boundary amendments that are on parcels that are smaller than 15 acres.

Akina: Just looking at some of the process, what are some examples of the delays that are caused by the LUC for developers? I know you know several of them. You’ve cited a handful in the study itself.

Grubbe: Sure. The Land Use Commission handles larger parcels. The county handles smaller parcels. At the county level, all of the land-use approvals have to be changed at the same time. That would include the district boundary amendment and then what are called CPAs and CICs. When a project requires Land Use Commission approval, it has to go through the Land Use Commission process first. It needs to get the statewide district boundary amendment. Then after that, you have to get the CPAs and CICs, any of the other local processes.

That’s one aspect from a more structural perspective. But on the ground, … if I’m a developer and I say, “Hey, I want to build this housing development here,” the Land Use Commission will say, “OK, that’s great, but you need to meet these certain requirements.” That could have to do [with] anything from environmental concerns, public facilities, infrastructure, those kinds of things. However, when you go to do the county approvals, counties require similar things. They look at environmental concerns, public facilities, and because there’s a lot of overlap, it will take the LUC process and make it a little bit longer instead of just having the county review certain things.

Now that’s not to say that the Land Use Commission should not exist. Its purpose, in terms of addressing statewide issues during district boundary amendments, that’s important. The point of the report is to say that there are certain avenues that we could take, certain options that legislators could take, to make more efficient land-use approvals.

Akina: One of the areas where developers are very frustrated is in the time it takes to develop affordable housing, and affordable housing has become an important part of their being able to do their business because of concessions that are needed to be made in order to get certain permissions to build. In what ways does the LUC hamstring the development of affordable housing, something much needed throughout the islands?

By the way, Jackson, I’m talking for our viewers. I’m not talking about housing that’s affordable. I’m specifically talking about partnerships with the government for affordable housing projects.

Grubbe: Sure. The delays that the LUC imposes, that’s across the board. It’s not necessarily affordable housing targeted, but it does happen to affect affordable-housing developments if they are above that 15-acre threshold that we talked about. For example, there was one on Maui. I forget the exact name right now, but it was just above the 15-acre threshold, and it was pushed off a couple of years because of the process and the added conditions and the LUC process in general, instead of just going through the county.

Akina: Very good. Well, I’ll ask you a little bit more about that when we come back from a quick break. To my viewers, we’re listening to Jackson Grubbe, who is a research associate at the Grassroot Institute, who led a project recently in which we published a brief on the Land Use Commission. We’ll have more questions for him, and he’ll have some great answers when we come back in just a moment. To ThinkTech Hawaii’s Hawaii Together, I’m Keli’i Akina. Don’t go away.


Akina: Welcome back to “Hawaii Together.” We’re talking with Jackson Grubbe about the Land Use Commission, and I hope you’ve enjoyed learning the rudiments of what that is and how it impacts the development of housing across the islands. I’m going to go back to Jackson right now with a question that goes to something you mentioned earlier about the Land Use Commission’s mission — that somehow, it has gotten mixed up with zoning regulation. How did this happen, and why does that create a problem?

Grubbe: Again, going back to the difference between land use and zoning, what has happened is that the LUC, in their reviews of these petitions to change the category of the land, they’ll look at the same kinds of things that the county would look at in a permitting application, for example, and that has to do with development designs, associated impacts, economic feasibility. The reason it’s a problem is because those things could already be handled at the county level. 

Again, I don’t want to be confusing. The LUC does have an important role. I think that the LUC is well-equipped to handle issues such as natural resource protection, conservation land, the things like potable water availability and those things that the county isn’t necessarily equipped to handle. But when it comes down to looking at an individual project and requiring the same kinds of conditions that would be required anyway at the county level, that’s where it just creates delays that it doesn’t need to.

Akina: That’s a departure from the original mission of the LUC. There are certain advantages of the ability to make decisions at the most local level, at the county level. What are those advantages for the consumer and for the developer as well as just for the entire state, in terms of the benefit of managing our resources well?

Grubbe: Here’s the big picture: It’s that when you have a more efficient process, or I guess if you were to reallocate some authority that the LUC has by giving some of it to the county to handle the issues that could have been handled on the county anyway — we’ll go through that a little bit more later — it makes the overall approval process more efficient. When the approval process is more efficient, it signals to developers that it’s a less risky process, meaning that more housing developments will be able to exist. 

Anyway, again, some of the developers that I cited in the research report mentioned that they specifically avoid the Land Use Commission process because it does take longer and it opens them up to greater risk. With lower risk, more housing, obviously with more housing, it will reduce the prices.

Akina: Well, I’ve spoken with many developers, and in exasperation, many raise their hands and say, “We should completely eliminate the Land Use Commission.” Now, we don’t take that position at the Grassroot Institute. We have looked at various options for modifying, or reforming, the Land Use Commission. You discuss some of these in the report. What are some of the ways we could reform the Land Use Commission in order to spur on more housing supply?

Grubbe: Again, I do not think that eliminating the LUC is the correct option. I think that what could be done, first, is to give the counties the authority to handle petitions for the district boundary amendments, those reclassifications that have to do with agricultural and urban land. I don’t think that the county should handle conservation land. I think that that’s what the LUC should be retained for. When talking about these policy proposals, it’s important to distinguish what the counties will end up doing and what the Land Use Commission will end up doing.

In my report, I say that the Land Use Commission should be retained for conservation lands, important agricultural land designation, and, again, other natural resource issues like potable water availability. I think that the LUC is better equipped than the counties to handle the larger statewide issues. But I think that in terms of redistricting certain parcels of land for individual developments, that’s something that the counties can take a workload off of the back of the LUC.

Akina: Not only that, they’re closer to the developers and the people on their islands. They’re able to be more responsive and create a more efficient process of permitting development. I like the fact that you point out that the Land Use Commission, if freed up from the other duties that the county should be doing, would be able to pay more attention to conservation. That’s an important point, that Land Use Commission reform doesn’t need to be a step backwards from conservation but can actually be something that spurs conservation forward, which I think it’s an important value throughout the islands.

Grubbe: That’s in line with what the original purpose was, because these subdivisions in the ’60s and ’70s were blowing up everywhere. Again, being built on lava fields and things, where they absolutely should not be built. I think that’s going back to the core of what the LUC was all about. It’s just looking at those broader-picture perspective things, but since the counties have become better at planning and permitting issues, those more local issues, it’s just more efficient to have counties handle a little bit more and for the Land Use Commission to stay focused on that bigger-picture perspective.

Akina: Jackson, what are some of the more notable attempts at reforming the LUC that have taken place in the past?

Grubbe: In 2015, Senate President Kim introduced a bill to eliminate the LUC altogether. Again, I don’t think that that was the right move, and that bill ultimately failed. Aside from that, I think it’s the association of counties [that] introduces a bill every year to increase the acreage at which the LUC gets involved in district boundary amendments.

Akina: This is quite an interesting subject. I’m interested, Jackson, in knowing how you got involved in studying the Land Use Commission and the related issues.

Grubbe: Sure. I guess the start of it all was that I worked on a political campaign doing policy research. That led me to housing and just the issues involved with that, because it’s the biggest issue in Hawaii. In addition, the land use as it’s associated with environmental impacts and infrastructure, all those things play in together. When I came to Grassroot Institute, I took my experience and I expanded on it. I wanted to learn more about housing and land use. Again, it’s not very glamorous of an issue to other people, but I find it fascinating because what’s more important than land use? Everything is land, and it’s especially important in Hawaii.

Akina: Absolutely. We care very much at Grassroot Institute to “malama the aina,” which is an important value held by the people of Hawaii to care for the land. At the same time, as we care for the land, we care for the people, that there need to be places for people to live, where they can afford and thrive and have that relationship with the land, the aina, that is so important. 

Before we go, can you discuss how some of our policy proposals may actually empower or impact the supply of housing, land available for the development of housing? How does it work, the nuts and bolts of that?

Grubbe: Sure. I didn’t even get to the second proposal. The first proposal I mentioned is give the district boundary amendment to counties for agricultural and urban designations. The second would be to just increase the acreage at which the LUC gets involved. Currently, that cutoff is 15 acres, but I proposed — and other bills that were proposed last year — suggested that we should make the acreage cutoff 25 acres. While it’s not a perfect solution, it does increase the cutoff for when the LUC gets involved.

How that translates into measurable results for the people of Hawaii is that, with more efficient land-use regulations, more housing will be able to be built. That’s because developers will have less risk. More deals will go through, there will be less stifling, less failed projects, essentially. Ultimately, that will result in more housing. With a higher supply of housing, it should drive down prices overall.

Akina: Some who care deeply about the environment as well as the pono use, or the proper use of the land and respect for Hawaiian culture as well, were very concerned with the Legislature starting to talk about increasing the 15-acre rule to allow the Land Use Commission to come in at a later time with a larger amount of land. Our proposal is somewhat different, but what would you say to those concerns? How can we allay those concerns?

Grubbe: Just by increasing the acreage doesn’t mean that it’s going to be subdivisions everywhere, destroying all the natural resources. I think there absolutely is a balance. That’s why I think that the LUC should be retained for those environmental concerns. It’s a matter of how large the 25 acres is, for example. The difference between 15 and 25 acres isn’t substantial in the sense that it’s not going to affect the entire state. It’s not a point where the state needs to get involved. Again, a more efficient use of resources is different from attacking natural resources. 

I want to be clear: The national resources are absolutely essential to Hawaii and what makes it great. I don’t think that these changes will result in widespread construction going through those conservation lands. I think that it’s just a matter of placing housing more efficiently. For example, since only 5% of the land currently is designated for housing, if you increased the amount of land available for housing in Hawaii by 1 [percentage point], proportionally, that’s a 20% increase.

Akina: That’s an important topic for us to discuss. It’s an increase that will make a massive difference in terms of providing more housing availability, and yet, it’s not something that’s going to impact the environment. It’s something we can manage. 

One note I’d like to make as we close here is that you mentioned earlier that, if a proper division of labor is struck between the counties and the Land Use Commission, the Land Use Commission can spend more energy and focus on conservation, which is one of its major purposes. We shouldn’t be too afraid of some of the reforms that we’re suggesting.

Before you go, Jackson, I just want to thank you so much for being here today and for working on the team of the Grassroot Institute. Can you just share with our viewers a little bit about why you value working on the Grassroot Institute and what you’re doing for Hawaii?

Grubbe: I got interested in Hawaiian issues just because I lived there, and I enjoyed my time there. I hope to return. I recently moved, actually. I am currently in Virginia. I just, I want to give back to the people of Hawaii. I see my work doing research and handling these very difficult issues that ultimately affect housing and land use, which are so important to Hawaii, as a way of giving back. I hope to make Hawaii my home for the rest of my life.

Akina: Great. Jackson, thank you for being with us. To everyone viewing today, we’ll see you next time on Hawaii Together on the ThinkTech Hawaii broadcast network. Until then, aloha.



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