ISLAND VOICES
Developers already are paying
By Dan Davidson
Hawai'i builders have helped pay for, and will continue to pay for, the costs of growth in Hawai'i, including schools, but a careful balance must be maintained between public and private costs and responsibilities. Otherwise, an unacceptable cost burden will be imposed on new homeowners and new business.
On June 14, The Advertiser ran a front-page story headlined "Builders here face sharing cost of growth." The first sentence stated that "The state's decision this week to require that schools be built before residents move into homes proposed by a major developer in Central O'ahu means Hawai'i builders will now have to grapple with government's insistence that they help bear the costs of growth."
Thus both the headline and the story created the false impression that builders in Hawai'i have not been paying for the costs of growth. In fact, Hawai'i builders have been paying their fair share of the costs of growth for many years.
Developers in Hawai'i routinely pay for all "on-site" roads, sewer lines, water systems, drainage and other facilities entirely within their subdivisions. Since the early 1980s, developers in Hawai'i have been required by government to participate in the funding of larger "off-site" public facilities, i.e. regional roads, sewer and water systems, and drainage facilities that serve areas greater than their development. These requirements cost millions of dollars.
In addition, developers in Hawai'i have been required to provide social benefits such as affordable housing, day care centers, and job training opportunities. Finally, for many years now, developers in Hawaii have contributed land or cash or both for public schools.
Thus, contrary to the Advertiser article, builders in Hawai'i have been grappling with paying for the costs of growth for an entire generation. There still are important issues that need to be addressed. When developers are required to provide public facilities and social programs that used to be provided by the government, those costs get passed on to the consumer in the form of higher housing prices, higher commercial and industrial rents, and higher hotel room rates.
Since it is the consumer of new development who ultimately pays these costs, the decisions of government regarding how much of the costs of growth should be imposed on new development require a careful balancing of interests. Builders in Hawai'i have long recognized their obligation to provide a "fair share" of the costs of growth. For the most part, Hawai'i government agencies and the development industry have been able to work collaboratively on sharing the costs of growth on the basis of fairness and common sense.
When the balance is lost, and too much of the costs of growth or social programs are imposed on new homeowners or new business, the results are negative for the entire community. Ambitious and well-intended "affordable" housing programs imposed in the 1980s have been scaled back or eliminated because they ended up hurting more housing consumers than they helped.
Similarly, if too many off-site public facility costs are imposed on a project by the state or the county as part of the land-use approval process, the result will be an uneconomical project that will not be built. This will deprive the community of housing options and the other economic benefits of the development, including construction jobs and permanent jobs.
Requiring a private developer to build schools in advance of its residents, which is the subject of the June 14 Advertiser story, appears to be a new example of government losing the appropriate balance between public and private costs, and public and private responsibilities.
Dan Davidson is executive director of the Land Use Research Foundation of Hawai'i, a nonprofit research and trade association whose members are Hawai'i landowners and developers.
