Hawaiʻi Supreme Court Defines Limits of Governor’s Emergency Powers in Affordable Housing Case

On September 11, 2025, the Hawaiʻi Supreme Court issued a significant opinion in Nakoa v. Governor of the State of Hawaiʻi, SCAP-24-0000401, clarifying the scope of gubernatorial emergency powers under Hawaiʻi’s emergency management statute, HRS chapter 127A. The case arose from challenges to Governor Josh Green’s series of emergency proclamations aimed at expediting affordable housing. 

Background 

Beginning in July 2023, Governor Green declared an “emergency” based on the state’s longstanding affordable housing shortage. Through consecutive 60-day proclamations—now numbering fifteen—the Governor suspended a wide range of state and county laws, including statutes on environmental review, historic preservation, zoning, and procurement. Early proclamations also established a “Build Beyond Barriers Working Group” with authority to certify housing projects for expedited approval. 

Community members challenged these actions, arguing that lack of affordable housing is not the type of “emergency” envisioned by the statute, and that the proclamations unlawfully rewrote or suspended laws reserved to the Legislature. 

The Court’s Framework 

The Court rejected a narrow reading of “emergency.” Longstanding problems, the Court held, can reach a crisis point that qualifies as an emergency under HRS chapter 127A. At the same time, judicial review remains available even though the statute designates the governor as the “sole judge” of emergencies. 

Most importantly, the Court adopted a dual test for reviewing gubernatorial emergency actions: 

1. The proclamation must be rationally related to public health, safety, and welfare; and 
2. The measures taken must be reasonably necessary to address the emergency. 

This test is more demanding than ordinary “rational basis” review of legislation, requiring a factual foundation and proportionality between the emergency declared and the government’s response. 

Application to the Housing Proclamations 

Applying this framework, the Court drew a sharp line between the early and later proclamations: 

• First through Fifth Proclamations (2023–early 2024): Invalid in scope. Although the housing crisis rationally related to health, safety, and welfare, the creation of a new working group and the opening of fast-track certification to all housing projects—not just affordable housing—was not reasonably necessary. The Court declined to retroactively void projects already approved, but emphasized these actions exceeded statutory authority. 
• Sixth through Fifteenth Proclamations (Feb. 2024–present): Valid. By narrowing eligibility to affordable housing and transferring decision-making back to the Hawaiʻi Housing Finance and Development Corporation, these proclamations were reasonably tailored to the emergency. The most recent version, the Fourteenth Proclamation (July 2025), expires September 26, 2025. The Court also rejected claims that the proclamations violated separation of powers or Hawaiʻi’s constitutional suspension of laws clause, holding that HRS chapter 127A lawfully delegates authority to suspend laws and adopt rules during emergencies. 

Key Takeaways 

• Judicial Review Standard Set: Hawaiʻi courts will now assess emergency proclamations under a dual test—rational relation and reasonable necessity. 
• Limits on Emergency Powers: Broad suspensions of laws and new governance structures untethered to the specific emergency will not be upheld. 
• Affordable Housing as Emergency: The Court recognized that chronic social issues, if severe enough, can constitute “emergencies,” but responses must still be proportional. 
• Prospective Guidance: While early proclamations exceeded authority, they are not retroactively invalidated. The ruling provides prospective guidance for governors, mayors, and litigants. 

Implications 

For land use practitioners, developers, and agencies, this decision means that emergency proclamations can temporarily override zoning, environmental, and procurement laws, but only if narrowly tailored to the emergency at hand. Affordable housing qualifies as such an emergency, but the Court has signaled that executive responses must be carefully limited to avoid becoming substitutes for ordinary legislation.

Presentation at the 2022 VIRTUAL BAR CONVENTION

Elusive Affordable Housing Policy

My current work at the Hawaii Community Development Authority has me thinking a lot about affordable housing.

Halekauwila Place, an affordable rental project in Kakaʻako.

Among other things, the development guidance policy for the Kakaʻako Community Development District requires, “integration both vertically and horizontally of residents of varying incomes, ages, and family groups; and an increased supply of housing for residents of low- or moderate-income may be required as a condition of redevelopment in residential use.”

While 34 percent of units built in Kakaʻako since 1987 were built as reserved, workforce, or low income housing, there is still great demand in all income categories.  This problem is not new in Hawaii, and various policies, programs, and initiatives have been proposed by the various counties and the state to address the issue.  However, the solution is elusive.

I recently came across two articles that give some insight into the challenge of creating effective affordable housing policies:

• Joe Cortright, The end of the housing supply debate (maybe), City Observatory, Aug. 11, 2017, at http://cityobservatory.org/the-end-of-the-housing-supply-debate-maybe/.
• Dan Bertolet, Cruel Musical Chairs (Or Why Is Rent So High?), Sightline Institute, Oct. 31, 2017, at http://www.sightline.org/2017/10/31/video-cruel-musical-chairs-why-is-rent-so-high/.

Cortright’s piece explores the rhetoric of the affordable housing debate.  The rhetoric has Balkanized stakeholders into unbending pluralities; however, there is little data to support any one side of the issue.  Bertolet’s piece is a creative illustration of the “more supply will solve the problem” philosophy, which challenges the “you can’t build your way out of the problem” philosophy.  Both lack solid data to support either conclusion, but both sound reasonable.   

Would a trusted, independent think-tank in Hawaii help?  It would collect, model, and interpret housing data; propose policies, tools, and programs; and get us closer to the objective we all can agree on: Housing choices for everyone in every income group.

California Supreme Court Upholds San Jose Inclusionary Zoning Policy

In Cal. Bldg. Industry Assn. v. City of San Jose (opinion filed on June 15, 2015), the California Supreme Court upheld San Jose’s inclusionary housing ordinance that requires new residential developments to sell 15 percent of proposed new units at an affordable housing price.

In reaching its decision, the Court opined, “[T]he ordinance does not impose an ‘exaction’ on developers’ property under the takings clauses of the federal and California Constitutions.” In the Court’s opinion, this is not a case of an unconstitutional condition or exaction as asserted by California Building Industry Association (CBIA), but rather an “example of a municipality‘s permissible regulation of the use of land under its broad police power.” This constitutional “police power” analysis is significant in that it is far more difficult to overcome and removes a landowner's' right to just compensation for a government taking of private property.

The City of San Jose enacted an inclusionary housing ordinance that, among other features, requires all new residential development projects of 20 or more units to sell at least 15 percent of the for-sale units at a price that is affordable to low or moderate income households.  (See below for a description of the ordinance.)  CBIA’s challenge rested primarily on the unconstitutional conditions doctrine, as applied to development exactions under the takings clauses (or, as they are sometimes denominated, the just compensation clauses) of the United States and California Constitutions.

The CBIA maintained that the ordinance was invalid on its face on the ground that the City, in enacting the ordinance, failed to provide a sufficient evidentiary basis to support its policy. The ordinance failed to demonstrate a reasonable relationship between any adverse public impacts or needs for additional subsidized housing units in the City caused by or reasonably attributed to the development of new residential developments. CBIA argued that the conditions imposed by the City's inclusionary housing ordinance would be valid only if the City produced evidence demonstrating that the requirements were reasonably related to the adverse impact on the City's affordable housing problem that was caused by or attributable to the proposed new developments that are subject to the ordinance’s requirements, and that the materials relied on by the City in enacting the ordinance did not demonstrate such a relationship.

The Court disagreed with CBIA and dismissed the takings based argument.  The Court opined, “[T]he conditions imposed by the San Jose ordinance at issue here do not require a developer to pay a monetary fee [which may have been a takings issue] but rather place a limit on the way a developer may use its property.” The Court further opined, “[T]he conditions are intended not only to mitigate the effect that the covered development projects will have on the City's affordable housing problem but also to serve the distinct, but nonetheless constitutionally legitimate, purposes of (1) increasing the number of affordable housing units in the City in recognition of the insufficient number of existing affordable housing units in relation to the City's current and future needs, and (2) assuring that new affordable housing units that are constructed are distributed throughout the City as part of mixed-income developments in order to obtain the benefits that flow from economically diverse communities and avoid the problems that have historically been associated with isolated low income housing.”

As a result of this opinion, municipalities in California have far greater latitude for imposing inclusionary zoning requirements by ordinance on residential developers, so long as its legislative bodies can show a “reasonable relationship to the public welfare” that has “a reasonable basis in fact . . . to support the legislative determination.”

Summary of San Jose's Inclusionary Zoning Policy

• Applies to all residential developments within the City that create 20 or more new, additional, or modified dwelling units
• 15 percent of the proposed on-site for-sale units in the development shall be made available at an affordable housing cost to households earning no more than 120 percent of the area median income for Santa Clara County adjusted for household size
• The requirement increases to 20 percent of the total units in the residential development if (1) units are provided off-site, or (2) developer opts for in-lieu fees for equivalent units
• Incentives include (1) density bonus, (2) reduction of parking spaces, (3) reduction in set-backs, and (4) financial subsidies and assistance from City in sale of affordable units
• A developer may seek a waiver from these requirements by showing "no reasonable relationship between the impact of a proposed residential development [and the ordinance]"

The San Jose inclusionary housing policy is further discussed on the City's web site at https://www.sanjoseca.gov/index.aspx?NID=1305. 

PBS Insights Panel Discusses Housing, Agricluture, and Other Land Use Issues

Selected Tweets from last night's live show, PBS Insights.

Souki: Ag is not just land; it's also labor and capital. How can we enable more people to farm? #pbsinsights
— PBS Hawaii (@pbshawaii) February 27, 2015

Atta: The city is trying to shift to multiple modes of transportation and put jobs and homes closer together. #pbsinsights
— PBS Hawaii (@pbshawaii) February 27, 2015

Reppun: "We need to change the kind of agriculture that we do." #pbsinsights
— PBS Hawaii (@pbshawaii) February 27, 2015

Minerbi: "We need, of course, both (housing and ag)." #pbsinsights
— PBS Hawaii (@pbshawaii) February 27, 2015

Hawaii's ag land, highlighted in green. #pbsinsights pic.twitter.com/DBmNhBFJYG
— PBS Hawaii (@pbshawaii) February 27, 2015

Can the State Land Use Commission Downzone Property that a Developer does not Develop in a Timely Manner?

The short answer is yes--but it depends.

In DW Aina Le‘a Development, LLC v. Bridge Aina Le‘a, LLC, the Hawaii Supreme Court considered whether the State Land Use Commission properly downzoned 1,060 acres of land slated for a residential project. 

Background.  In 1989, 1,060 acres of land on the Island of Hawaii was reclassified from agricultural to urban to allow for the development of a residential community.  The reclassification was made subject to numerous conditions, including a condition that at least 60 percent of the residential units be affordable.  The Commission granted requests to amend the affordable housing condition for the Aina Le'a project.  (Note: During this period of the Commission's history, it was not uncommon for the Commission to require a 60 percent affordable set-aside for residential developments.  Anecdotally, the Commission reduced the affordable housing requirements for these projects to a more economically feasible set-aside, upon request.)

By 2005, the condition required the landowner, Bridge Aina Le‘a, LLC (Bridge), to set aside 20 percent of the units as affordable.  Because of Bridge's perceived failure to comply with certain conditions, in December 2008, the Commission issued an order to show cause (OSC) why the land should not revert to its former agricultural land use classification.  Soon thereafter, Bridge informed the Commission that it intended to assign its interest in the land to DW Aina Le‘a Development, LLC (DW) through an installment sale. DW subsequently invested more than $20 million in developing the site.  Nevertheless, after proceedings over the course of several years, the Commission issued an order reverting the land to the agricultural use district.

Conceptual Plan
Source: http://www.ainaleaasia.com/our-current-project.html

Boundary Amendment Process and Enforcement.  Under HRS § 205-2, there are four major land use districts in which all lands in the state are placed: urban, rural, agricultural, and conservation.  The counties may further zone lands in the state urban district.  Counties have limited authority to zone in the other districts, except for conservation, where the state regulates exclusively.

Since 95 percent of lands in the state are in the conservation or agricultural district, landowners frequently desire a land use district boundary amendment to allow residential, commercial, and other uses.  HRS § 205-4 generally sets forth the procedures the Commission must follow in amending a district boundary.   The Commission is required to find by a clear preponderance of the evidence that the reclassification is reasonable, not violative of HRS § 205-2 (district classification standards), and consistent with the policies of HRS § 205-16 (compliance with the Hawaii state plan) and HRS § 205-17 (decision-making criteria).

HRS § 205-4(g) gives the Commission broad authority to impose conditions on boundary amendment petitions.  While the Commission can determine whether a condition it imposes is being violated, in general, enforcement of these conditions are left to the counties under HRS § 205-12.  However, a 1990 legislative amendment to HRS § 205-4(g) empowered the Commission "to void a boundary amendment, after giving the landowner the opportunity for a hearing, if the landowner failed to substantially commence use of the land in accordance with its representations."  In other words, under certain circumstances, the Commission may revert or downzone a property to its former state land use boundary classification (e.g., as in this case, from urban back to agricultural).

Holding.  The Court set-forth the following principles for the Commission when it considers reverting a boundary designation to its former classification:

• First, the Commission must issue an Order to Show Cause, which is set-forth in the Commission's rules at HAR § 15-15-93.
• Second, the Commission must determine "whether the petitioner has substantially commenced use of the land in accordance with its representations." 
• Finally, if the answer to the above question is yes, the Commission is required to follow the procedures set forth in HRS § 205-4.  If no, the Commission may revert the land without following the procedures set forth in HRS § 205-4.

Applying the aforementioned principles to the facts of this case, the Court held that the circuit court correctly concluded that the Commission erred in reverting the property to agricultural use without complying with the requirements of HRS § 205-4, because by the time the Commission reverted the property, DW and Bridge had substantially commenced use of the land in accordance with their representations.

The Court reasoned that although there is no definition for "substantially commenced" in the statutes, the intent of the legislature was to "deter speculators who obtained favorable land-use rulings and then sat on the land for speculative purposes."  The Court relied on the circuit court's analysis of this finding, noting that the petitioner had, among other things, continued to actively proceed with preparation of plans and studies, including building plans and studies for the environmental impact statement.  In addition, sixteen townhouses were completed on the property.

Other Holdings.  Although the Court did agree with the circuit court on the substantive portion of the case, it disagreed on three other items worth noting.

First, specific documents that were not before the Commission should have been struck from the record on appeal.  HRS § 91-14 specifically confines an agency appeal to the administrative record.

Second, the Commission did not violate DW and Bridge's constitutional rights to due process and equal protection.  Both Bridge and DW had notice and a meaningful opportunity to be heard before the Commission reverted the property. And, given the circumstances, the Commission's conduct was not “arbitrary and unreasonable.”

Third, Bridge’s and DW’s equal protection rights were not violated because the record does not establish that the LUC lacked a rational basis for its decisions.

Homeless in Hawaii

Many speculate about the cause and effect of homelessness in Hawaii, but to this date, there has not been (1) a comprehensive study to figure out who the homeless are, or (2) a program based on that analysis to develop targeted, strategic interventions.  So it's no wonder that the many and varied "solutions" cobbled together by well intended decision-makers have not ameliorated the problem.

Ala Moana Park

But 100,000 Homes Campaign's practical, common sense approach could make some inroads.  The two aforementioned steps are part of 100,000 Homes process to ensure that public monies are better focused on providing housing for individuals who need them most. Read more in, Registering the Homeless, from this month's edition of Governing.

For more on housing issues in Hawaii, view the Affordable Housing archive.

Seattle Votes to Tax Themselves to Provide more Affordable Housing

While Hawaii continues to kick the can down the road on affordable housing and impose draconian affordable housing requirements on developments, Seattle put the question to its voters.

Voters responded by overwhelmingly passing an affordable-housing levy, according to the Seattle Times. Details of the levy include:

• It will cost homeowners about $17 per $100,000 of assessed property value annually;
• The levy will help build or save 1,670 apartment units for renters earning less than 30 percent of the city’s median annual income; and
• The levy will provide assistance for 550 renters annually, help fund 180 first-time home purchases and allow the city’s Office of Housing to buy land or buildings for future development.

According to the Seattle Office of Housing, since 1981, Seattle voters have approved one bond and three levies to create affordable housing.

See Marc Ramirez, Seattle overwhelmingly passes affordable-housing levy, Seattle Time, Nov.3, 2009. See also Affordable Housing for more on affordable housing issues.

Maui Developer Proposes 660 Affordable Homes for Maui Project

Developer Jesse Spencer through his venture MVI, LLC, is proposing a 1,100 unit residential project for Maalaea, Maui, Hawaii. According to the project's June 2009 EIS Preparation Notice filed with the Office of Environmental Quality Control, the project is called the Ohana Kai Village Affordable Housing Project. It will include 440 market priced residential units, 660 affordable residential units, 7 acres of commercial space, and 16 acres of public space.

The project will take advantage of the state's 201H program, which allows qualifying projects to be exempt from "all statutes, ordinances, charter provisions, and rules of any government agency relating to zoning and construction standards for subdivisions, development, and improvement of land and the construction, improvement, and sale of dwelling units." See HRS Sec. 201H-41. In particular, the project will be seeking an exemption through the 201H process from a community plan amendment and zone change (both existing land use entitlements are inconsistent with the proposed project, particularly the commercial uses). However, 201H was adopted by the legislature to reduce the cost of developing affordable housing to encourage the private sector to invest in the affordable housing market.

Other notable comments in the EIS Publication Notice include the observed presence of foraging Nene geese on the site and 3 archaeologically significant resources. The project traffic will be fed from the Honoapiilani Highway. Water will be provided from a private well and waste water treatment will be processed onsite. A majority of the site has been designated as Prime Agricultural land under ALISH. Mitigation is discussed in the EIS Publication Notice.

The EIS Publication Notice was posted in The Environmental Notice on June 23, 2009 and is within the 30-day public comment period.

HUD, DOT and EPA Partner Up for Sustainable Communities

Federal agencies DOT, HUD and EPA are partnering up to coordinate policy for sustainable communities. The agencies have identified six livability principles as the foundation for their cooperation:

1. Provide more transportation choices
Develop safe, reliable and economical transportation choices to decrease household transportation costs, reduce our nation’s dependence on foreign oil, improve air quality, reduce greenhouse gas emissions and promote public health.

2. Promote equitable, affordable housing.
Expand location- and energy-efficient housing choices for people of all ages, incomes, races and ethnicities to increase mobility and lower the combined cost of housing and transportation.

3. Enhance economic competitiveness.
Improve economic competitiveness through reliable and timely access to employment centers, educational opportunities, services and other basic needs by workers as well as expanded business access to markets.

4. Support existing communities.
Target federal funding toward existing communities – through such strategies as transit-oriented, mixed-use development and land recycling – to increase community revitalization, improve the efficiency of public works investments, and safeguard rural landscapes.

5. Coordinate policies and leverage investment.
Align federal policies and funding to remove barriers to collaboration, leverage funding and increase the accountability and effectiveness of all levels of government to plan for future growth, including making smart energy choices such as locally generated renewable energy.

6. Value communities and neighborhoods.
Enhance the unique characteristics of all communities by investing in healthy, safe and walkable neighborhoods – rural, urban or suburban.

Read more at http://www.dot.gov/affairs/2009/dot8009.htm.

Land Use Commission Revokes Agricultural Boundary Designation for Bridge Aina Le'a LLC

On May 1, 2009, the State Land Use Commission unanimously voted to revert Bridge Aina Le'a LLC's property to its former classification, agriculture, pursuant to HAR Section 15-15-93. This rarely used, extraordinary remedy was a response to Bridge's failure to comply with the Commission's January 17, 1989 Order, as amended on July 9, 1991. Without the urban designation, the project cannot proceed.

The proposed project located on Waikoloa, island of Hawaii, consisted of 1, 924 residential units, a 25-acre commercial parcel, a 30-acre school site to be dedicated to the State Department of Education, 26-acres of neighborhood parks, and a network of biking/walking paths. As part of the Commission's 1989 grant of district boundary amendment from agricultural to urban, the Commission required that 60 percent of the proposed residential units be set aside for affordable housing (i.e., made affordable to residents earning 120 percent of the median income).

In 2005, 16 years after the urban designation, Bridge petitioned the Commission for an amendment to the affordable housing condition, because the 60 percent requirement made the project economically infeasible. By Order dated November 25, 2005, the Commission granted Bridge's request and reduced the affordable housing requirement to 20 percent. The new requirement required that half of the affordable homes be made affordable to residents earning 120 percent of the median income and the other half to residents earning 140 percent of the median income. The total amount of affordable homes required was 385. The Commission also required that the 385th unit be ready for occupancy within 5 years from November 17, 2005, i.e., November 17, 2010.

Under HAR Section 15-15-93(b), the Commission "shall" issue an order to show cause when:

. . . it has reason to believe that there has been a failure to perform according to the conditions imposed, or the representations or commitments made by the petitioner, the commission shall issue and serve upon the party or person bound by the conditions, representations, or commitments, an order to show cause why the property should not revert to his former land use classification or be changed to a more appropriate classification.

According to the Commission's January 9, 2009 Minutes, Commissioner Judge, with the support of fellow commissioners, issued an Order to Show Cause on Bridge for its failure to move forward with the project. Specifically, the Commission pointed out Bridge's failure to obtain permits or develop infrastructure since the Commission's 2005 extension.

A final findings of fact, conclusions of law, and decision and order in this matter is forthcoming.

Report Surveys State and Local Strategies to Increase Affordable Housing

A recent report by the National Association of Home Builders, Research on State and Local Means of Increasing Affordable Housing Highlights, surveys and analyzes various affordable housing strategies across the country.

The report observed that successful places rely on an array of strategies to encourage affordable housing.  It noted that inclusionary zoning, which requires a set-aside or exaction of affordable units, has mixed results.  Successful programs have strong incentives for developers.

The analysis describes each policy framework, assesses whether the policy worked, and provides a discussion of pros and cons.  The policies surveyed are divided into categories.  

Land-Use Strategies for Encouraging Affordable Housing:

• Planning for Affordable Housing
• Zoning for Affordable Housing
• Overlay Zoning Districts
• Affordable Housing Districts
• Inclusionary Zoning
• Density Bonus Programs
• Growth Centers and Corridors
• Changes in Zoning to Encourage Affordable Housing
• Accessory Dwelling Unit Ordinance
• Increased Use of Manufactured Housing
• Adaptive Reuse of Underutilized Buildings
• Performance Zoning (e.g., form-based zoning).
• Allowing Various Types of Development
• Cluster Development
• Infill Development
• Mixed-Use Development
• Planned Unit Development
• Transit-Oriented Development
• Affordable Housing Ordinances

Financial Strategies for Encouraging Affordable Housing

• Property Taxes
• State Tax Credits
• Impact Fees
• State Incentives
• Housing Trust Funds
• Housing-Linked Deposits
• Linkage Fees
• Tax Increment Financing
• Profit-Sharing
• General Obligation Bonds
• “Double Bottom Line” Private Equity Funds
• Shared Equity

A third category called "other" includes increasing education for folks needing affordability programs, creating public-private partnerships, and expediting permitting.

Transit Oriented Development and Affordable Housing

In a recent entry at HawaiiBusiness.com, two sides fired off on whether Honolulu's transit project will impact the availability of housing for working families.

Transit per se will not affect the availability or unavailability of affordable housing. In order to provide more affordable housing, transit must be paired with transit oriented development (“TOD”). According to the Transit Cooperative Research Program, sponsored by the Federal Transportation Association, TOD has three primary traits (1) Mixed-use development; (2) Development that is close to and well-served by transit; and (3) Development that is conducive to transit riding.

According to a 2002 study, Factors for Success in California’s Transit-Oriented Development, commissioned by the California Department of Transportation,

TOD can contribute to more affordable housing. TOD can add to the supply of affordable housing [1] by providing lower-cost and accessible housing, and [2] by reducing household transportation expenditures. Housing costs for land and structures can be significantly reduced through more compact growth patterns.

First, providing lower-cost and accessible housing is achieved through various developer incentives that promote development near transit stations in exchange for affordable units, including:

• Reducing the minimum parking requirements or setting maximum parking requirements around major transit stops,
• Density bonuses, and
• Property tax abatements to developers of higher-density, mixed-use, residential developments.

In addition to developer incentives, potential homeowners may be eligible for a Location Efficient Mortgage (“LEM”). An LEM, sponsored by Fannie Mae, is a mortgage that helps people become homeowners in location efficient communities such as TOD projects.

Second, reducing household transportation expenditures can also promote housing affordability. The average annual expenditure per capita in Honolulu for transportation between 2004 and 2005 was about $10,000. TOD can help to reduce the cost of transportation by reducing a homeowner's dependence on vehicles. According to the Center for Neighborhood Technology,

A growing body of research has shown a strong relationship between increased density, transit access and pedestrian friendliness on the one hand, and reduced vehicle miles traveled and automobile ownership on the other.

The bottom line: Transit paired with TOD creates an opportunity for increased housing affordability.

For more on affordable housing policies in Hawaii see this blawg’s Affordable Housing archive.

Significant Rulings in Federal District Court Challenge to Maui's Residential Workforce Housing Policy

On July 3, 2008, the U.S. District court issued an order ("Order") in the Kamaole Pointe, LLP v. County of Maui case, where the Plaintiffs (Kamaole Pointe, et al.) are challenging the constitutionality of the Maui’s Residential Workforce Housing Policy ("Ordinance").

For you non-lawyers out there, the U.S. District Court is a Federal trial court. The Court’s Order in this case is regarding the parties’ motions for summary judgment offered prior to trial. In summary judgment motions, parties attempt to get the other party’s case, or portions of their case, dismissed based on the law and evidence in the record. In legalese: A court will grant summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

In short, the outcome of the Order is that some claims remain for trial and some were dismissed. In particular, the Court will not hear Plaintiffs’ unconstitutional conditions claim. The Court reasoned as follows:

. . . (1) despite its reliance on the allegedly distinct doctrine of unconstitutional conditions, Plaintiffs’ Motion is appropriately construed as a facial takings claim; (2) generally, Williamson County’s ripeness requirements apply to facial takings claims; (3) the Ninth Circuit previously recognized the “substantially advances” test as the only means of mounting a facial takings challenge free from Williamson County’s state compensation requirement; (4) the Supreme Court abrogated “substantially advances” as a takings test in Lingle; (5) the Nollan/Dolan standard has not been extended by the Supreme Court or the Ninth Circuit to apply outside of the facial takings claims realm; and, (6) as a result, to the extent that Plaintiffs raise a facial taking claim here, whether based on the federal or State Constitution, Plaintiffs must first seek compensation via State court.

Related to the facial and as-applied takings claims, the Court dismissed the Plaintiffs’ claims to the extent that Plaintiffs explicitly bring takings claims or claims that are in fact takings claims (as in the case of their unconstitutional conditions argument), as none of these claims are ripe. The claims are not ripe because, among other things, “Plaintiffs indisputably have not sought compensation in State court [which] proves immediately fatal to all their takings claims.” However, the Court ruled, because “these claims are subject to further development in State court, at which point they could conceivably be ripe," the Court dismissed these claims without prejudice.  Therefore, with regard to Plaintiffs' takings claims, the Plaintiffs must seek compensation in State court first, then the Federal court may hear its takings claim.

The Plaintiff’s equal protection and substantive due process claims are still viable. In the Court’s words, “there remain serious concerns about the constitutional viability of the Ordinance in light of the relevant due process and equal protection standards[.]”

The Equal Protection Clause of the 14th Amendment commands that no state shall deny to any person within its jurisdiction the equal protection of the laws. The Court found that “Plaintiffs’ equal protection claim is twofold and consists of: (1) a general argument that the Ordinance is arbitrary and irrational, and (2) a “class of one” argument that Plaintiffs were intentionally, and without rational basis, treated differently from others similarly situated during their appeal for a waiver.” For the first equal protection claim, the Plaintiff need only show that the Ordinance is “arbitrary and irrational.” For the second equal protection claim, the Plaintiffs must show that they were intentionally, and without rational basis, treated differently from others similarly situated during their appeal for a waiver.

The Substantive Due Process guarantee protects individuals against government power arbitrarily and oppressively exercised. The Court ruled that in this case, the proper standard of review for "a substantive due process challenge to legislation that neither utilizes a suspect classification nor draws distinctions implicating fundamental rights is reviewed pursuant to the 'arbitrary and irrational' standard."  Thus the Plaintiffs need to show that the Ordinance is "arbitrary and irrational," which is a lower standard than proposed by the County.

The case now moves forward in Federal Court, sans the takings claims.  If the Plaintiffs prevail on the equal protection and/or substantive due process claims, the takings claim may be moot.

Related articles include:  Maui's Workforce Affordable Housing Bill: Unconstitutional?, Update: Challenge to Maui Workforce Housing Ordinance, J. Ezra hears Motions for Summary Judgment from County of Maui and Kamaole Pointe et al., and The Rise and Fall, and Rise Again, of Due Process Challenges to Government Takings.

Maui Department of Housing and Human Concerns Web Page

The Maui County Department of Housing and Human Concerns, Housing Division, is charged with rule making and implementing Maui's controversial Residential Workforce Housing Policy. The Housing Division hasn't adopted rules yet...but it does have a new Web site with links to the ordinance and the 2008 Affordable Sales Price Guidelines.

Update (Aug. 2, 2011): Web site moved to http://www.co.maui.hi.us/index.aspx?nid=117. Maui County Residential Workforce Housing Policy guidance can be found at http://www.co.maui.hi.us/index.aspx?NID=251.

Update: Challenge to Maui Workforce Housing Ordinance, J. Ezra hears Motions for Summary Judgment from County of Maui and Kamaole Pointe et al.

This is an update of the ongoing case, Kamaole Pointe Development LP v. County of Maui, Case No. 1:2007cv00447, U.S. Dist. Ct. Haw., filed August 23, 2007, wherein the plaintiffs claim that Maui’s Workforce Housing Policy is unconstitutional on its face and therefore void. I previously discussed the complaint in Maui's Workforce Affordable Housing Bill: Unconstitutional?.

On June 2, 2008, J. Ezra at the US Federal District Court Hawaii heard oral argument from the parties on their respective motions for summary judgment. Although Kamaole’s claim appears to include equal protection, due process, and taking challenges, J. Ezra’s primary concern was ripeness of the 5th Amendment takings claim.

J. Ezra noted that Kamaole’s claim is essentially a takings claim; therefore, Kamaole needs to avail itself of state court jurisdiction before filing in federal court. Kamaole referred the court to the recent post-Lingle decision in Crown Point Development, Inc. v. City of Sun Valley, No. 06-35189 (9th Cir., Nov. 1, 2007). Crown Point reversed the U.S. 9th Circuit Court’s long held position, based on Armendariz v. Penman, 75 F.3d 1311 (9th Cir. 1996) (en banc), that the 5th Amendment’s Takings Clause subsumes or “preempts” substantive due process claims.

J. Ezra noted that the Maui ordinance might be “terrible” in its present form, but that his charge is to determine the constitutional issues.

His order will be available in 2-3 three weeks.

SCOTUS Opines on Facial Challenge to Washington State Election System Statute: How this Opinion May Affect Unconstitutional Land Use Statutes

On March 18, 2008, the U.S. Supreme Court validated Washington State’s primary election system, holding that the voting law does not on its face impose a severe burden on political parties’ associational rights, and that respondents’ arguments about voter confusion can be evaluated only in the context of an as-applied challenge. Washington State Grange v. Washington State Republican Party, (Nos. 06-713 and 06-730), March 18, 2008.

In its opinion, the Court concisely stated the underlying law and issues that a court must consider when determining the validity of a facial challenge to a statute. The following is the relevant excerpt from the case (citations omitted):

[A] plaintiff can only succeed in a facial challenge by “establish[ing] that no set of circumstances exists under which the Act would be valid,” i.e., that the law is unconstitutional in all of its applications. While some Members of the Court have criticized [this] formulation, all agree that a facial challenge must fail where the statute has a “ ‘plainly legitimate sweep.’ . . . In determining whether a law is facially invalid, we must be careful not to go beyond the statute’s facial requirements and speculate about “hypothetical” or “imaginary” cases. . . . Exercising judicial restraint in a facial challenge “frees the Court not only from unnecessary pronouncement on constitutional issues, but also from premature interpretations of statutes in areas where their constitutional application might be cloudy.”

Facial challenges are disfavored for several reasons. Claims of facial invalidity often rest on speculation. As a consequence, they raise the risk of “premature interpretation of statutes on the basis of factually barebones records.”. . . Facial challenges also run contrary to the fundamental principle of judicial restraint that courts should neither “‘anticipate a question of constitutional law in advance of the necessity of deciding it’ ” nor “ ‘formulate a rule of constitutional law broader than is
required by the precise facts to which it is to be applied.’ ” . . . Finally, facial challenges threaten to short circuit the democratic process by preventing laws embodying the will of the people from being implemented in a manner consistent with the Constitution. We must keep in mind that “‘[a] ruling of unconstitutionality frustrates the intent of the elected representatives of the people.’”

The Court’s analysis does not depart from precedent and is instructive when arguing that a particular land use statute is unconstitutional on its face. For example, if a land use law is drafted such that it would effect an unconstitutional taking in all its applications, then that statute is invalid on its face. This means that an affected party would not need to wait until he is harmed by the statute before he can bring a suit. This is particularly relevant in the recent challenge to Maui’s Residential Workforce Housing Policy which I discuss here. That ordinance begs the question: Can a 50 percent uncompensated taking of private property without any supporting nexus study ever be constitutional in light of the 5th Amendment?

State Legislature Considers How it Can Increase the Cost of Homes in Hawaii

With the median price of single family homes well over $600,000.00 in Hawaii, one would ask: Why is the legislature considering mandating solar heating at an average cost of $5,600.00 per home?

Add the above cost to the more than 10 percent cost of LEED Silver compliance for single family homes (the Office of Planning has been repeatedly demanding a LEED Silver mandate at the State Land Use Commission) and you have close to a $70,000.00 tax on all new single family homes in Hawaii.

The problem, however, is not the state's laudable (some would say, necessary) intent to curb our use of fossil fuels, but the means by which it has chosen to get there: command and control mandates. Mandates benefit no one. In this case, it would push home ownership out of the reach of many Hawaii residents. It would put up another roadblock in the already ailing housing market, which is limping along in light of the mortgage crisis and economic recession. A slower market means less supply, and it doesn’t take an expert to tell us that demand for affordable homes in Hawaii is at a crisis level.

The alternative to mandates is economic and regulatory incentives, like tax credits, rebates, a break in permitting fees, removing barriers to entry for alternative energy providers, and an incentive package that would encourage investment in the alterative energy industry. These are just a few of the tried and successful programs implemented in other municipalities.

Rewarding good behavior encourages the natural development and implementation of green technologies. Technology will improve and become more affordable as investment in those technologies increases and products become more readily available in Hawaii. It’s the law of economics, the same factor that pushes additional investment into the alterative energy market as the cost of fossil fuels rise.

Instead of taxing potential homeowners out of the housing market and slowing the supply of housing, the state should develop incentives that will encourage the use of green technologies in residential developments.

How Much Agricultural Land Does Hawaii Need?

In, Proposals aim to sustain agriculture, the Honolulu Advertiser reports that “[o]verall, Hawai'i has lost roughly 50,000 acres of farmland since 1978” and the “state currently has about 1.3 million acres of farmland.”

What the article does not report is that according to the most recent numbers in the Hawaii Data Book, there is a total of 4,112,388 acres of land in the State of Hawaii, of which, 47.99% is designated for Conservation, 46.94% is designated for Agricultural, 4.81% is designated for Urban, and 0.26% is designated for Rural. Of the total acreage in Agriculture reported by the Advertiser and in the Hawaii Data Book, not all of the land is actively farmed because of an over supply of land after the fall of Hawaii's large plantations.

Here are some questions that need to be asked and addressed:

• How much agricultural land does Hawaii need to sustain itself?
• Nearly half the state is classified as agricultural, but how much of that land is actually farmed since the fall of the big plantations in Hawaii?
• Is there an unmet demand for diversified agriculture?
• Is farming in Hawaii economically feasible?
• Will keeping almost half of Hawaii in Agriculture stimulate creation of the kinds of jobs that will stem Hawaii’s brain drain or entice Generation X, et al., back to Hawaii?
• When nearly half of Hawaii was classified as Agricultural, much of the land was not suitable for farming as rated by, for example, the Land Study Bureau, the US Geological Survey, and the University of Hawaii. Is it wise to keep those lands classified as Agricultural?
• Given Hawaii’s unmet housing demand by young professionals, blue collar workers, and the shortage of industrial space, would it be better to have a more balanced land use policy instead of one that has nearly 95 percent of Hawaii’s lands kept from development (the supply of land and burdensome regulations being the primary contributors to housing costs as I discussed here)?

Policymakers are faced with a tenuous balancing act as they move forward with agricultural measures during this legislative session. Their decisions will have both short-term and long-term implications for the vitality of Hawaii.

Inclusionary Zoning: Advice from Experience

The October 2007 issue of the ICMA Management Perspective reports that more and more municipalities are adopting inclusionary zoning measures to “ensure that their communities have enough housing for entry-level teachers, police officers, and other essential workers living on moderate incomes.”

Inclusionary zoning is intended to reverse the trend where “middle-income and working-class residents who don’t already own a home have been priced out of the communities where they work.” The article observes that the “lack of workforce housing affects overall quality of life, as more residents spend more time commuting long distances to their jobs.” In tailoring effective inclusionary zoning measures, local governments must balance community needs for moderately priced homes while ensuring that requirements and regulations don’t take too big a toll on the bottom line for builders. This means incentives for landowners including density bonuses which allow them to build more units on less land.

The article makes three recommendations for a successful inclusionary zoning program: inclusionary zoning must be mandatory, inclusionary zoning should apply to a broad spectrum of workforce income levels, and any campaign to implement inclusionary zoning requires broad-based support.

The article can be found here. Thanks to the Municipal Research and Services Center of Washington for reporting on this article.