When asked how Gov. Josh Green’s administration plans to measure the success of his flagship policy initiative to build more homes in Hawaii, the governor’s new housing chief, Nani Medeiros, responded with an hourlong tour of a diagram referred to as a mind map.

The oversized poster-like graphic outlining Medeiros’ plan to deal with the state’s housing challenge shows not just the enormity of the challenge, but also the complexity of the approach Green’s administration plans to take to address what experts say is a need for as many as 50,000 new housing units statewide in the next few years.

Medeiros declined to make public her detailed map, which resembles a sprawling anemone, because she said it’s merely a draft. A more general map identifies nearly a dozen priorities — from specifics like plans to redevelop Aloha Stadium and provide homes for Department of Hawaiian Home Lands beneficiaries, to general ideas like collaborating with the private sector and county governments.

Cracking down on illegal vacation rentals alone could put thousands of units onto the market, she said, while imposing higher taxes on vacant investment properties could generate hundreds of millions of dollars in revenue to use for affordable housing.

To community and business leaders, dealing with Hawaii’s housing shortage is a defining issue for the state’s economy and the well-being of residents. A 2022 report by Aloha United Way found one in five Oahu residents struggled to pay housing expenses, such as rent or mortgages, while the number on Maui and the Big Island is closer to one in four.

Asked about economic issues facing the state, Peter Ho, chairman, president and chief executive of Bank of Hawaii, said housing “is the big one.”

Many people who are struggling to get by are choosing to leave the state, said Ho, who is also chairman of the Hawaii Community Foundation, a major charitable organization.

“If you’re losing population because people can’t afford to live where we live, that long term is not going to work for the economy,” Ho said.

Prioritizing Existing Homes For Residents

Medeiros was the executive director of HomeAid Hawaii, a nonprofit focusing on homelessness, housing development and community engagement, and brings years of experience to the post.

Central to her plan is something she calls “PPP,” “prioritizing, protecting and providing” housing for local residents. For example, she estimates there are 25,000 short-term vacation rentals operating illegally statewide. Converting even a fraction of those into housing for residents could bring thousands of additional homes onto the market, she said.

Meanwhile, imposing, say, a $10,000 annual tax on some 35,000 vacant investment properties in the state could generate $350 million annually.

Another idea: To identify and target for development property already suitable for housing “meaning things like, ‘Do they have on site infrastructure?’” she said.

“If there’s no infrastructure in sight, that’s going to be a lot lower on the list” of priorities, she said.

David Callies, a retired professor of land-use law who has written books on Hawaii’s regulatory scheme, commended Medeiros for spotting the issue of infrastructure, which Callies said he and Hawaii economist Paul Brewbaker have been discussing for years.

“It’s not vacant land,” Callies said, “it’s infrastructure land.”

Another possibility is for the state to agree to invest in infrastructure to help build housing in exchange for commitments by developers to build affordable units. While such commitments, known as exactions, are often required under zoning laws, Callies said there wouldn’t be a problem asking builders to do more than what is required voluntarily under a land-use agreement with the state.

“There’s nothing intrinsically wrong with development agreements like that,” he said.

Collaboration Is Key

Another issue facing any governor is that much of the regulation of housing development lies not with the state but the counties. That makes collaboration key.

Honolulu City Council member Tyler Dos Santos-Tam agreed.

“It is vital that we work hand in hand every step of the way,” said Dos Santos-Tam, a former lobbyist for Hawaii building trade associations.

At the same time, he said, the counties may need financial help from the state to implement some mandates. For instance, he said, while there may be a problem with the way counties issue building permits, simply requiring counties to issue more permits without helping pay for more staff could prove unrealistic.

“If the counties don’t have the resources to carry this out, dictates from the top aren’t going to fix it alone,” he said. “Simply dictating those pieces isn’t enough.”

The administration also will be charged with addressing a waiting list that includes more than 28,000 Native Hawaiian residents who quality for Department of Hawaiian Home Lands properties. The Legislature last session steered $600 million to address the issues.

Green’s newly installed Hawaiian Homes Commission chairman, Ikaika Anderson, will choose between two plans. One, crafted by former Gov. David Ige’s administration, calls to develop 3,163 lots. Another plan, created by beneficiaries and a nonprofit organization, says it will create 13,800 lots through lending programs and other incentives for private developers.

Anderson said that it’s likely the administration could draw from both plans although the administration hasn’t finalized anything.

Green said his administration, including Anderson, are still finalizing housing ideas when it comes to how to spend the $600 million set aside for DHHL.

“We have to work hard to spend that money,” he said. “That is going to be a challenge.”

The Ige administration’s plan would devote most of the money, about $475 million, to develop 2,863 lots currently barren in the DHHL inventory. It also sets aside $35 million to purchase 300 additional lots. The remaining funds would go to other DHHL programs like rent and mortgage assistance.

By contrast, a plan developed by the Sovereign Council of Hawaiian Homestead Associations would devote about $345 million to purchasing developable land and housing units.

The sovereign council plan assumes leveraging current funding to raise more from private developers or lenders. For example, the SCHHA plan would set aside $60 million to produce an expected 3,000 housing units.

Robin Danner, the council’s president, insists that the unit projections are not “pie in the sky” ideas. Private investment is necessary to reduce the DHHL waitlist, Danner said.

“We have to have all pistons firing from industries that have not really had much of a role in the Hawaiian Homestead program. Escrow firms, appraisers,” Danner said.

Reducing the waitlist has been the elusive goal of most DHHL directors. Former Gov. Linda Lingle’s administration seemed to put a huge dent in the waitlist, at times awarding hundreds of leases each year.

But many of those leases were on paper only, and beneficiaries waited years before their homes were built. In the last decade, the state has not awarded more than 100 leases in a year. Between 2014 and 2020, it averaged about 47 lease awards each year.

‘Let’s Be Honest’ About Trade Offs

Medeiros recognizes not everyone wants more housing. She said to address their concerns and avoid problems, transparency will be key. Transparency will include things like communicating through social media and “white board” updates, where Green will share housing data in simple presentations.

Medeiros said she realizes opponents will include not only environmentalists concerned that unbridled development will ruin the state’s beauty, stressing the islands’ ecosystems, creating waste, using vital resources like water and generally imposing costs on public resources. There are also people who want more housing, just “not in my backyard,” she said.

To address the NIMBYs — and identify those who say “yes in my back yard” to housing — Medeiros said she wants to survey the islands to see who wants more homes and who doesn’t.

“I’d like to do neighborhood rankings where we display NIMBY and YIMBY and we just put it out there.” she said. “Transparency once again. Same thing with county rankings and housing.”

Donna Wong, president of the longtime environmental group Hawaii’s Thousand Friends, is not convinced the environment and interests of residents will be protected.

“While affordable housing is a crisis, residents living in existing communities did not cause that crisis,” Wong said.

Fast-tracking housing development without public input from the start risks procedural delays and legal challenges on the back end, Wong said.

“Without including the public who are going to be impacted, they just run the risk of opposition,” she said.

Medeiros said she understands the environmental concerns, but she said working people who are simply not fortunate enough to have high-paying jobs also are not to blame for the housing crisis. She said it’s important that people understand policies to protect the environment have trade offs.

Hawaii residents are being priced out of being able to own or even rent a home because of mandates that don’t take into consideration their well-being and the cost of living, she said.

“There’s an actual cost to our people that climate change policy and environmental policy has, and we have to be honest about it. I can say it without even picking a side: let’s be honest about it,” Medeiros said.