The following is the complete transcript of the Grassroot Institute of Hawaii-sponsored luncheon event in Honolulu on Nov. 1 on “How to speed up permitting in Hawaii,” featuring Grassroot staffers Keli‘i Akina, president; Joe Kent, executive vice president; and Ted Kefalas, director of strategic campaigns, plus Honolulu City Council member Tyler Dos Santos-Tam and Holu Hou Energy President Ted Peck.
The basis for the event was to discuss Grassroot’s new policy report written by Grassroot policy researcher Jonathan Helton, “Seven low-cost ways to speed up permitting in Hawaii.”
The last portion of the presentation was devoted to audience members sharing their stories and insights concerning Hawaii’s permitting problems.
To listen to the audio of the event, click on the image below. The transcript follows.
10-30-24 Permitting presentation, Honolulu, featuring Grassroot staffers Keli‘i Akina, Joe Kent and Ted Kefalas, plus Honolulu City Council member Tyler Dos Santos-Tam and Holu Hou Energy President Ted Peck and audience members sharing their stories and insights.
Joe Kent: Before I jump in — and we’re going to try to do a minute on each one of these — I just want to say I’ve been having a lot of people come up to me saying, “What you guys are doing is so brave. You’re speaking out on this. You’re so brave.”
And I realize what they’re saying is that … Well, first of all, I’m not brave. [laughs] I’m OK to speak out about this because I don’t have a permit going through right now. But there are so many people that do have permits going through and there’s a culture of fear to speak about this issue.
So that’s just a general comment. Hopefully, we can help air out the conversation on this.
So, the first item here is preapproved plans. And basically, you should be able to walk into a permitting department and grab a plan off the shelf, and be able to get it permitted quickly. They’ve actually done this on the Big Island where we just were this Wednesday, and people were talking about how fantastic it is there to be able to do this.
They’ve had — what? — a few, 70 or 50 homes already that have been done this way, and now they have a bill to do multifamily homes this way as well.
Ted Kefalas: Yeah, and that’s huge. I mean really, it’s about trying to pull people out of the permitting line, right? And so, being able to have these sorts of preapproved plans that the boxes are already checked, people can, as Joe said, just go pull the plans off the shelf, makes it a lot easier.
I also want to just highlight, so a lot of you guys know we passed SB3202 this year — the ADU bill. Well, in talking with a lot of architects and whatnot, they have told me that they actually don’t like creating plans for ADUs. It’s a money-loser for them.
So they would actually prefer to just have a set of preapproved ADU plans at the county. They can come and people can just pull the plans off the shelves rather than them having to continuously go back and forth with the county on a small little project.
Right now, Honolulu and Kauai are the only two counties that don’t have preapproved plans in existence.
Kent: So, another way to clear out the backlog is pretty obvious. Just why do we require so many things to be permitted if we would just exempt simple things like basic home repairs? And you could set a cap. You know, there already are caps like this, and Honolulu actually just raised their cap last year.
Kefalas: Yeah. So it was Bill 56. It was brought in by councilmember [Andria] Tupola. And Bill 56 essentially raises the threshold in Honolulu.
So, used to [be] if a project was over $5,000, you had to get a permit. That threshold has now been increased to $10,000. And for things like plumbing or electrical work, it bumped up from $500 or $1,000 to now $2,500. So, you know, small incremental changes.
As Joe mentioned, we were in Hilo on Wednesday. They, as you can see, are probably the lowest right now, but they actually have a bill that’s being considered — it’s Bill 212 — which would bump that $7,500 number up to $25,000. So that’s a huge increase. It’s something that we think is needed.
I mean, if you just look at the Home Depot website and get some estimates for a counter installation-repair, that’s going to run you, in most cases, over $7,500. In some cases, over $10,000.
So, you know, we need to just continue to find ways to, again, pull people out of line. Because we don’t need to give the same level of scrutiny to projects that are repairing a fence or installing a countertop versus building a 20-story condo.
Kent: And along that same line, if we could just exempt solar projects or make solar projects quicker. About a third to nearly a half of all the projects sitting in the queue are PV-related. And so, if we could find a quicker way.
Well, it turns out there is a quicker way. It’s called SolarAPP+. They use this on the mainland. And there’s an interesting chart in the report that shows that has gotten it from 30 or 50 days down to zero days for the approval of those PV units.
Kefalas: Yeah. I mean, just to highlight that, there’s 31 cities that they looked at that have adopted this SolarAPP+ or similar software; 31 cities that had decreased times in their permitting departments because of this.
So, there was actually a bill last year at the state level, HB 2614, that would have required all four counties to have some sort of SolarAPP+ or similar software. Unfortunately, that bill died. But from what I’ve been told, there’s conversations to reintroduce that bill again this year. And as well as opportunities to work at the individual councils to pass legislation as well.
Kent: Now, permitting leads to a lot of interesting stories. Like, let’s say you have a neighbor and the neighbor doesn’t like you, and tries to go … he snoops on your property and notices there’s an unpermitted shelf or something, or garage, or fence or something on your property, and reports it to the department.
And now the department has to send out a notice of violation and says you have to fix it before a certain day, otherwise you’re going to rack up civil fines.
We hear about these stories all the time, and why not make it easier to permit unpermitted units?
Well, there is a process to permit on permitted uses, but it’s twice as expensive, three times as expensive.
And in California and other places, they have created amnesty programs to actually make it easier to get unpermitted things permitted, grandfathering, amnesty types of things. So if you get it inspected, if it passes an inspector, then it is automatically permitted.
Kefalas: Yeah. And let me just highlight, you know, I mean, this is not some sinister plot that people are, you know, not getting permits and wanting to create slums. But the reality is they’re not getting permits because the wait times are too long.
If you’re an individual, you don’t have a year-long-plus to wait to get your permits. So, I mean, a lot of us probably know people that have unpermitted work. You know, I have a couple of friends — and Tyler, cover your ears — but you know, they actually bought a home and wanted to renovate his ’70s-style kitchen. And after wait and wait and was pushed off by DPP [Department of Permitting and Planning], he finally said, “I’m just going to do it myself.” And that’s what he did.
And he still hasn’t gotten any sort of approval from DPP, but there’s really no incentive currently for him to get back up to snuff and get permitted because if he tries to go to the county and says, “Look, you know, I did this, I’m sorry,” asks for forgiveness, they’re gonna slap him with three times the normal building permit fee.
And so, you know, I’m sure as any of us would do, he’s probably going to stay under the radar after, you know, even though I just kind of put him on a blast here in front of everybody.
[laughter]
Kent: Ok, zipping along. I always tell this story about going to Johns Creek, Georgia. They have a permitting department there with zero permits in the queue.
And I asked the director, “What’s the average wait time for a permit there?” And they said, “One day, two days, max. For a big hospital or something, maybe 30 days.”
So I said, “How did you do that?” And he said they hire a private company whenever there’s a backlog.
So they bring the private company in, it clears out all the permits, gives them a bit more manpower, and when the permits are cleared, the company goes bye-bye and leaves it back to the civil service workers.
Now in Hawaii, we have a law that prevents private companies to be used for work that is typically done by government workers. And that makes it difficult to privatize processes.
But they did do one in Lahaina through the emergency proclamation, and Bill 21 there on Maui; they created a private permitting office that reduced the wait times from 200 days down to around 50. And so it can be done, but we just have to think creatively.
Kefalas: And so, as you can tell, I’m a pretty tall guy. I love basketball, it’s probably my favorite sport, even though I was a football player.
But I want you guys to imagine you’re watching a basketball game, right? And one team gets the ball after the tip-off and then just holds the ball for the entire game. Nothing happens. That’s a pretty boring game, and I think people are going to be asking for their refunds. Well, the same kind of thing happens in our permitting departments where nothing is getting done.
So, we need to figure out a way to introduce a shot clock to speed things up. That’s exactly what a shot clock does in basketball, making sure that people are still playing the game. You’re actually trying to score. We need the same thing in Honolulu and in our other counties.
So, this is not some radical idea. It’s something that states like Florida, Arizona — I think even California has shot clocks. So we are hopeful that either the state or the counties will look to introduce a similar measure this year.
Kent: And finally, fees. Permitting fees have increased faster than inflation. So, it’s getting more and more expensive to permit things compared to inflation. And so, why not knock the fees down?
But this one, coupled — see, the thing with all of these seven recommendations, you can couple them together like Legos.
So, for example, put a shot clock, and if the shot clock runs out, then reduce the fees, right? Or maybe it’s free. Or maybe a shot clock and then if the time’s up, then you can have it self-certified or something.
So, through creative snapping together of a lot of these policies, we can make a policy that makes sense for each jurisdiction here in Hawaii.
So that’s basically it.
Kefalas: And that’s our presentation. I know a lot of you guys are probably signed up for our newsletter right now. But if you’re not, you can scan this QR code here, it’ll get you signed up. And we send those newsletters out every other week right now. We also send out a “President’s Corner” [column].
We promise we won’t spam you. We just want to be able to get you informed and be able to spread the message as best as we can.
Keliʻi Akina: Excellent. Let’s hear it for Ted and Joe.
[applause]
And just as Ted mentioned, you can use the QR code or you can fill out the form that is on your desk, on your table, and turn it in.
As we continue, how did these issues get resolved by our leaders in government and in business? I’d like to introduce you to somebody who’s been a friend of mine for many, many years. We’ve known each other since he was a young single sailor, actually, here. He was actually, the executive officer on one of our nuclear subs.
And through his career in the military, in business, he’s gained a great deal of experience and knowledge, not only about energy, but about its application in the private sector.
Ted Peck was the head of the Hawaii Clean Energy Initiative. He was our state energy administrator, and he’s currently the president of Holu Hou Energy. And that’s focused on promoting state-of-the-art renewable energy and energy storage.
He’s also on the board of directors of the Hawaii Solar Energy Association. Long-term good friend, he’s going to share with you some of his insights into this issue. If, Ted, you want to come up to the table here, please?
[applause]
You can stand in front or stand back or sit down, whatever you want to do. Just grab one of the microphones.
Ted Peck: OK. So, I don’t know if I look as tired as I feel, but I am weary because I’ve been working in this space and I’ve been pushing against this issue for over a decade.
I’ve been in the solar industry really since about 2011. I ran the state Energy Office from like ’07 to 2011, so, a little bit of time doing this.
I’ve done about 75 power-purchase agreements for nonprofits and, you know, other small businesses that want to have third-party ownership.
And if you know me, I don’t shy from difficult challenges. I mean, I’m the nut that tried to buy HECO in 2011, right? Or one of the nuts. So this has been an exasperating intractable space.
Now, permits fulfill a couple of basic purposes, right? They are supposed to ensure that what is being built is both safe and to code, which are largely aligned, but two separate requirements.
They also ensure that what’s being built fits our zoning. Which means that, “Hey, we don’t want this kind of thing here,” right? And that’s how we shape our community, is via zoning.
And also, permits record what is actually built on that site, which also is an important requirement. We want to be able to go and more than a few times we’ve said, “Well, what’s here?” And we’ve gone to DPP to draw the plan so that we can know what’s built on that site.
So those are three very important purposes. The first one is really a foundational reason. But it’s important, I think, to say — and Bill 40 is trying to accomplish this — is that the professional engineers that approve and say that this is being built safe and to code, they are individuals who have gone and gotten a degree in engineering, which is no easy feat.
They have worked as an apprentice for four full years under another professional engineer. They took a test at the beginning of that process that said that they had some basic knowledge. And then at the end of that four years, they have to take another test that says that they have comprehensive knowledge. And then finally, the state certifies that yes, they meet all the requirements and are professional engineers.
Oftentimes, the reviewers at DPP are not professional engineers. So, the people reviewing the permits don’t have the certifications often of the people who are applying for them.
Oversight by an AHJ, an “authority having jurisdiction” is … One of the significant reasons is because there are bad players — people who go and build stuff that isn’t safe and isn’t to code.
We emphasize an upfront gate that we make everybody go through rather than, I think, give really enforcement power more to DPP.
You know, the Silva Dome? You all remember the whole murder thing out on the west side, it was all around some structure that was built and was unpermitted. And in the article about that whole thing, one of the things that DPP said is, “Hey, we have limited ability to do anything. We put fines against it and there’s outstanding fines in that building. But that didn’t mean anything to the owner. He could care less about what DPP was saying.”
So it may be better to move more towards, “Hey, you got to play right and have a professional engineer go ahead and approve the plans,” and then DPP really becomes a records organization rather than an approval organization.
And it’s got a significant impact in the delay of trying to get so many permits through a limited number of staff. I would stipulate that the reason why we had five people at DPP go to jail is because people got impatient, and tried to find a way around that line and get a front-of-line privilege. And there were some people who were unscrupulous that are no longer at DPP, that were willing to facilitate that. We don’t want that kind of backlog because it encourages that kind of bad behavior.
Bill 40 provides for PE [professional engineer] or architects who are also licensed by the state to attest to meeting the requirement of code and safety. Self-certification, which the AHJ can audit, is a clear pathway for removing the business and community impediments to getting the things built that we want to build.
I’m in the clean-energy space. We have a target out there, 2045, a statutory target, but that statutory target is really driven by the community saying, “Hey, we want to drive dirty fossil fuel out of our community.” That’s the real driver where there’s a statutory requirement. But really, it is a clear intention of the community to get low-sulfur fuel oil, which is practically solid at room temperature.
That’s what we today still burn for two-thirds of our electricity; it’s crazy. We have the opportunity to do that, but these barriers; I could tell you the HSEA [Hawaii Solar Energy Association] board is extremely frustrated because it seems like we are going up against walls and basically, pounding our heads into a pulp because we go and we get a bill signed and we get an ordinance signed, and then, we find that there are government employees, not elected officials, who are on board with doing this and on board with the will of the people, and not their appointees, but long-term government officials who — for reasons that I have not yet come to figure out — are simply unwilling to get out of the way and allow business and communities to move at a pace that we as a community have said we need to move at.
I hear all the time people saying, “Hey, climate is important. We need to move faster.” And yet, we spend an amazing amount of man hours, you know, labor hours, and effort trying to get these things through, and it is excruciating.
Now, I will give some credit to DPP because online permits — if there aren’t any issues — that does help us pull them. But one of the things we found is that AHJ’s, counties, will use solar permits as a stick to achieve other policy objectives — things like flood zone issues that the federal government pressures the AHJ on. Things like septic systems — which I don’t know, you know, it’s very technical, I know — but solar has nothing to do with a septic system in a house. But I will tell you that we can’t pull a permit on a house that has a septic issue because the AHJ basically uses solar as a stick to get the homeowner to do something. That needs to change.
I think I’ve said most of what I wanted to say here. One more point, which is — yeah, that’s right, we talked about that. Sorry, we’re working pretty hard, and so I did this all this morning.
Ah, one more point, and then an anecdote, short anecdote.
The building code, in general, is becoming the gathering place for various parties to exert their will on how we build. From zoning requirements to issues such as energy efficiency requirements, that all gets packed into the code.
I don’t know if you know how we do code here in Hawaii, but we have a Building Code Council at a state level. At a national level, people put together these codes for efficiency, for fire, for all these things. And then the state Building Code Council, their job is to look at all these national code recommendations and decide which of them are going to be applicable for us here. And then after a certain amount of time, the counties either have to modify that or it gets accepted as is.
The code is very complex and burdensome. And I would suggest that counties spend money to look at the code and make some decisions about what can get pulled out of the code because it’s becoming such that, you really have to be a high priest of code in order to be able to say what’s in there and what’s compliant, and it’s very difficult for people to do that without some kind of “gotcha.”
Then my last anecdote — I know my time’s up — is we put together a solar project for a customer. It took two years. It wasn’t a complex project, it had a battery. It took two years, I think, three reviews for us to get it to the point of approval.
We’re at the point of approval. And we had gotten — there’s a thing called, uh, something where you can build at your risk after you’ve submitted for an application, and not get a penalty. The reviewer found that the one sheet that he hadn’t scribbled all over, the stamp on that sheet had expired. All the other sheets were stamped by the same engineer, and they showed the current stamp. But he kicked that one back — something that he had already approved — because the stamp was expired.
It took two months for that to get fixed. And that two months cost the customer, the small business, over $10,000, OK? Because he had a system that wasn’t producing power for him. He was paying a bill he shouldn’t be paying, and he was paying interest on a loan.
So, there should be pathways to not have to do this. We really need to get smoother. Thank you.
Akina: Good job, Ted. Thank you very much.
[applause]
I’ve got a question for you. Before I ask my question, let me ask the other panelists to please come to the front, including Tyler, if you’ll take a seat up front over here.
Ted, you just described the horror story. And you said in your comments, really, that government regulators at the customer service level — and it should be customer service — are actually behaving in a punitive way. They’re actually behaving in a way that is a power play.
What could change the system to turn all of that into the kind of customer service it should be?
Peck: In brief, a problem is that there are — we see this in the solar industry — people who aren’t even a member of HSEA who are bad actors. And it’s a few bad actors that really colors the perspective of our civil servants who are trying to do their job. And they extrapolate that bad behavior over the entire industry.
And it’s understandable because 80% of your time is taken by the 20% who are the problem, right? Or 95% by the 5% who are the problem. So it’s really ultimately a trust issue.
Akina: OK. Well, thank you. And we’re going to be working on that.
Now, I’d like to introduce to you to continue giving insights as to the problems with permitting, as well as perhaps some of the solutions, someone who’s known as a go-getter, someone who’s known for his ability to identify a problem, go after the problem, and solve it.
He’s currently your Honolulu Council member, but he has a wealth of experience in issues related to construction and permitting. He was the executive director of the Hawaii Construction Alliance. And that’s where he brought unions together with community groups, other stakeholders, average consumers, and so forth.
Good friend of Grassroot Institute. We work together on many issues. Tyler Dos Santos-Tam. Tyler, aloha.
[applause]
Tyler Dos Santos-Tam: Thank you. I’m just going to sit down. I’m going to keep Ted company down here at the table because I think we’re going to have our other panelists up here.
But I’m grateful to be called a friend of the Grassroot Institute because what Keliʻi didn’t mention is, prior to being on the Council, I was the chair of the Democratic Party for the state. And so this issue of permitting …
Akina: I didn’t mention it.
Dos Santos-Tam: [laughs] This issue of permitting brings together people from across the spectrum. And it’s because it is a crisis. And we all know that, that’s why we’re all here.
I want to echo a lot of what Ted said. And I think that a few of the things that he mentioned are really key. We have permitting for a reason. This is not a free-for-all, and I don’t think anyone’s asking for it to be a free-for-all.
We have this to protect public health and safety. We also don’t want to encourage people to act illegally and come back later and ask for forgiveness.
And when I was at the Construction Alliance, we would see bad actors. And sort of in Ted’s last comment here, there are people who are so frustrated with the process, there are people who have studied the code back and forth and know all the ways around it. And these people are often the ones who are backing things up for everybody else.
We saw this — one of the previous things that I had worked on also in the past is I started a group called HI Good Neighbor, which is combating the monster home phenomenon. I see Carole Kaapu in the audience. Her neighborhood is overwhelmed with these monster homes.
And they [the monster-home builders] would use every available pathway to get around the permitting process. They would go through third-party review with corrupt third-party reviewers, some of whom are in prison right now.
They would utilize things like the owner-builder exemption in really clever ways. They would have the contractor buy into the home and thus become a part owner and thus be able to use the owner-builder exemption. There’s lots of ways around this, but this gets to the core of the issue, which is it takes so long that people are desperate to get around it.
And so, what I think that this report and all of our discussions need to be based on is recognizing what we really want. We want a system where there’s certainty. We want a system where we know what the expectations are. And whether that’s a 60-day shot clock, where you know you get it in 60 days or not, I think that’s a reasonable thing to expect.
This issue also, let me say one other thing before I dive into what I think is one of the core issues. This is decades in the making. This did not happen overnight, and we as a community, the collective “we,” allowed this to happen.
And we didn’t do enough to stop it. And a few of the issues that aren’t going to be solved overnight include hollowing out of the staff at DPP.
As Ted mentioned, many of our plan reviewers and inspectors aren’t engineers. It’s very difficult to expect them to be engineers when the private sector is willing to pay $50,000 or $60,000 more for an engineering position than the city is for a building inspector.
We also have a number of bureaucrats in there, many of who I’ve worked with and sort of fight against sometimes, who do gatekeep. There is this gatekeeping behavior within DPP. In fact, one of the bills that Grassroot Institute fought very hard for at the state Legislature was because there’s a single person at DPP who gatekept on the one issue that he was in charge of.
And the stakeholder said, “Go to the state Legislature,” just to get the state Legislature to pass a law that said, “Counties, you need to allow this process to happen and not gatekeep.” And we need to do it by the end of this year; we have about a month and a half left to do it.”
Also, technology. We’ve fallen behind the technology. The system that we have to process permits was state-of-the-art in the late 1990s and early 2000s. It was actually really good. And, you know, with technology and other improvements, it’s much lower and doesn’t respond in the way that I think the consumer — everyone applying for building permits — would want.
And then the one last thing that I think is a challenge is there is a lack of enforcements and meaningful penalties for those who don’t follow the rules, and who clog up the system.
One of the recent DPP audits showed that for the single-family home permits, you could go through a third-party review. There were 503 that came in through this process, and only 75 of them complied with all of the requirements.
And some of them were granted for manini things like the stamp being expired. But, you know, there’s a lot of people who are just putting things in the queue and hoping that they’ll get to the front of the queue. And by then be able to correct things when the time for comments and corrections come around. You know, that makes it harder for people who are just trying to do simple things.
What I’d like to leave all of you with is a question of, what are the incentives for the Department of Planning and Permitting to do better? What are their incentives? Obviously, for the city on the whole, we get construction jobs out of it. You know, keeping our contractors employed, material suppliers employed. We get property taxes after the building is built.
But what is the incentive for DPP to go from 270 days in the backlog to 180 days, and then 120 days, and then 60 days?
Do the plan reviewers get a bonus? Do they get a pat on the back? Do they get a cookie? Some of them get boxes of manapua, but that’s what gets them in trouble, so we’re not going to do that. But really, what is the incentive?
And one of the things that I proposed, which some people thought was a little radical, last year, was Bill 20, which would have created a special fund for DPP and made the department self-funding.
Right now, the department costs, ballpark, about $30 million to administer. To pay everyone’s salary, to pay for the computers, the printer paper, everything else. The department brings in about $30 million in permit fees, and yet it’s still slower. It’s still slow.
And so, my idea was, we would have a fund. All of the permits that permit fees would go in, all the fines that they collect to go in. Because, right now, they also have no incentive to go out there and collect on fines.
On the same street that my parents live on, there’s a home. It’s an illegal short-term rental, they’ve been cited dozens of times. Carole’s nodding because she knows exactly where it is. It has $11 million in fines.
And it’s a normal, like, local home; it’s not like a mansion. The home is probably worth like $1.2 million, yet this owner has $11 million in fines. And what have we done? We’ve given him more fines, and said, “Gosh, you know, if only we charged you another $100,000 in fines, that’s what’s going to get you into compliance.”
And so, I think we need to get real about some of these things and figure out what is actually going to incentivize some of this good behavior.
Because we can put on — and I know the shot clock discussion was on there — you know, we can impose a shot clock, but we already have this for certain things. We already have this for Bill 7, the small apartment projects. And very few of them, in fact, I don’t think any of them make it out of the shot clock in time.
In the report, there’s a little table about how single-family homes, you’re supposed to have two days, maximum. There is not a single permit out there that is meeting this requirement right now.
And all of you who are about to give your horror stories, certainly none of you are getting the two-day treatment. And so, simply putting that in law doesn’t make it happen by magic.
And so, I think we need to also think about what this incentive structure is and how we can get that apartment to move. How do we get the bureaucrats to move?
If we say that you get more permits issued and get them out faster, can you get, you know, more staff support? Can we pay more salaries? Can we do all of these things? But I think it’s going to take some strong leadership from our government level but also continued advocacy from stakeholders to make sure this happens.
So, for all of you who are waiting for your permit, I feel your pain. But the moment you get your permit, go and build your thing. Great. But don’t forget to keep on bugging us and complaining that, “Why did it take so long?” Don’t just disappear into the ether because we need this constant pressure to get things to move.
And if you get your permit and run away and we never see you again and never hear from you, then we’re not going to be able to continue this kind of drumbeat of like, “We need these necessary reforms now.”
And so, that’s what I’ll leave you with. I’ll open it up, I guess, I’ll turn it back to Keliʻi. I’m sure we’ll have questions and complaints and hopefully some answers from either me or Ted.
Akina: Thank you, Tyler. Give him a hand, please. Very good.
[applause]
I’d like to ask Joe and Ted to come up to the table as well. And before I ask Tyler a question, somebody’s got a white Ford Fusion. If you have a white Ford Fusion in the parking lot and you want to keep it, just kind of step out for a moment.
Tyler, this wasn’t rehearsed. I just want to do some brainstorming with you off the cuff right now. You gave some very excellent ideas for the fixing of the system that’s in place now. And in your role on the Council, that’s an important thing to do.
But let’s step out of the box for a moment — and again, it’s not rehearsed, so I may have caught you off guard here — ehat are your thoughts about doing, in Honolulu, what is being done in Sandy Springs, Georgia, which is the privatization of the permitting process? Putting it out to bid to companies who will compete for excellent service as well as the best price?
Any thoughts as to whether that or any portion of that could be useful to us here in Honolulu?
Dos Santos-Tam: Yeah, I think that part of the challenge that we face is accountability from the department. And even if we were to privatize everything tomorrow, we need to make sure that the private vendor is doing their job and we stay on top of that. And here in Hawaii, we don’t always have the best track record of doing that.
I will say, I think there are some areas where we should have a serious discussion. I don’t think that we’re ready to privatize everything.
But to Ted’s industry, if it’s solar, we just did self-certification for things like commercial tenant improvements. If we can start carving out some of these areas, I think that would also help.
One other space that I think is important and worth a conversation with your state legislators and the governor’s office on, is the state still needs to come to the counties for building permits.
There’s an elementary school in my district. They wanted to redo the roof of the cafeteria. They wanted to redo the roof of the cafeteria during the summer so there are no kids there. And that means getting your building permit approved by, say, April.
And this was last year. Do you think that happened? Does anyone in this room think that happened? No, of course not.
But the state doesn’t need to come to the counties for building permits. The state could just do it because they’re above the counties. And yet, they do it for sort of risk reduction and other reasons.
I think it’s time to have a conversation, also with the state, about if the state kind of does its own self-certification process to get its permits out there, that’ll take it off the county’s table. And again, it’s how do we reduce the queue? So if we can take chunks of it out of the queue, I think that would be a win.
Akina: Thank You. Thank you, Tyler. Just if you don’t mind, I want to continue that thread about possible privatization.
But Joe, you’ve actually visited places in this country where that’s in the works right now, that segments of work that are done by counties are being done by private businesses. What are your thoughts about that in terms of permitting?
Kent: Well, I was talking to some cities about this. And I told them that we have this law that says that it’s very difficult to privatize processes that are typically done by government workers. And they said they’d never heard of a law like that.
You know, a lot of the things that are done by government in Hawaii are just not done by governments in many places. You know, hospitals is an example. The airports, the harbors are another example.
And so, permitting is kind of a common sense thing in many locations on the mainland, but here it’s like a taboo type of subject. So I’m glad that there is an indication to see some modicum of steps in that direction.
Akina: Ted?
Peck: Yeah, a couple of thoughts. One is the DPP has used third-party approval before for segments of the permit. Like you can get your electric plans approved by a third party.
You know, over the last six years, we went through this cycle where DPP became very hostile. The civil servants there became very hostile to third-party review process. And they did an audit, and they found a number of issues. I think it is related to that whole spate of illegality and bribes that happened.
But they did a very harsh review process. And as I talked to a number of third-party review companies, they’re like, “Hey, I’m out. This is simply not worth the pain and the unnecessary scrutiny. I’m an honest guy.”
And again, it’s a couple of bad apples. And combined with, you know, civil servants, you know, not feeling like private sector’s competing with government. That’s kind of run its cycle, and now you can get third-party review, at least for the electrical portion. But the whole permit, you know, that review has to go back into DPP, and DPP does the final approval. So in essence, you’re outsourcing a part of the process, not the permit itself.
Kent: Yeah, that’s a great point about third-party review. Because third-party review is like, the third party reviews the permit on behalf of the person like the builder, the developer. And there’s kind of a screwed-up incentive there in a way inherently.
But for a government to hire a third party to vet a permit, the incentives are more aligned there. If the third party is a bad actor, then the government can fire the third party and get a good third party to review the permits and so on. So, yeah.
Akina: Yeah, to some extent, Joe, you’ve gone to the crux of it because, in business, if a contractor doesn’t perform according to the standards for which it’s hired, you fire that person. If a contractor charges more than the market bears, you fire that person and hire somebody who will give you what you want at the price you want.
Those incentives aren’t in the system right now, but we can continue to talk about that another time. I want to hear from our audience what you would share with us or even some questions you may have for our panelists here.
We’ve got a microphone over here, which we need you to come up to because we want you to be heard and we’re also recording this related broadcast. Feel free to come to the microphone.
Have you had an experience with permitting here in Hawaii that shows some of the issues that are being discussed today? Do you have a concern or question with regard to that?
Don’t be shy, we’re amongst friends over here. We’re not going to be reporting you to anybody.
Peck: While he’s coming up, I just want to say one thing I learned at the state, and I’ve learned subsequently when I worked at the state, and subsequently in the industry, is that if you want to get a bureaucrat to do something, you need to de-risk it for that bureaucrat personally because, as you mentioned, they don’t have a lot of upside but they have tremendous downside. And typically people that work at the state, you know, they’re not looking to take on a lot of risk, and so they’re very risk-averse.
And so it’s challenging. Yeah, you just need to think about that from that decision-maker’s perspective.
Akina: Sir, if you come to the microphone, tell us who you are, and very briefly share with us what you would.
Jacob Wiencek: Thank you for the opportunity. My name’s Jacob Wiencek. I’m the treasurer for my condo association board, and we’ve been tangling with DPP quite a lot.
The most recent incident has been, for years, we’ve been trying to redo our roof. And we just keep hitting snag after snag after snag.
And a couple of months ago, we thought we finally were able to get work going. City Council created this emergency permitting-approval process. So we submitted the request for an emergency permit to fix the roof because there was a leak. But our project manager didn’t get around to filing the actual permit you need to do after that, for approval, for a couple of days. And unfortunately, there is an individual with malign intent at my condo building who saw that gap and relentlessly hounded DPP to issue us a stop-work order.
And now, two months later, especially after we just had the heavy rains, roof is still incomplete. It was halted in the middle of work getting started, and the unit owner is suffering from that. And that is just one of many issues we’ve had with malign actors being able to exploit gaps in the permitting process. And it has just cost us so much time, money. It’s cost us relationships, it’s a byzantine mess.
Akina: Thank you for sharing that. I’m sorry to hear it, but thank you. Give Jacob a hand.
[applause]
Sir, if you’d identify yourself, and the panelists, feel free at any time to jump in and make a comment.
Emil Svrcina: Thank you so much for being here today. My name is Emil Svrcina. I have a question for you, but I have also one story I would share because I applied for my permit in 2017.
So, you know, then COVID hit, the office was barely functioning. And after that, I found out that they dropped the permit because it was too late already. There were no exceptions whatsoever, so I have to reapply again.
And my question is, because now everything is electronic, would you be able to provide us with some software where we can use to help you? Because we would have a unified way of accessing those files.
But at the same time, we don’t have to deal with those high prices of every contractor I could find, you know, because they said, you know, you increase the prices of everything, so they have to charge us. So if I want to apply for that little simple one-room addition today, I would’ve to pay $7,500 just for the drawing, you know?
So if you can provide us with some incentives, also have some publicly accessible software. Thank you.
Akina: Interesting idea. I don’t know whether any panelist wants to respond to that, but it is an interesting idea. Thank you.
Dos Santos-Tam: Well, I will take a crack at that. There is new software that’s coming. I mentioned the existing software has been chugging along for quite some time. There is new software that’s almost here. We keep asking the department, and it’s almost here. But I think it will make a difference.
So one other big change that I can’t believe was not the case before is now they can finally accept credit card payments for some of these fees. Before, you’d have to march in with a check, and somebody would have to carry that check and sort it and scan it and take it to the bank. So, all of these small little changes will also add up.
And to Jacob’s point, one issue that is on my mind a lot — because we’ve been talking about the empty-homes tax, and it’s been in the news a lot — is if we can cut down on this permit issue, we would have fewer empty units. We’d have units that could be renovated, and people could live in them.
And that’s something that I’ve also been thinking about a lot, is how we can maybe expedite these small apartment units, you know. In a 12-unit apartment complex, maybe one or two of them are uninhabitable for some reason that can be easily fixed. But why go through permitting hell for three years just to redo this? It’s just easier to let it sit there, and that’s a shame.
Akina: Very good. Thank you. Mark.
[applause]
Mark Monoscalco: Aloha, I’m Mark Monoscalco. I’m a board member here at Grassroot Institute. And I remember a discussion with Ted Kefalas and Joe Kent recently, talking about the total cost of housing construction. And that the regulation cost is a significant percentage of that. Do you guys have that up that you can talk about?
Kent: Oh, I just remember it was around 40% of a condo. Sometimes, it was hundreds of thousands of dollars that regulation was attributed to the additional cost of the units.
Akina: Right. That’s our own finding, but it actually was the work of UHERO. They published that.
Monoscalco: Yeah, but that’s something that’s pretty typical in every major city.
Akina: Yeah.
Monoscalco: So we’re not unique to that, but we should be promoting that as the reason why we have to really get behind it and get it done now. It’s killing us, right?
Peck: You know, the money in terms of the total cost of a project for the permitting, that’s a thing. But I will tell you that time is far more expensive — far more expensive — because when you have permit delays, you have to lay off people.
And so people lose their employment. You lose the talent. They’re not going to hang around for you, you know?
So the time is much more of a bigger issue from a business standpoint than the cost. Not to say that it’s insignificant, the cost of regulation, but the time is what’s so brutal to businesses.
Akina: Thank you, Ted. Thank you, Mark.
Monoscalco: You’re welcome.
Akina: That’s the time value of money, especially for finance. Thank you.
[applause]
Now, anyone else, please come to the microphone. We have a few more minutes left.
And as you’re coming to the microphone, I’d like to just point out, I think somewhere today we have a Civil Beat reporter named Christina Jedra. I’m mentioning you, Christina, because you’ve got a very clever, delightful tool that you published on Civil Beat.
And it’s something for anyone in this room here. You’re sitting at home with your family, it’s an evening, you’re bored, and all you want to do is something that will frustrate you. Go through the process of trying to get a permit using the game that Christina developed. What’s it called, Christina?
Christina Jedra: “How Long Does It Take To Get A Permit?”
Akina: “How Long Does It Take To Get A Permit?” Now, that sounds like a fun Sunday evening family [crosstalk]
Mark Coleman: [laughs] As I recall, it’s a game you can’t win, right?
Akina: Give Christina a hand. Thank you.
Coleman: Yeah, it’s a game you can’t win.
[applause]
Well, I’m Mark Coleman. I’m also with the Grassroot Institute, and I was just curious. I wanted to address Tyler’s point about establishing incentives. That’s a good idea. And I loved Joe’s point about, you know, as far as third-party people go, making sure the incentives are aligned properly.
But aside from the fact that maybe, yeah, it’d be nice to give DPP folks a raise perhaps or whatever — and then, of course, the lack of enforcement issue as well, that difficulty — but wouldn’t it just be easier to make their job easier, for example, you know, like implement most of these options for reform?
And of those, by the way, which one did you think was perhaps the best one, to have more exemptions or what? Which one did you like the best?
Dos Santos-Tam: Yeah, so I’ll answer them backward. I think the one that we need to talk a lot more about is exempting the basic and sort of non-structural work.
Andria Tupola, as Ted mentioned, had that bill last year, and I think we could have actually gone a little bit further, and I think we could have identified some more areas to carve out.
I also think that on some of the regulations side, you know, we can cut things back. And Honolulu is the only county that, in addition to the building code, has a separate thing called the housing code, which has its own set of things you need to comply with.
The downtown building owners who are trying to convert to residential are encountering this. There’s a lot of things that we can start pulling back on.
I do think that — also the preapproved building plans will help in certain instances, maybe for the ADUs, maybe for some of the other things that are sort of mass-produced. You know, out in West Oahu, you sort of have six different house types in the subdivision. And all of them are exactly the same. So that seems fairly easy.
Now in terms of making their job easier, I agree. I mean, I think that if we take some of the things out of the queue, it will make it easier. But somebody’s got to pay for that. Somebody’s got to pay the contractor.
You know, and I’ve talked with a number of developers, and I think they’re willing to, and landowners and all of that. I think people would be willing to pay a little bit more if they had certainty, and if they had the expectation that you start the process, and 60 days later, you get your permit back, period, full stop.
But right now, you know, it’s a literal crapshoot, and it’s just, you just see what happens.
Akina: Thank you, Tyler.
Coleman: Thanks.
Akina: One more question. Go ahead. Or your story maybe you have for us.
Margaret Lim: Yeah. Horror story.
Akina: Tell me your name.
Lim: I’m Margaret Lim. I’m a Realtor, and I’m also a homeowner investor.
So I’m trying to extend my front porch by about 120 square feet and also my front roof, and it’s been over a year. So between the architect and the DPP, I don’t really know where’s the problem.
So my suggestion is when a drawing comes back with comments, can we make an adjustment where the homeowner will be notified? Because, otherwise, we are being pushed around, so we don’t even know, “Where is the ball now, and what’s causing the delay?”
And everybody’s trying to excuse themselves and blaming each other and mostly blaming DPP. And I think sometimes the problem is with the contractor or the architect, you know? So I just want to make that suggestion. Thank you.
Akina: Margaret, thank you very much. Appreciate that.
[applause]
And, sir, excuse me. Are you coming to the microphone, sir? I think that’s it then for today.
One more. We’ll close with you. Very good. This has been great. I just enjoy what I’m hearing from all of you. Not the plights that you’re in. [laughter] But the fact that you’re sharing it, and we want to hear more.
Call us anytime. Talk with some of our staff. The more we know about what’s going on, the more tuned in we can become because we’re not just here today to present you a set of theoretical solutions. The theory is there, definitely. We have found best practices. But we are now going to push on your behalf to change the permitting scene in Hawaii, and we’ve got to do it together. It’s not something that we can do alone. We’ve got to band together in order to make Hawaii a more livable place. Does that sound like a good thing to do?
Audience: Yeah.
Akina: Let’s do it. Most definitely.
[applause]
Sir.
Jeoffrey Cudiamat: My name is Jeoffrey Cudiamat. I’m the owner of Structural Hawaii. We are an architectural and structural and civil engineering firm. We process probably over 200 permits a year, maybe more than that. We do commercial and residential projects, but the bulk majority are in the residential sector. What do I want to say? There’s a lot I want to unload.
Akina: Well, that commercial is going to cost you a $5,000 contribution.
Cudiamat: OK. Sorry. Thanks. [laughter] The check’s in the mail.
Akina: But continue. Go ahead.
Cudiamat: Yeah. I do like the idea of preapproved plans, preapproved model homes. That’s a great idea. I know as a structural engineer, one of the issues is every project is site-adaptable. It has to be site-adapted.
I see a former DPP director here, Tim Hughes, and we went through this when I was president of the Structural Engineers Association, that every location on the island has a specific wind rating that has to be designed for us.
Even though it’s predesigned and can meet some of the architectural requirements and zoning requirements per se, but you’d have to get it engineered, obviously. So, but I like that idea.
In California, instead of actual real homes, they have typical details like wall cross-sections that are preapproved. I have brought it up even when Director [Hughes] was still in his position.
I brought it up that they should also have typical details because not all homes are designed the same, and they don’t have to be prepackaged, but the wall section is very typical and if you can have a system that’s designed that way.
One of the bigger problems with DPP is they don’t have a competent structural engineer on staff. They don’t have any structural engineers on staff. Maybe one, Willard, but he’s not in the review division.
And so, they don’t know what they’re reviewing, honestly, I’m sorry to say. But if they had a preapproved typical detail that covers a lot of these typical details and requirements, they don’t have to get those things reviewed.
So I do like the idea of having preapproved plans, but even if you have to break it down into something smaller, like a preapproved cross-section, like a typical wall section, that might be better.
There was a bill that passed — I think Bill 18 — Councilman. Bill 18, related to self-certification, but that only applies to [Department of] Hawaiian Home Land properties and for commercial tenant improvements, and then also for I think affordable housing. But it doesn’t apply to self-certification for residents.
So if there is something that would be passed along those lines, you know, the onus would be on the architect or engineer like myself. And, you know, that would expedite the permit process, I think. But, you know, it comes with a higher insurance premium, I would think.
But there is one bill that I saw went through City Council, I think second reading, was Bill 6, which I think was related to SAIs, special assignment inspections. And SAIs are allowed for commercial projects, which is related to having an inspector do what they call “courtesy inspections.”
Yes. You had something to add? Ok …
So courtesy inspections for commercial projects, if the project’s been in the system and it’s taking a long time, it allows the contractor to get a headstart on the project to get it started and then get it reviewed by the inspector, which is what you want.
You want to have construction being built per code, and if the inspectors are competent enough to inspect that particular issue, say it’s footings or electrical work, you know, they could come and certify that it’s OK and then get the plans once it’s approved.
I mean, there’s some rules to that, but if they could apply that to residential projects, that would really, really expedite construction in Hawaii, and it hasn’t really gone out that way.
And I heard through the grapevine that the City Council hasn’t approved it because the city is not really set up with their inspectors yet. They have to ramp up their inspectors. But if they are ramped up, if they do hire more people, if they are able to handle that capacity, it would really stimulate the economy, I would think.
Akina: Well, thank you very much. These steps can make a difference in the long run. Give the gentlemen a hand.
[applause]
Thank you. Appreciate it very much.
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