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<br /> effective ways such as tax increment financing or be implemented as a way to bring order to the
<br /> the establishment of improvement districts to development of cities and towns, a method of
<br /> finance the construction of offsite infrastructure, protecting the people against arbitrary
<br /> as well as the appropriation of capital development practices, and more recently, as a
<br /> improvement project funds.15 means of providing affordable housing in the
<br /> face of rising demand for luxury
<br /> Construction Costs: In many markets, accommodations. There is a sufficient amount
<br /> construction costs are a major part of the price of of evidence to suggest that these functions are
<br /> a new house. There are large differences in still being produced by planners and regulators.
<br /> construction costs across the U.S., and Hawai'i's But, as the proliferation of housing regulations
<br /> construction costs are high. Rose and La Croix continues, however, some observers have had
<br /> (1989), however, showed that the difference in cause to consider the extent of housing
<br /> construction costs was not nearly enough to regulations to be a barrier to production, a
<br /> explain the difference in housing costs across precursor of housing supply inelasticity, and a
<br /> markets. Gyourko and Saiz (2006) also reported pathway to higher housing costs.
<br /> construction costs were not significantly related
<br /> to prices. The larger contributors to building Hawai'i's housing markets are more regulated
<br /> costs were unionization, local wages, local than most other housing markets in the nation.
<br /> topography, and the regulatory environment. Honolulu's score on the Wharton Residential
<br /> Combined with Hawai'i's highly volatile housing Land Use Regulatory Index (Wharton Index18) is
<br /> market, however, construction costs can affect the highest in the nation and David Callies
<br /> individual projects. Construction costs can rise (2010) has painstakingly described the large
<br /> sharply in construction boom periods and make number of individual regulations that affect
<br /> tight-margin projects like workforce housing units housing development in the State.
<br /> very difficult to complete.16 The cost of
<br /> construction has been impacted by the high cost Government regulations and the process of
<br /> of litigation and insurance. The Affordable implementing those regulations have been rli
<br /> Housing Advisory Committee notes that identified as another major impediment to
<br /> "everyone involved from accountant to mason housing production in Hawai'i.
<br /> contractors have insurance costs that go into the
<br /> price of their goods and services. They include: In August 2007, Hawaii accepted an invitation
<br /> property, general liability, professional liability, from HUD to join the "National Call to Action for
<br /> excess liability, unemployment, health, auto, Affordable Housing through Regulatory Reform"
<br /> am
<br /> workers comp, business interruption and even initiative. A statewide Affordable Housing
<br /> terrorism to name a few."17 Regulatory Barriers Task Force, comprised of
<br /> representatives from the counties, business,
<br /> Government Regulations: Housing planning labor, developers, architects, non-profit service
<br /> and regulation came into being and continue to providers, the state, and the legislature, was
<br /> convened to address regulatory barriers to
<br /> 15 Joint Legislative Housing and Homeless Task Force, affordable housing. The task force noted that "in W
<br /> prepared by staff of the Senate Majority Office,with the context of building homes that are affordable,
<br /> contributions from the House Majority Staff Office, government regulations often work against the
<br /> "Report of the Joint Legislative Housing and Homeless goal of delivering more affordable housing.
<br /> Task Force Pursuant to Act 196, Session Laws of Although government policies and regulations
<br /> Hawaii 2005,"January 2006 are often intended to control or direct growth,
<br /> 16Massive 'Aiea workforce housing condo project on hold target resources, and prioritize areas of
<br /> (2016), Hawai'i News Now, June 2016. Download at importance, the unintended consequence is
<br /> http://www.k5thehomteam com/story/32389776/massive often that these regulations add to the cost of
<br /> -aiea-workforce-housing-condo-project-on-hold.
<br /> 17 Mayor's Advisory Housing Advisory Committee, City
<br /> and County of Honolulu, Final Report & 18 Gyourko, Saiz, and Summers, 2007. Index scores were
<br /> Recommendations, April 2006 not calculated for other counties in Hawai'i. '
<br /> Hewai'!Housing Planning Study,2016 Page 12
<br /> ©SMS,Inc. December,2016
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