The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Senate Committee on Housing on Jan. 28, 2025.
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Jan. 28, 2025, 1 p.m.
Hawaii State Capitol
Conference Room 225 and Videoconference
To: Committee on Housing
Sen. Stanley Chang, Chair
Sen. Troy Hashimoto, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: SB38 — RELATING TO HOUSING
Aloha Chair Chang, Vice-Chair Hashimoto and other members of the Committee,
The Grassroot Institute of Hawaii supports SB38, which would prohibit Hawaii’s county councils from adding requirements that increase costs for a 201H affordable housing project already approved by the Hawaii Housing Finance and Development Corp.
The state’s land-use rules are a key driver of Hawaii’s housing crisis. As measured by the state’s Honolulu Construction Cost Index, the cost for building single-family homes in 2024 was 2.6 times higher than the cost in 2020. For highrises, the cost was 2.5 times higher.[1]
The Economic Research Organization at the University of Hawai‘i has identified that Hawaii’s housing regulations are the strictest in the country, and “local political pressure” on housing developments in the top 5% of communities surveyed.[2] Likewise, UHERO researchers estimated that regulations comprise 58% of the cost of new condominium construction.[3]
This suggests reducing the power of Hawaii’s county councils over state-approved affordable housing projects could lower carrying costs, which would benefit builders and residents alike.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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[1] “Quarterly Statistical and Economic Report, 4th Quarter 2024,” Hawaii Department of Business, Economic Development & Tourism, pp. 107-108.
[2] Rachel Inafuku, Justin Tyndall and Carl Bonham, “Measuring the Burden of Housing Regulation in Hawaii,” Economic Research Organization at the University of Hawai‘i, April 14, 2022, p. 6.
[3] Justin Tyndall and Emi Kim, “Why are Condominiums so Expensive in Hawai‘i?” Economic Research Organization at the University of Hawai‘i, May 2024, p. 11.
