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A lot of eyes are following Gov. Josh Green’s “experiment” to accelerate multifamily housing development in Hawaii with lighter regulations enacted July 17 via emergency proclamation.
The sweeping set of new rules largely waives or modifies parts of several state and county regulatory procedures in an effort to produce more housing at lower prices without significant negative impact.
A 23-member panel dominated by officials in Green’s administration will receive project applications and determine by simple majority vote whether a project can use one or more alternate approval procedures governing zoning, environmental review, historic preservation and other matters.
For projects initiated by the state or counties, the governor’s chief housing officer, Nani Medeiros, can issue approvals alone.
Green aims to provide “measured flexibility” to produce 50,000 new homes in five years, with most being affordable to low- and moderate-income households.
“We don’t have enough houses for our people; it’s really that simple,” Green said in announcing the proclamation that he described as being in the works for six months and produced in consultation with over 200 stakeholders, from developers to environmentalists and regulators.
Some critics call the new rules an improper use of emergency power that guts valuable protections against inappropriate development.
“It’s unconstitutional, it’s anti-Hawaiian, it’s anti-environment and it’s anti-democratic,” said David Kimo Frankel, an attorney for the Sierra Club of Hawaii. “There’s going to be a lot of litigation as a result of this.”
Minimum requirements
To be considered for emergency approvals, a project representative has to submit a written application to the panel dubbed the Build Beyond Barriers Working Group.
There is no minimum number of units or limit on rental rates or sale prices for proposed multifamily housing projects seeking consideration. That means a market-priced project with a few units could try to obtain approval, though Medeiros said in an interview that developers of luxury or resort housing projects should not apply.
“We have no intention of approving any luxury or resort housing development,” she said.
Medeiros said the rules don’t address housing price-points because it wasn’t feasible to define luxury housing. She also said worker housing could be built at a resort, so projects at resorts also weren’t prohibited.
One requirement is that construction of a proposed project be “likely” to start within three years of the panel’s approval with a binding term agreement.
Though it isn’t stated in the order, which is valid through Sept. 15 and subject to extensions, the emergency rules are intended to be in place for one year, according to Green.
The governor also aims to have the “nuts and bolts” of his order introduced as a bill in January so the Legislature can consider a longer-term regulatory overhaul for housing production.
New gatekeepers
Green’s proclamation alters normal development rules in many ways that may apply only in parts to proposed projects.
One contentious change pertains to urban use of land designated by the state for agricultural or rural use. Normally, the state Land Use Commission would decide whether to allow this for projects seeking to reclassify more than 15 acres, while County Councils decide such changes under 15 acres.
Under the new rules, the LUC would still govern land-use changes for more than 100 acres, while County Councils would decide changes for under 100 acres as long as the property isn’t “important agricultural land.” Several large landowners have obtained the important ag land designation, but no counties have fulfilled a state law requiring them to do so.
The altered regulation guards against easier approval of big master-planned communities, such as the 11,750-home Ho‘opili project being developed on 1,550 acres on Oahu after drawn-out LUC hearings. But some environmentalists fear housing subdivisions popping up on farmland under less rigorous county consideration.
Frankel is galled that Green used emergency power to enact something the Legislature considered earlier this year and didn’t pass.
House Bill 676 proposed such a change and stalled in conference committee after receiving support from real estate and construction interests that clashed with opposition from environmental and farming interests.
Medeiros, who endorsed HB 676, said in an interview, “Counties know better than the Land Use Commission what belongs in their counties.”
Frankel said it’s unconstitutional for the executive branch to do what the Legislature wouldn’t.
“That is a violation of the separation of powers, and really an intrusion on legislative prerogative,” he said.
The governor’s order doesn’t alter county zoning rules other than to allow residential use in areas zoned for business use.
Another gatekeeper substitution in Green’s order applies to projects proposed under a state affordable-housing law known as 201-H. This law can provide developers with county zoning and fee waivers for projects that have over 50% of homes affordable to moderate-income households.
Typically, a County Council governs such approval. But now a county’s planning director will decide.
One example of a 201-H project is Kawainui Street Apartments, a four-story, low-income rental apartment complex with 73 units planned on land zoned for single-family homes in Kailua. It was supported by the city planning director but rejected by the Honolulu City Council in 2020.
Another one is the three-story Manoa Banyan Court rental complex with 288 units for low-income seniors proposed on preservation land next to a cemetery and pending review.
Some supporters of Green’s alternate 201-H procedure believe more affordable housing stands to be approved without elected politicians involved, while some opponents fear the public will lose opportunities to influence decisions.
More generally regarding public input, the governor’s emergency proclamation states that applicants must include a plan to make at least one public presentation about their project, which could include a neighborhood board meeting or an agency hearing. The proclamation also states that a public notice soliciting written comments and accepting comments for at least 30 days be widely circulated.
Medeiros said the Build Beyond Barriers Working Group will review public comments before deciding to approve or reject a project.
It’s not yet been determined whether the public will be able to attend, view or participate in the panel’s meetings, according to Medeiros. The meetings also do not have to comply with public-notice requirements.
Sensitive places
Two other areas of regulation overhauled by Green’s order focus on environmental impacts and historic preservation.
Under the new rules, applications must include information about potential negative impacts on the environment and historic properties, including cultural sites and burials.
The working group would make a preliminary decision on whether a proposed project would likely have significant negative impacts on the natural environment. If so, a project would have to adhere to the normal regulatory process necessitating an environmental impact statement or assessment. If not, the panel’s determination would be disclosed on the governor’s website and in “The Environmental Notice” bulletin from the state Office of Planning and Sustainable Development.
Earthjustice, an environmental law firm, has been fielding calls from members of the public expressing concern over Green’s order, but is still reviewing the proclamation and reserved comment.
Alternate emergency rules also apply to archaeological work typically governed by the State Historic Preservation Division.
The panel would decide whether a survey, monitoring or no monitoring is necessary, largely by determining whether a proposed project site has a high, medium or low known density of historic, cultural or archaeological resources.
Green’s order also includes new rules in place of SHPD regulations pertaining to human burials if discovered.
Frankel said Hawaiian burials, or iwi kupuna, are now vulnerable to disinterment in ways they weren’t previously.
Several other less controversial modified rules are part of the governor’s order. They include eliminating a $30 million cap on general excise tax waivers for 201-H projects, waiving school impact fees and allowing counties to hire private plan reviewers to faster process building permits.
Green’s order also suspends state hiring rules to allow agencies such as the state Department of Hawaiian Home Lands, which is trying to spend $600 million largely for homestead development, to fill vacant positions more quickly.
Part of a statute governing the Hawaii Community Development Authority, a state agency regulating development in Kakaako, also is suspended. It has to do with requirements for contested-case hearings and having two public hearings, instead of one, on development permits.
‘In-house’ decisions
Green said consideration of housing projects will be much more efficient by having all decision makers together, and though he regards the new process as an “experiment,” he also is guaranteeing environmental, historic and cultural protections.
“I don’t think anyone should have any concerns,” he said July 17.
The 23-member panel includes one environmental and one cultural representative, two state lawmakers and three county representatives but is dominated by 12 officials at state entities within Green’s administration.
Honolulu City Council Chair Tommy Waters said he’s “cautiously optimistic” about results from the governor’s emergency order, though he’s also concerned that city legislative representatives with responsibilities to specific communities are absent from the panel.
“As a result, many of the opportunities for public input and hearing are also lost,” Waters said.
Some critics of Green’s order question whether the imbalance of supply and demand for housing qualifies as an emergency. They point to the proclamation’s fifth paragraph stating that Hawaii’s “severe shortfall of affordable housing” had been recognized as early as 1935.
Green’s position is that the severity of the problem today qualifies. “If anyone says this isn’t an emergency or this isn’t a crisis, they are not aware of what’s going on,” he said at the proclamation signing ceremony.
According to Green and Medeiros, Hawaii has the highest housing costs in the nation in part because it has the highest level of regulation that adds $233,000 to $335,000 to the cost of a home.
Each county mayor has endorsed the order, Medeiros said, and so have the two state lawmakers assigned to the working group.
Rep. Troy Hashimoto (D, Wailuku-Waikapu), chair of the House Committee on Housing, said good results from Green’s experiment could help the Legislature enact permanent changes speeding housing production.
Sen. Stanley Chang (D, Hawaii Kai-Kahala-Diamond Head), chair of the Senate Committee on Housing, who like Hashimoto spoke at Green’s signing ceremony, predicted success from the emergency order, which he said alters many regulations that developers have complained about for decades.
“The housing shortage has met its match, and we will end it in the near future,” Chang said.
BUILD BEYOND BARRIERS WORKING GROUP
Members will be a principal or designee from 23 entities who can approve certain housing projects by simple majority
State (14)
>> Office of Planning and Sustainable Development
>> Department of Business, Economic Development and Tourism
>> Hawaii Housing Finance and Development Corp.
>> Department of Land and Natural Resources
>> State Historic Preservation Division
>> Commission on Water Resource Management
>> Land Use Commission
>> Department of Health
>> Department of Transportation
>> Hawaii Public Housing Authority
>> Department of Budget and Finance
>> Island burial councils*
>> Senate Committee on Housing chair
>> House Committee on Housing chair
County (3)
>> Mayor*
>> Regulatory permitting agency*
>> Water supply department*
Other (6)
>> Electrical utility*
>> Honua Consulting LLC
>> Housing Hawai‘i’s Future
>> University of Hawaii Economic Research Organization
>> Sierra Club of Hawaii
>> Land Use Research Foundation
* From the county where a proposed project is located
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