David Callies

David Callies is one of Hawaii’s leading experts on property law in Hawaii, so it carried some weight when he responded publicly recently to opponents of the state’s new Public Land Development Corp., which the Legislature created in 2011 to develop state lands without having to go through the usual regulatory and public hearing processes.

In a letter published in the Star-Advertiser, Callies said the precedent for the PLDC already had been set by the Hawaii Community Development Authority and the state Department of Hawaiian Home Lands, and he wondered if he could assume PLDC opponents opposed those agencies, too.

More important, he asked if it could be "that these ‘back door’ approaches to land development are proliferating because of the long and complicated process to develop land in the normal course of government permitting, estimated to take at least 10 years."

In his letter he left the question unanswered, but his own response is yes, and that if government officials do not repeal or change the underlying regulations that have led to the creation of these agencies, then their continued existence is all but assured.

Callies says he isn’t against planning in general, but thinks there must be legitimate police powers involved for the right of development to be abrogated. He expounds his views as a professor at the University of Hawaii William S. Richardson School of Law, where he has been teaching land use, state and local government and real property since 1978. He also is an external examiner for the Hong Kong City University Department of Law, and otherwise has a long list of legal and planner credentials, including being a member of the College of Fellows of the American Institute of Certified Planners.

Among his 20 books, most with co-authors, is "Regulating Paradise: Land Use Controls in Hawaii," which makes it clear why it takes so long to develop property in this state. One of his latest law review articles is "The Moon Court, Land Use, and Property: A Survey of Hawai’i Case Law 1993-2010" (see box).

He also is program co-chairman of the two-day 10th Hawaii Land Use Law conference that starts Thursday at the YWCA of O’ahu, which will look at critical legal issues facing landowners in Hawaii.

Callies is a graduate of Hinsdale High School, near Chicago, as well as DePauw University in Indiana, the University of Michigan Law School in Ann Arbor, and the University of Nottingham, in England.

Age 69, he is married and lives with his wife, Laurie, on Wilhelmina Rise.

QUESTION: A recent law review article of yours came to the strongly worded conclusion that, overall, the Hawaii Supreme Court’s record on preserving private property rights guaranteed in the U.S. Constitution has been "appalling." Why did you come to that conclusion?

ANSWER: It struck me sort of anecdotally that the cases seem to be largely favoring groups like the Sierra Club, Earthjustice, Hawaii’s Thousand Friends and so forth that generally sue when development permits are granted almost anywhere. So I asked a couple of my research assistants to do a survey, and they came out with the figures that over 80 percent of the cases that the state Supreme Court decides find against either the county or the state or the landowner — whomever the decision-maker is and who owns the property. And in a substantial number of those cases — I think in the neighborhood of 70 percent — it overturned the Intermediate Court of Appeals.

Q: Why is that a disturbing trend?

A: Well, the U.S. Constitution protects the right to use property unless there are police-power reasons not to. And in Hawaii sometimes we get the impression that it’s the other way around. But it’s not. The right to use property is a right that the Supreme Court has held to be virtually co-terminus with other rights, a civil right. So if you can’t ground it in police power, then you can’t regulate it. Development of land is not a privilege, it’s a right. And so, if that’s the case, for the (Hawaii) Supreme Court to find — over and over again — that the right does not seem to exist, that strikes me as a lopsided view.

Now, that’s the (Chief Justice Ronald) Moon Court. I have no idea what the present court under Chief Justice (Mark) Recktenwald will do. You’ve got three new justices: the chief, who didn’t take part in many of the decisions of the Moon Court; you got Justice Sabrina McKenna; and you’ve got Justice (Richard) Pollack. So it’s hard to say whether that trend will continue, which is one of the reasons I was so direct in my article.

Q: You noted that there was as much development-related litigation over the past two decades as there had been in the previous 40 years. Is that necessarily bad?

A: Well, I’m not a real fan of litigating; and in Hawaii generally, for a variety of reasons … we don’t litigate a lot. Partly it’s because if a landowner litigates something, it costs the state or county time and money, and if the landowner comes back to the state or county for something else, the reception is not often as nice and receptive as before. It’s sort of like, you sue me and we’ll see you later — or not.

So a lot of the litigation that has evolved over the last 20 years has been brought by out-of-state landowners who have one project, are demonstrably not Hawaiian — with a large "H"; I don’t mean by that Native Hawaiian but not from Hawaii — and really have nothing to lose when they can’t get the department OK in the so-called entitlement process. This was largely true with respect to Turtle Bay, … it is largely true with respect to Kyo-ya. You can go down the list and find that most of the people who finally go to court are out-of-state investors who see their investments suddenly worth a whole lot less and have decided to litigate.

Q: What kinds of negative effects have resulted from these decisions?

A: From a practical view, I think it means that in residential areas, as with the Ho’opili and Koa Ridge projects, a looming shortage of middle-class housing and a continued huge shortage of affordable or workforce housing, as is the buzzword today. If — as Hawaii chooses to do — affordable or workforce housing is produced as a required percentage of market-rate housing (but) you’re not permitting market-rate housing, (then) you’re not going to get any affordable housing, of whatever percentage.

Hawaii also goes overboard in the percentage of low- or moderate-income housing it requires. Maui for several years required a 50 percent mandatory workforce housing set-aside, and the state has often been in the 25, 30, 35 percent category. … But much over 30 percent, it doesn’t pencil out. You can’t do it. When the state tried to do that a number of years ago, under the Waihee administration, the developers just sat down and said, "Nope, can’t do it. We are not going to go for it anymore. We take a lot of risks … and we can’t make this work."

Q: Well, as I look around, it seems that developers are still interested in Hawaii. You have the project on Pohukaina Street, projects along the Kapiolani corridor, the housing out there that you mentioned, Turtle Bay …

A: Well, take the Ho’opili project or Turtle Bay. Everything is already — to use the developer term — entitled, which is what made the supplemental EIS (environmental impact statement) for Turtle Bay such a difficult one and the letters to your newspaper in a way kind of silly. You know: "Let’s not permit this," "Government should not give them a permit." They have all the permits. Henry Eng as Department of Planning director made that point years ago. When people said, "Don’t give them the permit; things have changed," he said, "I can’t. The permits have already been issued."

Q: But what about if things really have changed since the original permits were granted, that they didn’t develop it because of the recession or something and 20 years later they finally start to move ahead and other projects have gone up and there’s more traffic or whatever?

A: Well, first of all, you know, usually other projects haven’t gone up. It’s just a matter of increased traffic for tourism and for whatever reason.

Second, if that’s what we want to do, then the state needs to amend its EIS law.

We are (what is called) a "trigger" state; that is, you do certain things and you need an EIS. If you’re using government land, or you convert conservation land to an agricultural or urban use — these are the kinds of things that trigger an environmental impact statement. The problem with Turtle Bay is that the developer scrupulously avoided doing any of those things, and the court still created out of whole cloth a supplemental EIS requirement, based on changed conditions.

I’m not sure it would be the smartest thing in the world, but if the Legislature decides to pass such a statute, then more power to them. At that point, then everybody has to comply with whatever consequences there are. But the Moon Court kept rewriting the law, and in my view, that’s a legislative prerogative, not the Supreme Court’s.

Q: You’ve written about Hawaii’s many layers of land-use controls. How many layers are there?

A: Ooooh, there’s a bunch — about eight or nine. There’s the state Land Use Commission and its reclassification requirements, if the land is classified as either ag or conservation, which is something like 95 percent of the land in the state. You have the need for compliance at the Land Use Commission level with the state planning statute. You’ve got county zoning. You’ve got the counties required to conform their decisions to their development plans. … The development plans have to be in compliance with the county general plans. Then, if you have in mind residential construction, you have to file a subdivision plat and get a preliminary and final subdivision plat approved. And then you have the Coastal Zone Management Act, which is where most of our development gets done because we are a coastal state and for better or worse that’s where people like to live. Then just let me throw in the Endangered Species Act, which also needs to be complied with, and Section 404 of the Clean Water Act — dredge and fill permits for anything that deposits dredge or fill in a navigable waterway of the United States.

Q: What is your view of all that? I mean, isn’t that somewhat Soviet, or at least short-sighted because things do change?

A: Well, we’ve been a planning state for a good half-century now, and … you know, I hold planning credentials. … I have a lot of respect for planning. … So, no, I don’t think these plans are like Soviet plans and so on, but the process is so complex that if you start out with a green-field site that’s, say, classified conservation or ag, and you have in mind putting in a single-family residential subdivision on coastal land, it’s going to take you 10 to 15 years to get your permit to develop.

So I think the fact that it’s not working very well, and that it’s costing a lot of money — in interest and other carrying costs — is demonstrated by the increasing number of public agencies that provide one-stop shopping.

For example, you’ve got the Hawaii Community Development Authority — Kakaako — which can develop free of local zoning and subdivision controls. You come in, look at their plans, you see what fits; if you need an exception, you try and get it; the board grants it and you’re on your way.

And now you have the Public Land Development Corp., and there’s the Aloha Tower Development Corp.

Another one is the Department of Hawaiian Home Lands. They are able to construct not only housing but commercial centers on their land, without any compliance with local land-use controls like zoning and subdivision controls.

Q: Is that blowback from planning?

A: You could call it that. I think the government at a number of levels is realizing that it’s become so complex that it’s difficult to get any kind of a project off the ground.

Q: Would you say there’s any chance at all that the Legislature will roll back any of these land-use and environmental regulations, or is the idea of these public corporations granting exemptions going to gain increasing favor?

A: I’d say the latter because I think it’s very difficult politically to roll back a lot of these land use controls. There’ve been folks trying to push expedited permitting … for 30-40 years, but it doesn’t go that way. It goes the other way.

Q: So the planning idea is almost defeated?

A: There are holes. There are holes. There’s no question about it.

Q: But a state Supreme Court of a certain frame of mind could help out?

A: I think the simple answer is, "Not really." It gets back to the theory of whose kuleana it is. It’s the Legislature’s kuleana. It’s the City Council’s kuleana. They’re the ones that need to do the expediting, and they have done so increasingly by creating area exceptions or agency exceptions.

Q: Where should Hawaii policy makers go from here?

A: Well, it seems to me that policy makers need to speed up the land-entitlement process so that once a development gets rolling, it doesn’t take years and years, even allowing for recessionary periods during which the developer chooses not to do anything. And if nothing else is going to work, then, with all due respect to folks opposed, we’re going to need things like the Public Land Development Corp., which is a mechanism to get economically unproductive land owned by the state, like closed schools, into use as rapidly as possible.

The other thing we need to do is pay a lot more attention to our land-development conditions. The U.S. Supreme Court is hearing, as we sit, a case on the extent to which a developer who gets approval only upon certain conditions — like providing roads, providing impact fees, providing exactions for water and sewer — is entitled to what the courts call nexus and proportionality, and that means that whatever the development is driving a need for in terms of public utilities, that it could be required to provide. …

So resolving those two things would be extremely helpful in terms of getting needed development going.