Testimony: Counties need more incentive to reduce housing regulations

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration March 31, 2022, by the Senate Committees on Government Operations and Housing.

To: Senate Committee on Government Operations
      Sen. Sharon Y. Moriwaki, Chair
      Sen. Donovan M. Dela Cruz, Vice Chair

      Senate Committee on Housing
      Sen. Stanley Chang, Chair
      Sen. Dru Mamo Kanuha, Vice Chair

From: Grassroot Institute of Hawaii
           Ted Kefalas, Director of Strategic Campaigns


Comments Only

Dear Chair and Committee Members:

The Grassroot Institute of Hawaii would like to offer its comments on SCR231, which has the admirable goal of bringing housing demand and development projections into county land-use plans for the purpose of encouraging the counties to better address the housing shortage.

The resolution is correct in identifying land-use plans as one of the factors stifling housing growth in our state. 

In creating these plans, local officials do their best to solicit input from a wide variety of stakeholders, but some groups, such as renters, tend to be underrepresented. 

The result is often a plan that strangles growth through additional regulation or limitations on development. 

While those involved are aware of the need to address the housing shortage, the end result is not consistent with that goal. 

For example, in September 2020, the Grassroot Institute submitted testimony to the Maui Planning Commission regarding the West Maui Plan. In that testimony we noted that since the plan was established in 1983, it had grown from 59 pages to 168 pages. Much of that growth included legalistic language that would create more regulatory barriers to housing. 

Our testimony continued:

For example, the word “shall” appeared four times in the 1983 version of the plan, but that grew to 61 times in the June 2020 draft. This unrestrained use of the word “shall” could cause confusion among developers trying to navigate the many layers of Maui’s regulatory environment, especially since in some cases where it’s used it seems to usurp the Maui County Code.

For example, the current draft of the West Maui Plan states that in the Lahaina National Historic Landmark District, “New buildings shall be limited to 30 feet in height,” but the Maui County Code limits building heights to 35 feet in Historic District 1 and 2.

Similarly, use of the word “require” has increased over time, from six instances in 1983 to 19 in the June 2020 draft.

Under the circumstances, it is no surprise that as county plans have ballooned with more restrictions and conditions, the growth of housing in our state has slowed.

This resolution provides a good starting point for the counties to reevaluate their approaches to land use. 

However, merely asking the counties to account for growth may not be sufficient to accomplish real change. It may be necessary to require the counties to specifically identify and remove restrictions and barriers within those plans that frustrate development of the growth of new homes and rental properties.

The Grassroot Institute has issued several publications that analyze how zoning and other regulations throttle the growth of housing. One was our policy report “Reform the Hawaii LUC to encourage more housing,” which advocates giving the counties more authority to make decisions, thus reducing the amount of bureaucracy and preventing the state Land Use Commission from becoming a de facto state zoning commission. 

Another was “Build up or build out? How to make housing more affordable,” which recommends “increasing the area of urbanized land and building marketable densities outside of the existing urban footprint,” which currently is about only 5% of all land in the state.

For example, an increase of only 1 or 2 percentage points in Hawaii’s urban-designated land would be equivalent to a 20% to 40% increase, respectively, in lands available for more housing.

In addition, the institute has made available a zoning-reform toolkit, “How to Build Affordable, Thriving Neighborhoods,” which explores different ways to increase housing supply and improve affordability by reforming state and local zoning restrictions. 

We summarized many proposals from the toolkit in a commentary published in The Maui News, ”50 ways — at least — to update Maui’s zoning code.”

For the moment, counties have little incentive to reduce regulations or rethink their land-use plans. As experience demonstrates, municipalities can be reluctant to change zoning and land-use laws, or may do so in a haphazard way that will not achieve the objective of spurring housing growth. 

In the end, it may be necessary for the Legislature to step in and put limits on the types of zoning and land-use regulations permitted to the counties.

Nonetheless, this resolution is an important first step towards addressing the state housing crisis and we commend the Legislature for recognizing that one of the primary causes of the state’s housing crisis is regulation that stifles development. 

Thank you for the opportunity to submit our comments.


Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii

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