State LUC may be choking off additional housing

Hawaii’s housing shortage may be squeezed even tighter, as the Hawaii Land Use Commission has not approved any housing projects in the past three years.

Data obtained by the Grassroot Institute of Hawaii shows a lack of approvals by the commission since the end of 2013, and this may be slowing down the creation of housing for families that want to stay in the islands, causing higher prices for the housing inventory that does exist.

According to the state’s own calculations, Hawaii’s population is expected to grow by 184,090 residents by the year 2030, an increase of 13 percent. The state projects that this would require at least 64,000 new housing units to be built in the next three years. However, the last housing project approved by the LUC was over three years ago, which added only 918 units.

Since then, at least seven projects, representing 4,540 housing units, have been filed to the commission, and are either still awaiting approval, or have been terminated or denied.

Not all housing projects need LUC approval, but many projects that require rezoning do. Only 5 percent of the land in Hawaii is zoned for urban or rural housing, with the other 95 percent being reserved for agricultural or conservation lands. LUC approval does not guarantee that the projects will be built. Housing projects still need to be vetted by the counties and undergo another rigorous approval process.

Since the end of 2013, a large turnover in Land Use commissioners shifted the commission strongly in favor of a no-growth position, as evidenced by the absence in project approvals. Other issues such as bureaucratic hurdles and legal battles have slowed down the process.

Some home builders who face costly delays simply give up on the dream of creating more affordable housing, opting instead to create high-end housing for the very wealthy, which often does not require rezoning.

Approval of all stalled, delayed or denied projects at the LUC in the past three years would take only 0.03 percent from the 47 percent of agricultural lands, but it would help create a more affordable place to live.

Ironically, the LUC was created in part to save agricultural lands, but this has backfired as 540,000 acres of crop and pasture land have gone fallow since the commission was created. Much of the land is still “preserved,” but no productive agricultural uses are taking place and the LUC zoning has led to higher home prices, which has made it hard for agricultural workers to find a place to live.

As agricultural workers leave the island, so do agriculture jobs, and the same is true with many other entrepreneurial ideas throughout the state.

However, there are many solutions to the problem of affordable housing in Hawaii.

First, the governor and leadership should carefully consider appointing commissioners who are serious about solving the housing crisis.

Second, greater control of lands probably should be given back to the counties. Currently there is much regulatory duplication because of the LUC’s role through extensive general plans and community plans. In this sense, the LUC may have outlived its usefulness.

Finally, the counties already have the power to rezone many smaller projects under 15 acres. Increasing that power to 150 acres may help provide more housing options for island families who want to stay in the islands.

Joe Kent is vice president of research at the Grassroot Institute of Hawaii, a think tank focused on individual liberty, the free market and limited, accountable government.