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Regulation reform needed to support affordable housing

By Staff | Apr 22, 2022

This election year, county and state candidates will emphasize the need for more affordable housing on Maui. It may be the biggest issue in our entire state.

Perhaps created to protect our beautiful islands, a new survey on housing by the University of Hawaii Economic Research Organization (UHERO) found that Hawaii has some of the most restrictive housing regulations in the nation.

According to the first results from the survey findings:

1) Hawaii’s counties have some of the highest regulatory burdens, even when compared with the nation’s 30 most expensive counties.

2) Affordable housing requirements are particularly widespread in Hawaii, and permitting wait times are roughly triple the national average.

3) The categories that contribute most significantly to the regulatory burden in U.S. housing markets are court involvement, state political involvement and local political pressure. Hawaii ranks highly in all three categories, and its level of local political pressure is particularly high, ranking in the top 5 percent of the national survey sample.

4) Reducing the regulatory burden of housing construction could lower housing costs. One way may be to expand the number of locations where denser housing can be built without obtaining a variance to existing zoning rules.

Home prices in Hawaii are among the highest in the nation. In 2021, the median single-family home resale price was about two-and-a-half times the national median.

According to the researchers, one of the factors that may explain Hawaii’s high home prices are government regulations that limit the ability of the housing market to create the units necessary to meet demand.

Reforming overly restrictive regulations is one way local government can support affordable housing.