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Churches and other nonprofits represent housing opportunity

Allowing churches to build on land they own could help alleviate the shortage of affordable housing in Hawaii. But churches are finding it hard to do so because they are subject to the same rules as typical homebuilders, and must navigate all the same permitting and zoning approvals. 

Should that be the case? 

Ted Kefalas, director of strategic campaigns for the Grassroot Institute of Hawaii, doesn’t think so. Speaking with H. Hawaii Media radio host Johnny Miro on Sunday, he said Hawaii is notorious for its labyrinthine layers of housing regulations, which can make turning a piece of land into a house take 10 years. 

He said when red tape and delays increase the cost of homebuilding, many churches cannot move forward because most of them lack the deep pockets of a professional developer.

Kefalas said California, Gov. Gavin Newsom recently signed into law what is now known as Yes in God’s Backyard. The law streamlined the state’s permitting and zoning laws to make it easier for religious organizations and nonprofit colleges to build affordable housing on lands they own. He said it is estimated California’s new YIGBY law is going to free up some 170,000 acres of land for low-cost housing.

In Hawaii, a similar bill, HB 814, would have allowed nonprofit churches, schools and even healthcare providers to build housing on lands they own, but the bill did not pass. 

Kefalas said one of the hurdles Hawaii churches face is that if they are over 50 years old, they are labeled historic. As such, they fall under the state Historic Preservation Division’s rules, which often can prevent any meaningful redevelopment.

“But that’s kind of ironic,” Kefalas said, “because if we don’t allow churches to figure out how to best use their property, we’re going to see a lot of them abandoned, like the six, seven thouands churches on the mainland closing their doors every year. So let’s allow charitable organizations to do what they do best, and that is serve those in need.”

11-19-23 Ted Kefalas with Johnny Miro on H. Hawaii Media radio network

Johnny Miro: It’s time for Sunday morning public access programming on this H. Hawaii Media radio station. It’s another beautiful Sunday. Welcome into our Hawaii public access programming on our five H. Hawaii Media radio stations here on Oahu at 101.1 FM 100.5 FM, 97.1, FM 107.5 FM and 96.7 FM.  

I’m Johnny Miro, and once again, joined by a member of the Grassroot Institute of Hawaii, grassrootinstitute.org. For more on that, it’s Ted Kefalas, director of strategic campaigns with Grassroot Institute of Hawaii. Good Sunday morning to you, Ted.   

Ted Kefalas: Hey, good morning, Johnny. Thanks for having me. It’s always a pleasure to speak with you.  

Miro: Well, you had an important discussion and I just wanted to amplify that once again on our five stations. It’s about housing, which is very, very important. You guys touch on that a lot. But this is church properties, making that available to make housing, I guess, more accessible. And you recently spoke to Rev. Joshua Hayashi to discuss how church properties could be leveraged to alleviate Hawaii’s housing shortage. 

So, with that, to start off, help our listeners understand, Ted, just how many state and city approvals do you typically need to build housing on a church’s property?  

Kefalas: Yeah, well, Hawaii has some of the most burdensome housing regulations in the nation. On average, it takes a little over 10 years for home builders to turn a piece of land into a house. And sometimes that means it takes even longer.  

There’s about six layers of housing regulation in Hawaii. You have the state Land Use Commission, the island plan, the community plans, county zoning, historic district and special management areas. And to be quite honest, that’s a lot of layers to have to get through for someone to build a house.  

You know, everyone wants to point fingers at somebody else for driving up home prices; things like foreign or mainland buyers, empty homes, short-term rentals. And, you know, I’m not saying that those things don’t have any impact on prices, but they’re used as kind of a sort of bogeyman that ultimately takes our eyes off the ball. 

You know, these strict rules and regulations are the main reason why Hawaii has the highest median home prices in the nation. Because we’ve severely limited the supply of housing.  

You know, Johnny, in economics, there’s a law of supply and demand. And rather than trying to focus on limiting the demand side, we need to do more to focus on increasing on the supply side. 

The state House of Reps here in Hawaii, they’re actually convening multiple working groups in response to the Lahaina fires. The Housing and Shelter Working Group just met on Friday. One of their main recommendations is actually to reduce a lot of these zoning and regulatory barriers. So we’re glad that a lot of our elected officials are starting to understand the impact of some of these rules and regulations. 

Miro: Yeah, it sure does seem like they are. Ted, how difficult is it for churches to navigate all the necessary permitting and zoning approvals or something like this?  

Kefalas: Well, you know, I mentioned the six layers earlier, and it is no different for churches, synagogues and other nonprofit organizations to build housing.

First of all, you have to consider most churches would be labeled historic, and that means they would fall under the state Historic Preservation [Division]’s rules because they’re over 50 years old. That also means construction requires specific work. So that’s a huge hurdle.  

Another thing to consider with religious properties is a lot of times they have graves on them. So there’s really nothing that can be done with those properties.  

But that is to say that not all churches have these challenges. I guess one question we have to ask ourselves is: Should we subject these churches to the same rules as a typical developer?   

Keep in mind, Johnny, these are nonprofits that have been part of our communities for, you know, a lot of times, like, 200 years. These are our neighbors, and they’re right now just saying, “Hey, we want to offer, and help, we want to offer affordable housing.” And right now, we’re looking at them and saying, “Well, get in line.” 

This kind of housing is different, and so we have to really shift our mindset as a state. Understand that this is not some “get rich quick” scheme for churches. Churches are not professional developers, and they don’t want to be. 

Unfortunately, our current regulatory system is set up to kind of assume the worst out of any homebuilders, and that can sometimes make it feel impossible for someone that isn’t a professional to navigate, because of all the confusing legalese that a lot of regular people may not understand. 

So we need to really try to figure out how to get out of the way of groups that truly want to just help.  

Miro: Yeah. Ted Kefalas from the Grassroot Institute of Hawaii, grassrootinstitute.org, for the paper on this. If you want to read into this further.  

A lot of churches and community groups might not have a lot of cash available, Ted, to build housing. How do these regulatory delays affect a proposed housing project?   

Kefalas: Well, regardless of what kind of housing project it is, any sort of delay is going to increase the cost, either for the builder or for the buyer. Now churches may be doing this out of the goodness of their heart, but they also aren’t stupid. So if delays are going to increase the cost and maybe that means that they don’t move forward.  

One thing to keep in mind is that a lot of churches are in real financial distress, as membership numbers are continuing to decline. And that’s not just in Hawaii, that’s across the country. So they don’t have the big pockets that a professional developer might. And so, in order for things to be able to happen, we need to make it easier for these nonprofits to build affordable workforce housing.  

For example, you know, it would potentially take years to get through, I mentioned the state Historic Preservation [Division]. That’s just one layer. And, you know, as the old saying goes, time is money, and that holds true with housing.

When you look at the median price of a home back in 2019, that was at under $800,000. And today, as most people know, our median home price is around a million dollars. So in just four short years, home prices have gone up around $200,000. That’s a huge spike and it shows you how a delay can really add to your cost between labor, building materials and so forth. 

Miro: Yeah. Have any churches, Ted, decided against building housing because of the uncertainty associated with the state and the city approval process? I can see that can be really burdensome.  

Kefalas: Yeah, so you mentioned it earlier. I had an opportunity to speak with Rev. Joshua Hayashi on our “Hawaii Together” ThinkTech broadcast.

Josh works as the CEO for Mission Management Co. That’s an organization that’s really committed to helping these kinds of projects succeed and get across the finish line. 

Josh confirmed that this was a problem for some of his clients. For example, there was a project in Waipahu that, because the church wants to retain ownership of the property and not necessarily do a lease, it would have taken six or seven years just to go through the regulatory process. So as a result, a lot of times churches will look at that timeline and they’re forced to say, we can’t do that because we won’t be able to see it to fruition. 

As I mentioned earlier, you know, it usually takes about 10 years. So that six or seven years is actually an accelerated timeline. But even then, the church that we can’t do it because we won’t last.

You know, there’s another church in Kailua that has a very similar story. And it’s a real shame that we don’t allow more of these projects because of the potential for affordable housing in our city centers.  

All too often, we typically build affordable housing outside of the city center. You know, I’m talking about, like, in Wahiawa or whatnot. But churches are in some of the most prime locations, and that’s a huge gift that we need to take advantage of. We have an opportunity to make this a community again, and the church can really be at the center of it.  

And I mentioned churches a lot here, Johnny, but this isn’t just for churches. This is something that can help schools, it can help healthcare facilities, hospitals. We need more teachers, nurses, people that can help our communities. And so what better way than helping facilitate more affordable workforce housing for these people.  

Miro: Yeah, and surprising, we’re getting an example in California from the governor, Gavin Newsom, who recently signed a “Yes in God’s Backyard” [bill]. That was signed into law. Now, can you give a breakdown on what that actually does?   

Kefalas: Sure. So back in October, California legislators passed what has become known as Yes in God’s Backyard. So, and that essentially streamlines the state’s permitting and zoning laws to just make it a little bit easier for religious and higher educational organizations and institutes to build homes on lands that they own.  

Essentially, the bill ensures that churches and nonprofit colleges can build this sort of affordable housing on their land without having to go through an expensive or difficult rezoning process. As we know here in Hawaii, a lot of times these projects get held up at these different layers. And that’s what ends up stalling a project and increasing costs.  

The bill in California also rezones properties so that it makes sure you don’t have to go through all of these layers anymore. You don’t have these local political processes that can be abused by what we call NIMBYs, the “not in my backyard“ crowd, that oftentimes will come out and stop a lot of these affordable housing projects. 

You know, in California, this bill, I think they estimated that it’s going to free up about 170,000 acres of land that now can be used for affordable, low-cost housing. But I do want to stress, you know, this isn’t the only thing California did. They enacted a few other recent housing reforms in the state, you know, things like allowing up to four homes on a single-family zoned lot. 

They also are allowing the construction of more ADUs [accessory dwelling units] that can be used as rentals.   

All of these kinds of reforms really reflect a growing acceptance of what we’re calling the “yes in my backyard” philosophy, or YIMBY, as opposed to the NIMBYs and the “not in my backyard” folks. And it’s really encouraging to see California pass this law. It shows that legislators around the country are starting to recognize that permitting barriers, zoning regulations and whatnot are some of the chief contributors to the housing crisis, no matter where you live.  

But I do kind of want to ask that if we recognize that these are barriers, why are we limiting these reforms to only nonprofits? I think it would have a much greater impact by opening it up to all property owners.  

But shy of going that far — I mean, I understand that that’s a giant leap — so we should at least look at liberalizing some of our zoning and adopting “by right” permitting. And some of your listeners may ask, “Well, what does that look like?” 

Well, to start, we should get rid of single-family zoning, get rid of parking requirements, minimum lot sizes and floor area ratios. We also need to allow more apartments, duplexes, condos and what not. 

We’re not going to be able to solve our housing crisis building single-family home by single-family home. We have to diversify the types of homes we’re going to build if we want to solve that.   

Miro: Director of strategic campaigns Ted Kefalas from Grassroot Institute of Hawaii joining us this morning and breaking down the, once again, an issue with housing, but church property is being talked about, [to] be utilized to help alleviate that in some way.  

And Hawaii, there was a similar bill proposed last year to the one we just discussed about California that would have allowed religious nonprofits, healthcare facilities and schools to build housing on their property “by right,” which you just talked about. It made it through the House but stalled in the Senate. Now what kind of objections did it face, Ted?  

Kefalas: So, the bill you’re referring to, I think, was HB 814. That would have essentially done the same thing as California’s “Yes in God’s Backyard.” It would have allowed nonprofit churches, schools and it even expanded to healthcare providers, to build housing on land that they own.  

There were certainly some mixed reactions, which is to be expected when a bill is first introduced. I mean, sadly, Hawaii legislators rarely pass a bill on its first attempt for whatever reason. But I know that with this particular bill there were some concerns about the large amount of land that the LDS [Latter Day Saints] and Catholic churches own.   

But again — and I don’t want to speak for them — but I highly doubt that these churches want to be in charge of building the next Times Square. That’s not financially responsible for their members. And so I think we have to be serious here and give these nonprofits opportunities to step up to the plate and help make a dent in our housing crisis. They’ve been pillars of our communities, and it’s strange to me that we’re not giving them the benefit of the doubt when it comes to housing. 

Miro: Now Ted, is this solely a state issue? Or can the counties do something about this? Are they attempting to do something about this?  

Kefalas: Oh, yeah. I think the county certainly could and should be key in this sort of reform. But unfortunately, they have not really taken the lead, as I was alluding to earlier. And so that’s why the state really needs to insert itself. I mean, there are, like, five or six projects right now that would be able to break ground pretty immediately, but they are sitting and stuck in the permitting process.

I mentioned it earlier, but similar to the state Historic Preservation [Division], the counties also have [cultural resources commissions], and so those are two of the regulatory entities that take probably the most time to get through. Unfortunately, both the [state] Preservation [Division] and the [county] planning departments a lot of times don’t want these churches to build housing because then it won’t look like that same historic building.

But that’s kind of ironic because if we don’t allow churches to figure out how to best use their property, we’re going to see a lot of them start to be left abandoned, like we’re seeing with churches on the mainland. 

And so I know it seems kind of hard to comprehend for some folks. But, you know, there are six, seven thousand churches that are closing their doors every single year on the mainland. And that’s going to continue to happen as membership numbers dwindle. So in my mind, let’s allow charitable organizations to do what they do best, and that is serve those in need.  

Miro: All right, Ted, I’ve heard, and I actually also read into the piece on the Grassroot Institute of Hawaii, Grassroot Institute of Hawaii, about the project where a church on Maui wants to put up temporary shelters on their land. Now, what are the prospects for that? And once again, the article is available at grassrootinstitute.org.   

Kefalas: Yeah, it’s called the Ohana Hope Village, and so it’s a nonprofit Family Life Center and the King’s Cathedral in Kahului. They’re actually partnering to put up about 85 modular homes on 10 acres of the church’s land and the King’s Cathedral land is actually zoned agricultural, which typically only allows two houses on two acres. So that would have limited the project to just 10 homes. 

But because the emergency proclamation is in place after the wildfires, Ohana Hope Village was able to get an exemption. I think the project is actually in the process of getting a temporary structures permit right now. 

But in normal circumstances, a housing project like this would have to go through a time-intensive process, like I’ve already outlined, and undergo a public hearing a lot of times just to get these permits. 

And, after submitting documentation and paying impact fees, there’s no guarantee your project’s going to pass the commission. Let’s say a few of those NIMBYs that I mentioned earlier, if they come out in opposition, your project could be hanging by a thread.

So I do want to note, though, that the Ohana Hope Village homes are being used to provide temporary shelter for Lahaina residents displaced by the wildfires, and they’re planning to offer these homes rent-free to families. So again, I think we need to stop assuming the worst when it comes to development, especially when it comes from our community partners that have been in our neighborhoods and with us for years.

Miro: All right, Ted, is there anything else you’d like to add as we finish things up here on this Sunday? Thanks again for joining us here.  

Kefalas: Well, I always preach this when I’m with you, Johnny, but I hope your listeners will continue to get involved. We are truly in a housing crisis and we are in a fight for our lives to stay here on the island that we love and call home. Oftentimes a few NIMBYs can come out and kill a project.

But we have an opportunity to band together and show our legislators that this is something that we want, and I hope that if you agree, you’ll make it a point to reach out to your legislators and let them know it really does make a difference. And I can assure you that your elected officials do want to hear from people like you, whether it’s an email, a call or an in-person meeting. 

Now, if you aren’t sure of how to stay up to date with everything that’s happening. I would encourage you to sign up for our weekly newsletter by going on our website. Johnny, you mentioned it earlier, but it’s grassrootinstitute.org. 

Miro: And when you go there, you’ll find the conversation that he had with Rev. Hayashi on this — “Hayashi on a mission to help Hawaii churches provide housing,” — and also he has the one up there, “Maui can take the lead in ‘Yes in God’s Backyard Housing.'” It’s under the heading Housing, Land Use and Zoning. Housing, Land Use and Zoning. Great reads right there, very informative and always available for you at Grassroot Institute.  

Well, Ted, once again, a really enlightening discussion. I hope to be speaking with you soon about something of importance just like this. Enjoy the rest of your Sunday and appreciate you spending some time with us. All right. 

Kefalas: Thank you, Johnny. As always, have a good one. Aloha.  

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