Critics Sue Over Hawaii’s Housing Deregulation, Calling It Attempted ‘Genocide’

Back in July, Hawaii Gov. Josh Green used a novel interpretation of his emergency powers to suspend most restrictions on homebuilding, reasoning that the island’s severe housing insufficiency was a crisis that justified snap, executive-led deregulation.

The governor’s declaration of “yes in my backyard” (YIMBY) martial law proved controversial even with people who otherwise agreed that Hawaii’s thicket of red tape was needlessly driving up housing costs. It is now being challenged by a wide coalition of advocacy groups who do not share the governor’s view that Hawaii housing is overregulated.

Late last week, the public interest law firm Earthjustice filed the suit in Hawaiian state court on behalf of six plaintiffs, including the state chapters of the Sierra Club and the American Civil Liberties Union, as well as two Native Hawaiian cultural advocates and two housing advocacy groups with a history of opposing new market-rate development.

“The governor cannot suspend laws he doesn’t like whenever he feels like it,” said David Henkin, an attorney for Earthjustice. “That’s dictatorship, not democracy.”

Their lawsuit and associated press materials argue that the governor is vastly exceeding his powers under the state constitution and the state’s emergency management law in order to ram through politically favored “luxury” housing projects.

“This proclamation rips apart our constitution to impose the tired demands of developers and real estate speculators, whose decades of profiteering off of our lands and waters is the true culprit behind our housing crisis,” said Wayne Tanaka, Executive Director of the Sierra Club of Hawaii. “Our democracy should not be thrown out the window to build more non-affordable housing.”

The governor’s efforts to “sidestep” laws protecting traditional Hawaiian burials “should be seen as another attempt at genocide,” said Noelani Ahia, a plaintiff.

The genocide claim is seemingly in reference to parts of Green’s order waiving the state’s historic preservation and environmental review laws, both of which play a role in preserving Native Hawaiian cultural resources.

Nevertheless, the governor’s order isn’t a free-for-all.

Developers looking for relief from those laws would be required to get their project certified by a new Beyond Barriers Working Group that includes representatives of local island barrier councils who are tasked with preserving Native Hawaiian remains.

The state’s lead housing officer, another office created by the order, could still require project sponsors to go through environmental review if their development is being planned for a sensitive area.

While it doesn’t require people to build affordable housing projects, the governor’s proclamation instructs the Beyond Barriers working group to prioritize projects with subsidized units. The lead housing officer can also grant regulatory relief to government-sponsored projects without the need for them to be approved by the Beyond Barriers Working Group.

The actual legal challenges raised in the lawsuit brought by Earthjustice therefore focus less on affordability requirements and the potential for genocide and more on the legitimacy of the working group and the lead housing officer.

Hawaii’s emergency management law, which Green’s emergency proclamation relies on, does give the governor sweeping powers to suspend laws in the face of an emergency. It also variously defines emergencies as “an occurrence, or imminent threat thereof” of “naturally or human-caused hazards” that can damage life, property, and the environment.

The lawsuit argues that because Hawaii’s century-old housing shortage isn’t “an occurrence” but rather a long-running problem, the governor can’t invoke his emergency powers to address it.

The lead housing officer and Beyond Barriers Working Group, as children of this illegal emergency, are also illegitimate bodies, it argues.

A number of provisions included in Green’s proclamation, including streamlining the expansion of urban growth boundaries, are laws that the Legislature has considered and rejected. The suit argues that Green is usurping the Legislature’s powers by adopting those policies unilaterally.

It also argues that the governor’s suspension of state open meeting requirements and public records requests for the Beyond Barriers Working group and potentially other agencies approving housing is an unconstitutional modification of the state’s Sunshine Law.

Allies of the governor have argued that the consequences of Hawaii’s housing shortage are indistinguishable from a natural disaster and, therefore, should qualify as a proper emergency.

“We’ve entered seven straight years of population decline. About half of all native-born Hawaiians live outside of Hawaii,” Sen. Stanley Chang (D–Honolulu) told Reason last month. “If you had 15,000 people leaving because of flooding or a hurricane or earthquakes or volcanic eruptions, I think that would certainly qualify for an emergency. The severe [housing] shortage constitutes an emergency as well.”

In a pretty sweeping grant of authority, the state’s emergency management statute also says that the governor will be the “sole judge of the existence of the danger, threat, or circumstances giving rise to a declaration of a state of emergency.”

State officials are standing firm in their defense of the governor’s order.

“The Emergency Proclamation Relating to Housing is a lawful exercise of the Governor’s emergency powers as defined by law, and the emergency rules concerning the Build Beyond Barriers Working Group are valid. The Department of the Attorney General will vigorously defend against the lawsuit in court,” said Hawaii Attorney General Anne Lopez in an emailed statement to Reason.

There are a lot of reasons to be trepidatious about the use of Green’s emergency powers.

The Beyond Barriers Working Group and the state’s lead housing officer’s authority to waive regulations for individual projects could easily devolve into political favoritism for connected developers.

The power to say yes or no to new development is a valuable thing. Baked into that discretion is the temptation to use those powers for cronyism. The fact that the governor’s proclamation suspends various transparency requirements makes the potential for corruption even greater.

At the same time, the worst outcome from that corruption will still just be that new projects get approved without having to go through an arguably equally corrupted system of environmental review, public input, and permission begging.

Unlike other sweeping emergency orders invoked during COVID, Green’s order doesn’t create any obligations or restrictions on private citizens. All it does is create a voluntary process for developers and local governments to speed up housing production in a state with the nation’s worst housing crisis.

Substantively, that’s not a bad thing. We’ll have to wait and see if it’s legal.

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