Hawaii’s strictest-in-the-nation housing regulations push up already high prices: Report

HONOLULU (HawaiiNewsNow) - Hawaii has some of the strictest housing regulations in the nation, contributing to higher prices and a shortage of affordable homes.

That’s according to a new report released Thursday by the University of Hawaii Economic Research Organization.

The report found the state’s counties have some of the most stringent regulatory burdens, even when compared to the 30 most expensive counties in the U.S.

Overall, Hawaii as a state, has the highest level of regulations in the country and the highest median home prices.

There are several factors that lead to increased regulations — mainly court and state political involvement and local political pressure. Hawaii ranks highly in all of those categories.

Hawaii’s level of local political pressure is higher than average, ranking in the top 5% nationally.

According to the report, Hawaii counties stand out for their pervasiveness of affordable housing requirements, which reduce the revenue generated by new projects and the incentive to produce new housing. Meanwhile, many other locations on the mainland don’t have any regulations at all.

Experts say streamlining the permitting process is a key step toward easing the regulatory barriers.

“You think about a standard building for, say, a low-rise building that’s going to be targeted at median income households or below, so it’s going to have an affordable housing component, make it so that it simply is approved so it doesn’t have to go through months and months and months of regulatory process,” UHERO executive director Carl Bonham said.

This UHERO study does not prove that strict regulations directly lead to higher home prices, simply that there’s a correlation. But experts say reforming the current regulations could allow developers to build more homes to meet the massive demand.

Copyright 2022 Hawaii News Now. All rights reserved.