Hawaii lawmakers push for bonds to fund infrastructure

Gov. Josh Green, Honolulu Mayor Rick Blangiardi, Kauai Mayor Derek Kawakami and state lawmakers urged Hawaii voters Wednesday to approve a constitutional amendment that would authorize a new way to finance infrastructure projects, arguing it could help address the state’s housing shortage without raising property taxes.

The officials gathered at the state Capitol rotunda to advocate for Constitutional Amendment Question 2, which would authorize Resilient Infrastructure for Shelter and Equity, or RISE, bonds. They were joined by supporters from the housing, labor, business and community sectors.

The proposed financing mechanism is intended to help pay for infrastructure needed to support housing and development, including roads, water systems and sewer lines, while strengthening communities against severe weather and other future challenges.

Bonds are essentially loans that governments use to pay for major projects up-front and repay over time, typically with interest. Under the proposed RISE model, revenue generated by new development would help repay the bonds, allowing infrastructure to be built sooner without relying entirely on up-front public funding.

“We have great needs already,” Green said, noting that Hawaii has about $2 billion in infrastructure project needs and emphasizing the importance of investing in infrastructure to support housing and future generations.

Green said the financing approach could allow governments to build infrastructure now and use revenue generated as development progresses to help fund additional projects, rather than waiting until billions of dollars are available up-front.

“This is the way we move forward and deal with the crisis that we have,” Green said.

Kawakami said infrastructure expenses are a major factor contributing to Hawaii’s high housing costs. When developers must pay up-front for roads, water connections and other improvements, those expenses can ultimately be passed on to homebuyers.

“When we put the cost of infrastructure on the developers, what happens is the cost of housing goes up exponentially,” Kawakami said.

He said RISE bonds could provide an alternative way to finance infrastructure, reducing up-front costs associated with new housing while allowing construction projects to move forward.

Kawakami also said the approach could help sustain construction employment by making it easier for projects to proceed instead of leaving workers waiting for funding and infrastructure improvements.

“This is a sustainable way for the government to fund the necessary infrastructure that our people have been begging for without putting the burden of costs on our taxpayers’ backs,” he said.

State Rep. Luke Evslin (D, Wailua-Lihue) said Hawaii’s housing shortage cannot be addressed through land-use or permitting changes alone if communities lack the infrastructure needed to support additional homes.

“In a lot of ways, our housing crisis is an infrastructure crisis,” Evslin said.

He said governments and developers face difficult choices when paying for infrastructure: Developers can absorb the costs and pass them on to homebuyers, or state and county governments can shoulder the expenses, potentially requiring additional public funding or tax increases.

“None of us up there want to increase taxes,” Evslin said.

State Rep. Darius Kila (D, Nanakuli-Maili) said infrastructure costs contribute to the final price of a home and that changing how those improvements are financed could help make housing more attainable.

Kila acknowledged that the measure would not solve Hawaii’s housing crisis overnight but said it could be a step toward addressing long-standing barriers to development.

Green pointed to the planned stadium redevelopment in the state’s stadium district as an example of how the financing model could work. He said plans call for approximately 4,500 homes in an entertainment district surrounding the stadium, a project that would require additional water, energy, sewer and road infrastructure.

He also described potential housing development along Honolulu’s rail corridor, where new communities could be built if the necessary infrastructure were available.

Under the proposed model, governments could finance infrastructure up-front and use revenue generated by new development to repay the bonds over time. The officials said the approach would avoid imposing an additional property tax on residents outside designated development areas.

However, Austin Martin, chair of the Libertarian Party of Hawaiʻi, argued that the proposal would allow counties to borrow against future property tax revenue while circumventing existing debt limits. He said taxpayers would ultimately bear the cost of repaying the bonds.

“They’re not raising your property taxes right now. They’re giving themselves the ability to borrow against future paid property taxes and even future property tax increases,” Martin said. He argued that the measure would create a constitutional exemption allowing counties to take on additional debt rather than address what he sees as the underlying causes of Hawaii’s housing crisis.

Martin said restrictive zoning laws and lengthy permitting processes are the primary barriers to building more housing, arguing that the state should make it easier for property owners to develop land instead of expanding government borrowing. He pointed to agricultural land restrictions and the cost of obtaining permits as examples of regulations that can prevent housing projects from moving forward.

“The problem is the government making it illegal for us to own and use our own property,” Martin said, arguing that loosening zoning restrictions and reducing regulatory hurdles would allow private property owners and developers to build more homes without relying on additional public financing.

Martin also questioned who would benefit from the proposal, saying construction unions and real estate interests stood to gain from increased infrastructure spending. He urged voters to reject Question 2, arguing that the state should focus on removing barriers to development rather than borrowing against future tax revenue.

Supporters, however, said RISE bonds could reduce up-front infrastructure costs and development delays, helping lower housing costs while using revenue from new development to repay the bonds. Green cited research suggesting delays and existing development processes can add hundreds of thousands of dollars to a home’s cost, though he did not identify the study.

The amendment also includes accountability measures intended to govern how the financing mechanism is used. Supporters said those safeguards, alongside investment in infrastructure, would help communities prepare for severe weather and other future challenges.

The measure comes as Hawaii continues to face high housing costs and a shortage of homes. Supporters argue that infrastructure funding is a key part of addressing those challenges, particularly in areas where development is constrained by the cost of expanding roads, water systems and other public services.

If approved by voters in November, Question 2 would authorize the state to pursue the RISE bond financing approach. Its effectiveness would depend on how projects are structured, how much revenue new developments generate and whether that revenue is sufficient to repay the bonds.