Steering Growth - Extended Version
6 Leaders Discuss Development in Hawaii
Read the shorter, edited version of this forum here
(page 5 of 7)
Burris: I wanted to stick on the certainty for a second. I’ve always heard that it’s not so much the environmental rules, the planning rules, all the things that are a problem. It’s the lack of certainty. If you knew it would take a certain amount of time to get permits or get told no permits, then you could work plans, but it’s all too vague.
Anderson: I’ve always said that one of the biggest contributors to the high cost of living in Hawaii – be it market houses or affordable housing – is government. Government I think is the biggest culprit in contributing to high cost. And the time it takes before a developer can get a permit can be two years. Haseko was 25 years. Gentry at Waiawa was about 20 years. It seems like we can’t make up our mind as a government. And the permit process, land use, city, county, Kakaako, the duplication. Time is money with the developer. And time, labor cost goes up, real property goes up, interest rate goes up. I mean every month you delay me is a higher cost of my product that I have to pass on. My little project I’m doing has taken me almost two years for a 23-lot subdivision. I got held up seven months for a driveway issue. A driveway issue! Something you could’ve done in 20 minutes. I don’t think government, and I’m going to say government employees to some degree, respects the problems of time and what time does to the cost of living far as the finished product. It’s a mentality. (Bureaucrats think:) “I’ve seen mayors come and go. I’ve seen governors come and go and I’ve been doing it this way for the last 20 years, I’m going to do it this way when you’re gone.” You need a leader to motivate these people, to put some urgency. You have got to excite them that they are participating and they help things get better for their kids as well as yours.
Burris: One of the Economic Revitalization Task Force’s proposals was you would get the permit and then you start moving and then if there is a problem later on you have to fix it rather than waiting for the issue of the permit. Did that ever happen?
Yukimura: Well. I hope not. That is a terrible way. Who does a house that way? I mean, you build something and then you figure out what the next step is and you pick up plumbing here and then you decide. No, you need a plan, but there is in the Northwest, can’t remember which community, they used the consultants there, some planning consultants, and these developers for a major section of a city got their permits in six months and they did it through what they call form-based codes, which was a very long planning process where you define your standard such that every house has to be within 10 minutes of a bus stop. They had very specific requirements, but if you met all these requirements, you got the permit. And so talk about certainty, there was, you know, it was very detailed in terms of design, in terms of street layouts, patterns, and so forth, very much based on Smart Growth principles. In another case, the developer got a standing ovation at his public hearing – that was in British Columbia – because they had done a very inclusive planning process. Both the public process as well as the private planning process had been well done and there were clear standards for the developer.
Doane: It’s very difficult right now; we are so deep in the hole. It’s real hard to see what the future has to offer. I would certainly take into account Mayor Kim’s comments about the broader societal issue here, and housing and the economy are integral parts of it, but they are part of a much larger picture. With medical technology the way it is, I have got a couple of children who have just been born who will be living in the next century. You cannot be thinking about what you are going to do for the next five years or 10 years. Really you need to take the longer view. There are some success stories and they are not necessarily replicable in all areas, but I think that includes Kapolei, except that the infrastructure followed rather than led the housing. But you know what? It was not the worst idea ever to have housing there and a lot of people, they do not like the drive, but it’s giving them an opportunity to buy a home they would never otherwise have had.
Anderson: Where would those people live today if we didn’t do that?
Doane: Even if they are living in Kakaako. That example, the development high rise that we built is to my knowledge the first and the only where we have worked for this gap housing, along with market-priced housing, and that was a 20/80 split. And from a social perpective of people living together, it has worked pretty doggone well. Now it’s not at 80 percent (of median income), but it’s at the 100 and 140 level, but it has worked really well with the market housing. The biggest home run that has been hit in this state in the last couple of decades is from the military and the federal government. They did not have any money. They have houses, like a lot of houses in Kaimuki that are really old. And they had a solution, which was you come in, you (the contractor) get a 50 year deal, and you build a house you got to stay with it. And guess what, there’s a lot of military housing going on that’s created a huge amount of work for people who in this environment would otherwise not be employed. What Outrigger did in Waikiki, you got to feel pretty good about that. They did it on their own. They had their struggles along the way, but that was a really, really good result there. I’ll give you just one small idea and one bigger one in terms of the core because I really believe that no matter what we say on Oahu, we’re going to have bigger traffic problems in the future even with the rail, which is going to make living in the core a lot more desirable. In one sense, I think doing something right in Kakaako over the next 10 or 20 years and having a whole diverse number of housing types has got to be pretty dense.
Photo: David Croxford
Anderson: What kind of a population can you put into Kakaako?
Yokota: Another 20,000 to 25,000.
Doane: Another 10,000 to 15,000 people (than now).
Anderson: All in high rises, though?
Yokota: You do it in a mix. When we looked at the plan – I thought it was a really good plan because there was a large amount of open space. You can do that when there is one landowner, you can plan the area such that you concentrate those free open spaces into a single more usable space for the community as opposed to little spaces. I thought it was a really good plan to do that. You can mix the high rises within, as this will really create more of a variety in the heights as well as in the community. Maybe that is what it takes: a large landowner.
Anderson: Can we force people into a high rise?
Doane: A lot of them want to be there.
Anderson: How many people can you put into a high-rise concrete and glass condominium? I got two kids, I got a new family. I want grass, I want a dog. We’ve always had a hard time figuring what the buyer wanted. When we were looking at the Second City, this is 25 years ago, the argument was all in Ko Olina or to take some up and toward Mililani and the heights as well. Some like high elevation, some like low, but we always found it difficult to direct a person to go into a unit that we thought was good for them.
Yokota: The younger generation is much more likely. They’ve lived in different places and they are much more accustomed to an urban lifestyle. I have had the younger people say, “I do not need the kinds of the size of the units that are typically in high-rise units because my living room is really in the community. I’m out there far more than I’ve been in home.” So I think the younger generation has different expectations. That’s where you’ll have a lot of the growth.
Yukimura: You have the mixed uses, so you’ll have jobs close by, you have services close by. People do not need a car. In Vancouver, you can get around without a car between transit for the far distances and walking or biking for the short distances. And the energy efficiency of that kind of lifestyle is a far less impactful on the earth. And the income market is actually building in those areas. There is a market for it. They are very prosperous communities as long as you have the open spaces, the parks to go to and so forth.
Burris: Another market for Kakaako is those empty nesters, someone who had the house and the dog, but now kids are grown.
Yukimura: That’s a huge percentage of the population.
Anderson: There is a tremendous number of young couples who would be comfortable there, husband and wife, but the moment the first kid comes along, you’re looking for a house. They’re looking for the grass. They’re looking for a little bit of the yard, so you can’t shut that down totally. It’s got to be a balance.
Kane: I think the empty nesters will be attracted to healthcare also. That’s probably one of your single most desired services that empty nesters are looking at.
Burris: You were talking about how the young people could use their neighborhood as their living room, so to speak, like in Tokyo or Hong Kong, where people live in the city. They sleep in their apartments, but they go to restaurants and coffee shops.
Yukimura: It’s another generation. That’s their lifestyle. But there’s not that kind of opportunity here (in Hawaii). There aren’t too many places like that where they can come back and live like that.
Burris: A young couple – let’s say, school teachers, with a combined income of $100,000 a year, or $120,000. Can they buy a livable unit in Kakaako right now?
Yokota: Yes, with an income of $100,000, you should be able to afford to buy a unit.
Doane: Yes. Absolutely.
Yokota: There is a shortage, though, of rental units and I think the state has to find a way to build rental units. On the Neighbor Islands, it easier for landowners to set aside land that can be used for the development of rental units, but in the urban areas, it is very expensive to do that, but like Alan did, you would want to do it within mixed in a high-rise village.
Doane: Hawaii is so unique in a couple of ways. You look at the national industry and there are all these very large companies that own lots of apartments serving different levels of income. In Hawaii, it almost does not make sense. There are individual apartment owners, but there is really no industry. No one builds that kind of product here. The other thing that’s really odd, and it goes back to buying down, is that in most places you go the entry house is worth 75 percent of the value and the land is worth 25 percent . Here you go anywhere in Kaimuki, Palolo, the house is worth 25 percent and the land is worth 75 percent. There is no one solution to all the problems we have, but if there was something where you could provide a lot of houses that could probably use being leveled and if it only represents 20 percent to 25 percent of the value. If you could provide somebody just enough tax incentives so they can get a place on 8th Avenue (in Kaimuki) or something off Waialae (Avenue), that has been sitting there. It was the grandfolks’ home. And the place is worth $600,000 to $700, 000, but the home is only worth $150,000. Do you knock it down and let them build it themselves? Let them build it with small builders. There is this huge amount of wonderful land that can be redeveloped. Take the footprint that we’ve got in some cases and redevelop that and have a policy that is proactively encouraging that. At the same time, that is very limited growth in terms of new footprints in placed in Hawaii. Because there are just so many places here where if you just had a $100,000 to $150,000 or if the owner had a tax credit over five years or something. You would see revitalization occur. And everybody knows we need it right now.
Anderson: If you drive through Kapahulu or Kaimuki on any day, and I drive those streets a lot, there’s a tremendous number of new homes in every block. I guess mom and dad or grandma and grandfather are passing away and the kids are taking it over and their 75- to 80-year-old house, single wall, Hicks-type construction, comes down. But I’m always amazed of all the new construction within the core happening every day, so Kaimuki and Kapahulu in the next 10-15 years, I would imagine is going to be all new.
Burris: How is the rail line going to affect the government of Oahu and the look of Oahu.
Yukimura: Just so you know, it’s not only an Oahu issue. We, at least when I was mayor, we looked at a rail line for Kauai
Photo: David Croxford
Yukimura: Yes, because we just have a belt that’s perfect for transit and fits our plan of villages that become towns and transit in between.
Burris: Is rail going to happen (on Oahu), Jan?
Yokota: Well, I hope so. One of the questions (submitted it advance) was what’s the best way to have development around the rail stations. I think there has to be a very concerted effort to work with developers in the type of plan so there are incentives for development around the rail stations, whether it’s various kinds of financing techniques or a tax commitment or some community facilities. Something like that where it helps the developer build the infrastructure that is necessary to run rail stations. In other words, if you want affordable housing in the area, you want additional facilities around the rail stations, I think it has to be something where the government works or incentivizes private developers. Unless there’s planning there, it’s not going to hold.
Kim: There is transportation problem. Shara says she’s so lucky that she lives only five miles from work, but it still takes her 35 minutes to get to work. I’d quit the first day I’d have to do that. I ride my bike. I’ve read that Honolulu is second only to L.A. in average commute time. One of the reasons I talk so much about Ooma, is the developer has worked with the theme of live, work, and play.
Yukimura: I think transit is the way of the future, if you look at the energy picture in the long run. But it can be done well or it can be done terribly, and I think Jan is right if you don’t plan it, it’s not going to happen. The biggest subscribers of transit are those who are moderate and low income. Look at New York City, Seattle, Portland and so the idea of affordable housing around those transit stops is an incredible opportunity and that’s what they call transit-oriented development pods. So all these opportunities come with the transit and of course we are glad they are including the airport. If you don’t build them right, it’s going to fail. But done right, that’s what will make cities thrive.
Kim: I’ve used your bus for 20 years coming to Oahu. I’ve never rented a car because I love your bus system.
Anderson: But we subsidize it. I mean we subsidize the bus in the multi, multimillions of dollars a year.
Yukimura: We subsidize the private car owners…
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