Land use entitlement laws

By Karen Nakamura Posted in: BIARemodel

No one knows when or if new development is going to occur under the existing land use entitlement system. The state designated Kapolei as the “Second City” thirty years ago in the 1980s, yet projects like Ho’opili were still required to reclassify their lands from agriculture to urban.

Koa Ridge is another example of where the planning for growth and the permitting for that growth seem to be out of sync. Koa Ridge is directly across the street from Tony Honda and Costco in Waipio, yet it took Castle and Cooke more than 10 years to secure a reclassification of the lands from agriculture to urban.

People seem to forget that the time and expense it takes for a project to be developed is reflected in various prices. How much of the prices of a new home should be attributed to the land use entitlement process, not construction or labor, but simply the cost to get the land approved for development?

bia_20140316_01

Allowing for predictability in where growth will occur allows for two things:

• Prospective buyers can assess options for buying a new or existing home.

• Competition is created among small, medium and large developers looking for land to build new homes to satisfy projected demand.

Lack of predictability and limited supply are the principle reasons why the median home prices in Hawaii are at $685,000 and are projected to continue to rise.

What should be done to increase the supply of developable lands in Hawaii? It starts with the individual counties planning for where future growth will occur in their various community/development/general plans. Once these areas have been identified, the State Land Use Commission should reclassify the lands identified for future urbanization based on natural resource management criteria. This would include assurance that the urbanization would have sufficient potable and non-potable water, protection of important agricultural lands, etc.

Once the planned areas for growth have been reclassified to urban, the County will be responsible for re-zoning individual parcels as infrastructure capacity is provided. In order to ensure there is open competition among landowners in the areas of planned growth, the County should reclassify more lands than are actually required, but be flexible in exactly where the rezoning would occur based on willingness of landowners.

Karen Nakamura is CEO of the Building Industry Association of Hawaii.