Honolulu's housing woes extend beyond the simple lack of supply; the city's permitting process is a significant impediment to new construction and developments. A recent analysis by Civil Beat highlights the procedural issues that contribute to the problem, potentially impacting real estate investors, developers, and the broader business community in Hawaii.
The core issue, as the report indicates, is the Department of Planning and Permitting's (DPP) struggle to efficiently process building permits. Delays in approvals, which can stretch for months or even years, lead to increased project costs, deterring investment and exacerbating the housing shortage. The situation is further complicated by the fact the DPP had to temporarily close its building permit front counter to handle the backlog of permits stuck in the prescreen process since the summer. This closure is to give staff more time to give attention to prescreen reviews. GovTech
The slow pace of permit approvals has a ripple effect. Delays inflate construction costs due to rising material and labor expenses, making projects less financially viable. This in turn reduces the supply of new housing units and pushes prices even higher, making homeownership unattainable for many residents.
DPP is taking measures to address the situation, including implementing new software and AI solutions. The AI software will reduce plan review time. However, the success of these initiatives hinges on effective implementation and addressing underlying issues within the department. The launch of new software also added to these problem, Honolulu Star-Advertiser
Real estate developers, investors, and construction firms in Honolulu face considerable challenges due to the permitting process. Businesses must navigate lengthy waits, increased costs, and regulatory complexities. Prospective homebuyers also suffer, as they face limited choices and inflated prices. Streamlining the approval process is crucial for promoting economic stability and creating a more favorable business climate in Hawaii. The temporary closure of the permit counter by Honolulu planning to fix the backlog may be a step in the right direction, but continuous improvement will be needed.
