Permit Pileup
Honolulu Yanks ‘Renovation Aloha’ Permit After Civil Beat Exposes Illegal Work
HGTV hosts Tristyn and Kamohai Kalama are facing backlash because some of their speedy projects lacked proper permits.
By Christina Jedra | December 6, 2024
Honolulu is revoking a building permit issued to the home-flipping hosts of the HGTV show “Renovation Aloha” after a Civil Beat investigation identified work done without a county review.
The show captured Tristyn and Kamohai Kalama transforming a disjointed, derelict property in Kalihi into a high-end home suitable for multigenerational living. They combined two structures, lifted part of the home onto stilts, added a new roof and renovated multiple kitchens and bathrooms – a $425,000 job, according to the show.
The permit, however, mentions only new windows and a carport and says the work cost $80,000.
“They essentially submitted plans with incorrect information, similar to some of the monster homes developers,” Dawn Takeuchi Apuna, Honolulu’s director of planning and permitting, said in an email. “As a result, we are in the process of revoking the permit.”
Kamohai and Tristyn Kalama, pictured at their event Priced Into Paradise in October, did major construction on a Kalihi property for their show “Renovation Aloha.” The permit reflected only a fraction of their work. (David Croxford/Civil Beat/2024)
What that means for the Kalamas or the current homeowners is unclear. Takeuchi Apuna declined to comment further but noted she may have more to say next week.
Meanwhile, the couple’s skirting of the rules has ignited a firestorm of conversation across the islands and on social media, from Reddit and YouTube to the popular Instagram account MyKailua. Their forgoing of permits has invited a backlash from some.
Honolulu resident Mai Hall, who is Hawaiian, said she had high hopes for a show that features a Hawaiian man and his wife. But what she’s learned disappointed her.
“We don’t need that hewa. We don’t need that ʻaʻole pono,” she said, using Hawaiian words to refer to “wrongdoing” and “not doing what is right.”
Others blame the permitting department for moving at such a glacial pace that flipping homes on the up-and-up would be impossible.
“At some point a proper response to massive overregulation and bureaucracy is to just show them the Middle finger,” a Civil Beat commenter wrote.
Featured in the first episode of “Renovation Aloha,” the Kalihi property was one of several where Civil Beat discovered discrepancies between the work shown on television and what was described in building permits.
The building plans, reviewed by Civil Beat, make no mention of the new roof or lifting the foundation of part of the house. None of the permit documents for that property mention plumbing, despite multiple kitchen and bathroom renovations. Plumbing repairs can be done without a permit, but only if they cost under $2,500.
The flippers did obtain a permit for electrical rewiring, which can be obtained right away online.
The Kalamas and their attorneys did not respond to a request for comment. On Thursday, Civil Beat spoke briefly with the contractor listed on the permit, Song Lin Zhang of SL Construction, but there was a language barrier, and it wasn’t clear whether he understood what he was being asked.
When the Kalamas bought the Kalihi home featured in their first episode it had a tree growing out of it. During construction, they said they were worried the house might collapse. (David Croxford/Civil Beat/2024)
Teri Fukuhara-Le, who bought the Kalihi home with her husband Andrew, was unavailable for comment on Thursday.
The Les previously told Civil Beat that they’re exploring their legal options after they found structural problems with the home. The couple noticed mold in their son’s room, they said, which led to the discovery of cracks in the home’s siding. They said they didn’t know their home had unpermitted work.
Six of the eight properties featured on the first season of “Renovation Aloha” were issued violation notices for starting construction before permit approval. The other two were also put on the market before the county gave the OK, public records show.
The Kalihi property was assessed a tripled building permit fee of about $1,400 and a fine of about $2,800 for starting work before the permit department approved the plans, according to the permitting department.
The county is supposed to inspect projects during construction and compare observations with approved building plans to ensure safety standards and code requirements are met. When work is done outside the scope of the permitting process, homebuyers are left to rely on the contractor’s word that the property is safe.
Home inspections completed as part of real estate transactions are done after the walls are sealed up and are therefore more superficial.
Buyers of homes with unpermitted work can run into problems if a neighbor complains or when the owners want to make their own permitted additions or alterations. If the county inspector visits the property to review the new project and sees unpermitted work, they can require retroactive permits and assess penalties.
Even if the work was done prior to the current owner buying the place, the plans have to match the work, according to Cheryl Cudiamat, president of the engineering firm Structural Hawaii.
“Anytime you go in for a new permit, it has to match, so it will be their cost to permit it eventually,” she said.
If a county inspector finds the unpermitted work is not up to code, the county can call for it to be removed at the owner’s expense.
Council member Matt Weyer said he hopes HGTV will fix the reported problems. (David Croxford/Civil Beat/2024)
Honolulu City Councilman Matt Weyer, chairman of the housing committee, called Civil Beat’s findings concerning, and said he has empathy for the buyers who might not have been aware of what they were getting into.
“I definitely would hope they’re able to get a remedy,” he said. “HGTV has deep pockets. They should know better. Hopefully they step in and fix it.”
A message left with an HGTV media coordinator was not returned.
Scott Startsman, a realtor on Oahu, said he has a checklist for his clients when it comes to flipped homes.
“Was it permitted? OK, who did the work? If they say ‘It’s all licensed contractors,’ great. Give me the name. Give me the company. Tell me the info. I’m going to look ’em up,” Startsman said. “If they won’t do that, then it’s a red flag.”
The Kalihi property was assessed a tripled building permit fee of about $1,400 and a fine of about $2,800 for starting work before the permit department approved the plans, according to the permitting department.
The county is supposed to inspect projects during construction and compare observations with approved building plans to ensure safety standards and code requirements are met. When work is done outside the scope of the permitting process, homebuyers are left to rely on the contractor’s word that the property is safe.
Home inspections completed as part of real estate transactions are done after the walls are sealed up and are therefore more superficial.
Buyers of homes with unpermitted work can run into problems if a neighbor complains or when the owners want to make their own permitted additions or alterations. If the county inspector visits the property to review the new project and sees unpermitted work, they can require retroactive permits and assess penalties.
Even if the work was done prior to the current owner buying the place, the plans have to match the work, according to Cheryl Cudiamat, president of the engineering firm Structural Hawaii.
“Anytime you go in for a new permit, it has to match, so it will be their cost to permit it eventually,” she said.
If a county inspector finds the unpermitted work is not up to code, the county can call for it to be removed at the owner’s expense.
Permit Pileup
For ‘Renovation Aloha,’ Permit Violations Are The Cost Of Doing Business
As the saying goes, it’s better to ask for forgiveness than permission. The Kalamas have turned that adage into profit.
By Christina Jedra
Kamohai and Tristyn Kalama are transforming derelict properties on Oahu into homes for local families, but they’ve left a trail of permit violations in their wake. (HGTV/Renovation Aloha)
Husband and wife home flippers Kamohai and Tristyn Kalama have a low tolerance for delays.
On their HGTV reality show “Renovation Aloha,” a lag in a tile shipment or a contractor’s laziness threaten the profitability of turning Oahu eyesores into million-dollar listings.
“Our margins are razor thin on this house, so we gave ourselves a timeline of 12 weeks max,” Tristyn said of a termite-infested property in Mililani.
As the show has gained popularity and gears up for a second season, viewers have taken to social media to ask: On an island plagued by notoriously long permitting times, how is it that the Kalamas are getting their permits approved quickly enough to renovate, sell their properties and turn a profit?
The answer is simple: They’re not.
For each of the eight properties featured on the show’s first season, the couple began renovating before a single building permit was issued, according to a Civil Beat review of public records. Instead, they applied for permits but forged ahead with their work before the approval came in. In many cases, the homes were sold with sparkling new kitchens, glamorous bathrooms, new decks — none of it permitted.
Even when permit applications were eventually approved by Honolulu Department of Planning and Permitting, or DPP, some covered only part of the work the Kalamas broadcast to their millions of viewers, leaving buyers with unpermitted alterations and additions that could cause them headaches later. The unpermitted work featured in Season 1 includes major structural, electrical and plumbing upgrades.
Andrew Le and his wife Teri Fukuhara-Le, who purchased the Kalihi flip featured in the first episode, said they had no idea major elements of their renovation were not included on their permit. They’re now grappling with cracks in their concrete siding which they fear could be a sign of deeper problems with the house.
“This is our first home,” Andrew Le said. “So we’re not well versed in the process of how it’s done, what we should be checking. It’s a lot of trust that’s placed onto our realtors and trusting that the seller is giving us a quality and safe and properly done home.”
Tristyn and Kamohai Kalama declined repeated requests to be interviewed for this story and did not respond to a detailed list of questions. In response to Civil Beat’s inquiries, the couple emailed a brief statement:
“As we currently do, we encourage everyone to go through the process of pulling permits, work within guidelines set forth by DPP, and understand the processes in efforts to further advocate for themselves, their families, and the greater community, in order to effect long lasting positive change.”
Given an opportunity to review the facts that would be published in this story, the Kalamas called them “factually inaccurate and unsubstantiated” but declined to specify what they believed was wrong.
Behind the scenes, the couple and their buyers are sometimes cited and fined, when violations are identified, but the penalties pale in comparison to the profits the Kalamas say they rake in.
Four of the renovation projects featured throughout Season 1 were penalized with higher permit fees and violations amounting to about $20,000, according to totals provided by the city permitting department. That’s less than 2% of the $1.3 million in profits the couple touted on their show.
In some cases, Civil Beat identified disparities between the construction shown on TV and the scope of work reported on permits, but the permitting department did not take action. The permitting department did not respond to a request to explain why.
The Kalamas have not faced the consequences designed to punish recurring violators because each of their violations has occurred on a different property, Honolulu permitting director Dawn Takeuchi Apuna told Civil Beat. The law is written, she said, to crack down on offenders with repeat offenses on the same parcel.
The Kalamas say on their YouTube podcast that real estate turned them into millionaires, and they’re working to teach others to do the same. In October, they co-hosted Priced Into Paradise, a real estate expo at the Blaisdell Center. (David Croxford/Civil Beat/2024)
Meanwhile, the Kalamas have drawn a following as real estate influencers, another source of income.
On their YouTube podcast Deals & Aloha, they tell budding investors they can “create money out of thin air” through real estate. Over the summer, they sold admission to a course at $3,000 a pop on “how to redevelop Hawaiian homes with Aloha and integrity.” And last month, they co-hosted an expo called Priced Into Paradise at the Blaisdell with Honolulu City Councilwoman Andria Tupola that was attended by hundreds of people.
“They’re definitely doing what most people shouldn’t be doing, which is to not go through our process in order to start work.”
Honolulu permitting director Dawn Takeuchi Apuna
For the Kalamas, the repeated violations of the city’s building rules seem to be the cost of doing business. By the time the city permitting office notices, if they do notice, the Kalamas have already moved on to the next property.
“They’re definitely doing what most people shouldn’t be doing, which is to not go through our process in order to start work,” the permitting director said.
However, the legal process has its own flaws. Permit applicants have had to wait months, and in some cases years, while costs for labor and materials continue to rise, a problem the Kalamas addressed in written testimony supporting a bill introduced by Tupola that would allow homeowners to build while permits are pending.
“We should be allowed to work on our homes to meet our needs while waiting for an outdated and corrupt system to process our permits,” Tristyn Kalama wrote.
TDawn Takeuchi Apuna, Honolulu’s permitting director, said she’s working on streamlining the permit process. (David Croxford/Civil Beat 2024)
Amid intense pressure to cut wait times, Takeuchi Apuna has ushered in technological upgrades, and residential code review time has dropped from an average of six months to nine days, DPP told the Honolulu City Council last month. However, that represents just one segment of the permitting journey, which can include reviews by agencies assessing impacts to wastewater, stormwater, fire hazards and historic preservation.
Most of the permits Renovation Aloha did seek took an average of 10 months to obtain this year and last. One of the properties is still waiting on an application submitted more than a year ago.
The Kalamas held most of their Season 1 properties for an average of only eight and a half months.
Still, Takeuchi Apuna said it bothers her when people cut the line.
“It’s unfair to those doing the right thing,” she said.
Beyond a matter of principle, unpermitted work can expose homebuyers to risks and hidden costs long after the cameras stop rolling.
The county’s review is designed to provide official inspections during construction that can catch safety hazards. Without that, buyers are left to rely on the contractors’ word that the build is up to code.
“Buyer beware, for sure,” Dayna Robertson, a Big Island realtor, said of unpermitted work generally. “If you have someone doing your electrical work and they’re not a licensed electrician, and no one is inspecting their work, gosh, you know, I wouldn’t want your house to burn down.”
A Risky Proposition
Generally, renovations require permits, although there are some exceptions, including:
Repairs worth less than $10,000
Plumbing and electrical repairs if they’re worth less than $2,500
Remodeling that does not involve the relocation of rooms
Painting, cabinetry, countertop work, floor coverings and replacement of windows or doors
The valuation on the permit should cover all construction and finishing work, including painting, roofing, and other permanent work.
When Do You Need A Building Permit In Honolulu?
In one of the episodes, the Kalamas point out wobbly framing, which Kamohai calls “concerning AF,” and scold their contractor for the quality of his work. Those issues were later resolved, according to the show. But that’s the kind of problem mid-construction inspections are designed to catch, according to Robertson.
During a real estate transaction, buyers typically hire a home inspector to assess the property. But they can only inspect what they can see, Robertson said.
“That’s why we have county inspectors who are supposed to inspect during various parts,” she said, “so they can see the wiring in the walls before you put the sheetrock up to make sure it’s being done properly.”
For the Le family, the purchase of their home was an exciting milestone. Now they’re considering a lawsuit
When the Kalamas bought the place, it had a tree growing out of it. The show’s premiere detailed its facelift, which involved elevating an entire section of the home several feet off the ground, installing a new roof and multiple kitchen and bathroom renovations.
The Kalamas said on camera that they were concerned about the project’s safety.
“You’re talking about jacking up a structure that’s not a solid structure to begin with,” Tristyn Kalama said on the show.
“Yeah, we risk the walls falling down,” Kamohai Kalama responded.
The Kalihi home featured in Episode 1 had a tree growing out it. The Kalamas renovated it and sold it to the Le family.
The Kalamas told viewers their work came with a price tag of $425,000. Their permit, however, suggests they simply replaced some windows and installed a new carport. The total cost reported to the county: $80,000.
Within a year of moving into their Kalihi dream home, the Les said they noticed mold in their son’s room. When they ripped off the drywall, they discovered cracks in the concrete siding they said were significant enough that the light from outside was shining through.
“I just want to be able to get some type of response; we feel like it’s the pono thing to do.”
Homeowner Andrew Le
The couple found their gutters were directing water toward the house, softening the soil and causing the house to sink. They are looking for a structural engineer who can help.
The Les sent the Kalamas a letter to express their concerns this past summer but said they have not heard back.
“I just want to be able to get some type of response; we feel like it’s the pono thing to do,” Andrew Le said, using a Hawaiian word for moral, “just to address an oversight or a mistake and try to make it right.”
Buyers of unpermitted or underpermitted structures can find themselves on the hook for county penalties and after-the-fact permits, which are harder to obtain and cost three times the regular rate.
If the work is later found to violate the county code, the new owners could be required to tear it out at their own expense. The new homeowners may also face liability and denials of insurance claims.
“At the end of the day it’s the person who purchases it who is on the line for the building that they own,” Roberston said.
From an insurance perspective, having unpermitted work is “definitely a very risky move,” according to Jing Ai, a professor of finance, risk management, and insurance at the University of Hawaii’s Shidler College of Business.
“Even if you have homeowners insurance, you may not be protected in the case of a loss,” Ai said.
For the home flipper:
Potentially limiting buyers to those with large quantities of cash
Risk of fines and higher permit fees
For the buyer:
Challenges securing financing
Uncertainty about safety of the property
Could face denials of future insurance claims
Potential liability
If work is not up to code, city could order its removal at the owner’s expense
Risk of fines and higher permit fees
The Risks Of Unpermitted Work
Other buyers also appear to be unaware of the potential risks they’ve taken on.
The permit for the Mililani home shown on Episode 6 did not include the new retaining wall installed against a hill in its backyard. It likely should have, according to the city permitting director.
The seller’s disclosure form asked the Kalamas whether there was any unpermitted work on the property. The document, reviewed by Civil Beat, shows they checked off a box labeled NTMK—"not "to my knowledge.”
Sellers are legally required to fully and accurately disclose all material facts about the property to their buyers. According to state law, sellers who fail to do so may be liable to buyers who incur costs.
Civil Beat contacted each of the buyers of the homes featured on the show. Most did not respond to requests for comment. Others declined to talk about it.
Steven Lipton, who purchased the Kailua property featured in Episode 7, said he is happy with his purchase. He did receive a violation notice from the county but said he heard through his realtor that the Kalamas have agreed to take care of it. He is now looking for a lawyer to help him sort it out.
As Renovation Aloha’s first season was filmed and as it aired, complaints started rolling in to the Honolulu Department of Planning and Permitting.
“Caller stated this property was featured on the Hawaii tv renovation show,” a county employee wrote in notes about the Enchanted Lake home featured in the finale. “This house was completely gutted, the roof removed, the rear deck removed, and completely remodeled without a permit. The show admitted they spent over $300,000 on the renovation, but they were able to do that with a repair permit?”
DPP produced violation notices for six of the eight projects for starting work before a permit was issued.
But when the potential upside is anywhere from $80,000 to $350,000, according to profit totals shared on the show, taking a chance on a $4,000 to $6,000 hit per home may be a risk worth taking, at least for the flippers.
Profiting Without Permits
The way DPP handles violations means the Kalamas face few consequences for building first and getting permission later.
DPP gives violators 30 days to correct their transgressions. In the Kalamas’ case, the violation is cured once DPP approves their permit application, Honolulu’s permitting director said, and DPP gives these kinds of violators leeway given the department’s own delays.
Despite the Kalamas’ repeated violations, their activities are not considered “recurring” under city law because each one is on a different property, Director Dawn Takeuchi Apuna said.
As it is now, violators can be fined up to $50 per day.
“Maybe there needs to be a higher fine to the developer or the contractor that is just doing that type of repetitive work,” she said.
The Repeat Offender Loophole
“Following the letter of the law for every permit and everything you do as permit times stack up, it really becomes not possible to turn around the investment in any reasonable time," said Justin Tyndall, a University of Hawaii economist who specializes in housing policy.
“You set up a system where the only way you can make money is to break some rules; you attract a certain type of person who’s willing to do that.”
For the Les’ home, the Kalamas’ company, Stand Firm Developments, was assessed a tripled building permit fee and a $2,800 fine for building before a permit was issued, according to the city. The department has not issued a violation notice for exceeding the scope of the permit.
That project netted a $200,000 profit, according to the show.
That home wasn’t the only one for which there was a disconnect between the numbers broadcast on the show and those on public records.
In the second episode, the Kalamas added a bedroom and bathroom to a bee-infested fixer upper which are not reflected on tax records. The show reported a $350,000 renovation cost, but the permit covers only $20,000 of alterations and does not mention any plumbing work.
The Kalamas reported a $350,000 profit.
At a Kaneohe property on Pahia Road, one of several on the street that the Kalamas have flipped, the couple only permitted the carport, which the permit says cost $30,000. On the show, Kamohai Kalama said “no extra permitting” was needed because they weren’t adding square footage.
However, the Kalamas featured what they said was $205,000 worth of work, including lifting up part of the house and moving the kitchen – activities that meet the city’s criteria for a permit.
TThe Kalamas renovated a property on Pahia Road in Kaneohe for “Renovation Aloha.” Their building plans claim “no work done” to the existing dwelling, but on the show, viewers saw them lifting up the foundation, moving the kitchen and doing other work. (Honolulu DPP building plans)
The Kalamas bought and sold the Pahia Road house within six months. The carport permit didn’t come in until the following year.
The show reported an $88,000 profit.
Apart from “Renovation Aloha,” the couple, via two companies – Stand Firm Developments and TK Investment Properties – has flipped numerous homes on Oahu in the past several years, and has been cited at least six times for building without or beyond the scope of permits, public records show.
At one Kaneohe property earlier this year, Stand Firm Developments was ordered to stop work after it “partially demolished a house, dug trenches and rerouted plumbing and has poured a slab,” according to the permitting department. Records show the home hasn’t gotten a permit in more than 30 years.
Purchased in February for $980,000, it is currently on the market for $1.5 million.
People are “almost forced in the direction of doing unpermitted work just to stop financial hardship and complete improvements on their homes.”
Tristyn Kalama, co-host of “Renovation Aloha”
The Kalamas outlined their point of view in their written testimony for Tupola’s bill, which failed to pass.
“The people who submit permits are trying to do things right way and only get penalized for it, it is not right,” Tristyn wrote. “Because of the penalizations, peope (sic) are almost forced in the direction of doing unpermitted work just to stop financial hardship and complete improvements on their homes.”
Kamohai agreed, writing in his testimony: “As business owners, We employ and stimulate, support the local economy, many mouths are fed through our line of work. And to not be able to do that in a timely manner is detrimental to our business, to owners, to workers, and the over all community.”
In an interview, Tupola said the Kalamas may have experienced a learning curve when it comes to the permits they need.
“If they’re saying ‘We’re going to proceed and pay fines,’ ‘kay. They’re rectifying whatever they need to rectify, and they’re doing what DPP is asking. That’s complying, right?” she said.
“Aside from the Kalamas, I have told this to DPP numerous times: The longer you guys take to expedite these processes, the more people are just not going to come to you.”
Takeuchi Apuna said she is focused on reducing her department’s wait times so that people don’t feel a need to build without permits in the first place.
“We’re going to get to a point where people should be able to put in an application and get their permit – so long as they do a good job addressing comments and putting in quality plans – in less than a month,” she said. “I think that it’s coming soon.”
Kailua homeowner Rhonda Burk tried to approach the permitting process the right way.
When her elderly dad needed help around the house, Burk envisioned putting an accessory dwelling unit, or ADU, in her backyard so her daughter could move in and help as a caregiver.
She started preliminary county paperwork in 2021 and submitted a permit application in early 2022.
It took two and a half years for the permit to be issued. By then, her father had died.
So when Burk started watching “Renovation Aloha,” she was confused.
“My first thought was, why is it that it looks like they purchased the house and then within days they’re demoing and building it?” she said. “Why is it taking me three years? Why did it take them what looked like three days, three weeks? What’s going on? I don’t understand it.”
A Tale Of Two Permits
Rhonda Burk stands on a recently poured concrete slab in her yard. She waited more than two years for permit approval of her accessory dwelling unit, or ADU. Across her fence, “Renovation Aloha” is filming an upcoming episode at a house without a permit. (David Croxford/Civil Beat/2024)
With each delay to Burk’s own project, the cost kept rising. With labor and material cost increases, she said she’s paying $40,000 more today than she was quoted three years ago.
“It’s getting me upset,” she said. “I went from $160,000 to close to $200,000 because of the time that it took.”
Burk finally got her permit in August. A few days later, the Kalamas bought the property across from Burk’s backyard. Soon after, construction workers and a film crew appeared, and Burk recalls hearing demolition begin inside the house.
“My first thought was, why is it that it looks like they purchased the house and then within days they’re demoing and building it?”
Kailua homeowner Rhonda Burk
A Civil Beat reporter and photographer visited Burk on a recent Friday afternoon. As she stood on the freshly poured concrete slab she waited more than two years to install, Kamohai Kalama and a construction crew could be seen from over Burk’s fence, working on the neighboring property.
Talking through the fence, Kamohai Kalama chastised Civil Beat for tracking down the couple’s latest project.
“I don’t understand what this has to do with anything,” he said as his workers’ equipment buzzed and hummed in the background.
Civil Beat could have asked permission to come onto the property and take photos, he said. Our photographer then asked if we could do just that. Kalama said no.
An HGTV producer who identified herself only as “Shelly” said the production would rather Civil Beat not report on the property so as not to “ruin all of the reveals for the show we’re all working really hard on.”
“Let’s set up a time to speak on the record versus having a conversation through a fence,” she said. “We’re shooting right now. We’re filming.”
Shelly took a Civil Beat reporter’s business card but has not contacted us.
Rhonda Burk holds an old photo of her dad and two children. She had hoped her daughter could move onto her property to help care for Burk’s dad. (Christina Jedra/Civil Beat 2024)
Grassroot Institute of Hawaii
Seven low-cost ways to speed up permitting in Hawaii
By: Jonathan Helton
Policy Brief, October 2024
This policy brief from the Grassroot Institute of Hawaii proposes seven cost-effective solutions to reduce delays in the building permit process. It highlights strategies like preapproved plans, simplified solar project approvals, and fee reductions, all designed to accelerate construction and help address Hawaii's housing shortage.
Permit Pileup
The Backlog Of Honolulu Building Permits Is Taking A Toll On City Revenue
Time is money, and it’s not just permit applicants who lose. The city pays a price, too.
By Christina Jedra | Posted: June 6, 2024
The new Raising Cane’s restaurant in Pearl City was a financial win for the city.
Before the eatery was built, the owners were paying about $62,000 in city property taxes for what was then an empty lot. By the time the restaurant opened in 2022, the property’s value had jumped by $1.5 million, and the tax bill increased to $82,000.
But the county didn’t get to collect that extra $20,000 right away. After a permit application was submitted in May 2020, Honolulu’s Department of Planning and Permitting took a year and seven months to approve it. The increased tax bill didn’t go into effect until 2023.
Had the plans been approved and construction started by the October 2020 tax assessment deadline, the city would be up to $40,000 richer today.
When an empty lot at 1240 Kuala St. transformed into a restaurant, its property tax bill went up. Had it been permitted and built sooner, the county could have gotten even more revenue. (Left photo: Google Streetview/2019; Right photo: David Croxford/Civil Beat/2024)
As Honolulu’s permitting department struggles to keep up with its workload, there is a growing gap between the number of applications DPP receives and the number of permits it issues. The mounting backlog is a major frustration for applicants, and a Civil Beat analysis indicates it is also hurting the city itself.
Each permit issued in fiscal year 2023 represented an average of more than $220,000 in taxable construction work and over $1,400 in building permit fees, according to a Civil Beat review of county permitting statistics. The thousands of others left to wait are worth millions of dollars in city revenue.
In the 2023 fiscal year alone, Honolulu received close to 20,000 permit applications but issued fewer than 15,000. The difference — carried over into the following year — represents an average of more than $1 billion in taxable construction work and nearly $7 million in building permit fees.
In some cases, like that of Raising Cane’s, the city is missing out on a year or more of increased tax revenue from properties whose value is set to rise due to new construction or renovations. Honolulu property tax rates vary from .35% for owner-occupied homes to 1.39% for hotels and resorts.
While the city may tax that new construction and collect those fees in the future, the delays mean it’s unable to invest those earnings in services today.
“That’s just basic economics,” said Beth Giesting, a former director of the Hawaii Budget and Policy Center. “A dollar you can get today is worth more than one you can get next year or five years from now.”
While the number of applications DPP receives hasn't changed much over the years — it's usually around 15,000 per year — the department's ability to process them in a timely manner has tanked, city data shows.
A department that used to be staffed by knowledgeable, longtime employees now struggles with a constant turnover of workers with little experience reviewing permits. And it didn't help that several seasoned DPP officials were busted in a bribery scheme in 2021 that sent six people to prison. Making matters worse, DPP has relied on antiquated computer systems, a lack of standard operating procedures and what the department says is a decline in the quality of plans it receives from applicants.
While the department says it is working to address all of these challenges, the confluence of factors have nevertheless resulted in a backlog that has built upon itself year after year and puts projects big and small on pause – a loss for property owners and for the city.
The sooner construction starts, the sooner the city can tax it, even if the work isn’t completed by the county’s Oct. 1 property tax assessment deadline, according to Honolulu budget director Andy Kawano. If the work is only 50% done, for example, the tax bill will factor that in, he said. When a project is delayed, so is the increased assessment.
Take the case of a newly constructed home on Uhu Street in Kapolei. The permit application was submitted in January 2021 but wasn’t approved until a year later, according to city permitting records. After the home was built, the property tax bill more than doubled, property records show, going from about $2,100 to $5,300.
If the permit had been issued quickly and construction had begun by the tax assessment deadline in October 2021, the city could have captured at least part of that tax bump in 2022. Instead, it didn’t collect an increase until 2023.
It's hard to say whether any particular delay was DPP's fault. Public records don't indicate whether specific projects were stalled due to hold-ups on DPP's end or that of the applicant.
Calculating total city-wide revenue losses due to permit delays is also difficult due to the vast number of variables involved. But it’s clear that the growing delays at the permitting office are taking a chunk out of the county’s potential earnings, according to Dylan Moore, a University of Hawaii economist who reviewed Civil Beat’s findings.
“It looks like a failure of government policy,” said Moore, whose work focuses on public finance.
The city says it is working to speed up permit approvals with the aim of efficiency, not necessarily to bring in more money.
“That’s not our mission, to create revenue,” DPP Director Dawn Takeuchi Apuna said. “We certainly want to receive property taxes, and people want to use their properties to the fullest potential under a permit. We’re focused on fixing the process.”
Dawn Takeuchi Apuna, the director of the Department of Planning and Permitting, said the office is laying the groundwork for longterm improvements. (David Croxford/Civil Beat/2024)
Honolulu Managing Director Mike Formby acknowledged that DPP’s delays could amount to county revenue losses, at least for residential projects.
He said it's a murkier picture for commercial jobs, which can face major construction delays unrelated to DPP, including challenges with financing or delays on approvals by state agencies.
The quality of the permit applications themselves can play a major role in timing, too. Building plans that are not up to code can get multiple rounds of comments that delay the permitting process.
“It should not reflect all on the city or DPP,” Formby said. “To the extent that we are responsible by being inefficient, we're accountable for that. And that's what this administration has committed to fix with systemic change.”
Even when a job is permitted by DPP, it may not immediately be built—and taxed, he noted.
“There’s always a lag,” he said. “We’re actually getting the benefit of things that were permitted under prior administrations because now they’re in construction.”
Honolulu City Councilman Tyler Dos-Santos Tam said the numbers underscore the need to get DPP up to speed once and for all. If the city could collect even 10% or 20% of the money left on the table every year, the councilman said it could provide better services to residents.
“We always get told every day, 'You know, this would be nice, but we can't afford it right now,'” he said. “If the department gets through the permit backlog and issues a bunch of new permits, they collect the fees, and they can put that into further investments into the department.”
The administration has blamed the permitting delays in part on understaffing fueled by low wages for permit reviewers. DPP's vacancy rate has hovered around 25%.
Honolulu Mayor Rick Blangiardi said the city is looking into raising wages but doesn’t currently have the means to do it.
And at a budget hearing in March, Takeuchi Apuna said her department is “under-resourced, for all the things that we need to do.”
But the numbers suggest that directing more money to DPP would yield a positive return on investment, particularly for staff salaries, according to Moore. Starting pay for a plans examiner is less than $40,000 — a level that qualifies those employees for low-income housing.
This year, the Blangiardi administration is proposing spending only 1% of the city budget, which mostly comes from the general fund, on the permitting department. The city could do better, Moore said.
Fixing DPP Could Pay For Itself, Economist Says
DPP says it is investing in training for its permitting workers, whose positions require only a high school degree. (Kevin Fujii/Civil Beat/2024)
“If you doubled people's wages and hired enough people to clear the backlog, it would probably still pay for itself with just the permit fees alone,” Moore said. “And the permit fees, I think, are really just the tip of the iceberg.”
DPP’s delays also likely hurt state revenues, Moore said. When construction jobs are stalled because of permit delays, that amounts to a lag in the collection of state income taxes and general excise taxes.
And then there are losses from people who choose to bypass Honolulu’s slow permitting process altogether and build illegally. For unpermitted jobs, the city misses out on an unknown amount of building permit fees and property tax revenue, according to Kawano.
Government revenue losses due to slow permitting have been a topic of concern on the mainland for years. A representative of the Texas-based Real Estate Council estimated in 2022 that the city of Dallas alone loses $9 million in property tax revenue every three months due to permitting delays, although the city disputed that total.
In 2005, an American Institute of Architects-funded report by PricewaterhouseCoopers found that speeding up permitting can permanently boost local government revenues, including a 16.5% bump over the first five years.
“While achieving a reduction in permitting times is not costless (i.e., it may require one-time costs for implementing systems changes and potentially ongoing costs for the hiring of additional staff), these changes have the potential to be self financing,” the report states.
“The additional tax collections from more efficient permit processes could offset the investment made to achieve the improvements.”
If permitting were speedier, increased revenue could be spent on the city’s other priorities, too, Moore said, from public safety to parks.
“That’s a free lunch,” he said. “That’s something you should do tomorrow.”
Honolulu Councilman Tyler Dos Santos-Tam believes making DPP a self-funded department could incentivize it to work faster. (David Croxford/Civil Beat/2023)
Councilman Dos Santos-Tam acknowledged that revenue is not DPP’s objective, but he wonders if it should be at least one of the department’s goals. Specifically, he’d like to see the department be financially self-sustaining as a way to motivate the department to improve its services.
As of now, whatever money DPP generates goes into the county’s general fund for potential use by all city departments. And every year, DPP has to ask the mayor and the City Council for money to fund its operations.
The councilman is proposing a special fund that would require all DPP revenues to be spent exclusively on DPP itself. The change would force the city to invest in the department and would create an incentive for the department to boost its performance, he said.
“I want to create a culture where they're eager to go out and process fees faster, and they get to reap the rewards as a department,” he said.
Bill 20 is pending at the council but has faced some pushback. The city budget department and some council members say special funds are overly restrictive, and some community members are concerned that the proposed revenue structure could encourage overzealous enforcement of building rules.
Formby is philosophically opposed to the concept.
"When it's all in the general fund, it's based upon on the priorities of the people, which is what we're actually supposed to be a manifestation of — public safety, affordable housing, homelessness," he said.
"If you start down that path of saying to every department, you basically spend what you generate, the system doesn't work very well."
Takeuchi Apuna has also noted that if there were a downturn in the construction industry, a self-funded DPP could find itself unable to make payroll. The councilman said in that circumstance, the council would step in to provide additional funding.
Whatever the mechanism, DPP needs to improve soon, Dos Santos-Tam said.
“These kinds of changes need to actually happen faster. Less talk, more action,” he said. “That's not to say they're not doing anything, but, you know, we can always do more.”
Takeuchi Apuna said she is focused on turning her department around, which will in turn increase collections from fees and taxes.
“We just have to fix what we're doing,” she said. “I think the ultimate goal is to be timely in our permits, and that will more timely allow the city to receive revenues from those projects.”
Improvements Are Underway, City Says
The challenge is reversing a trend of delays that have mounted over the course of at least 20 years, city data show.
Wait times for both commercial and residential jobs have shot up over time, particularly in the last three years, according to city data. (April Estrellon/Civil Beat/2024)
Two decades ago, residential permits took an average of less than two months to issue. Last year, they took an average of nine months. Commercial jobs 20 years ago could get the city’s blessing in less than three months, on average. By 2023, the wait time skyrocketed to more than 14 months.
The wait times have increased particularly sharply in the last three years for both commercial and residential jobs and have hit unprecedented levels, according to city data.
The Blangiardi administration is investing millions of dollars in new technology, formulating new standard operating procedures with the help of outside consultants and instituting more competitive salaries for engineers who work on commercial projects.
During his state of the city address in March, Blangiardi pledged that within a year, DPP’s average residential review time will take no longer than a month and commercial reviews will not exceed six months.
Wait times for both commercial and residential jobs have shot up over time, particularly in the last three years, according to city data. (April Estrellon/Civil Beat/2024)
The city has made progress reducing the time for preliminary reviews known as “prescreening” from several months to several days. But the total permit review time remains stubbornly slow.
Mayor Rick Blangiardi, who is running for reelection, has promised major permitting time improvements in the next year. (David Croxford/Civil Beat/2024)
In a report to the Honolulu City Council in May, the department acknowledged that wait times for commercial permits had not improved much since its last update, and in the case of residential plans are slower than they were eight months ago.
The administration says it is laying a foundation for structural changes. The adjustments require staff attention and resources in the short term but should have a lasting impact in the long run, officials say.
“Building permits are for health and safety, so of course we would like to have a shorter timeframe in which to review those,” Takeuchi Apuna said. “But that is important for us, to ensure we review it properly.”
Local News
Honolulu Building Permits Are Expected To Be Issued Faster With Tech Upgrades, Director Says
By Christina Jedra | Posted: March 27, 2024
People seeking building permits in Honolulu, currently faced with months-long and sometimes years-long delays, should get some relief in the coming months thanks to technology upgrades, the department announced on Wednesday.
Dawn Takeuchi Apuna, the director of the Department of Planning and Permitting, said the city is making long-overdue investments to replace the systems it’s used for decades.
The department currently uses software called POSSE that has been around since 1998, she said. And when Mayor Rick Blangiardi’s administration took office, DPP was still using pneumatic tubes — an archaic system that used compressed air to suck cylindrical containers through pipes to deliver documents.
“We aren’t going to suck anymore,” Takeuchi Apuna joked at a press conference.
Dawn Takeuchi Apuna, the director of the Department of Planning and Permitting, said permits should be issued faster with new software. (David Croxford/Civil Beat/2024)
DPP is pursuing tech improvements in three key areas.
First, POSSE is being replaced by a building permit software called Clariti. The department described it as a user-friendly solution designed to “streamline and expedite permit processing and inspections and enforcement.”
The effort began in February and will continue over the course of 18 months, with a public roll-out at the halfway point, according to Takeuchi Apuna.
Users will be able to apply and pay for their permits via an online portal. Currently, many applicants have to bring checks tao the department in person.
In the next six months, Honolulu will also implement “major upgrades” to its ProjectDox system. This will move DPP functions into the digital cloud for “faster processing and higher performance,” she said, and add new features to help applicants answer the question: “Where’s my permit?”
Applicants and interested parties, like contractors, will be able to see how long a permit has been waiting and clearly identify “who is holding it up, and who’s not,” Takeuchi Apuna said. Users will be able to download comments into an Excel spreadsheet that can be shared with their project teams.
“Step-by-step task instructions will be provided to applicants that clearly indicate what needs to be addressed,” Takeuchi Apuna said.
DPP will also build on the success of its bot, which has reduced the backlog in its prescreen queue — the first step in permitting that checks for superficial formatting issues.
In 2022, prescreening was taking months. As of this year, it takes an average of five days, according to departmental data.
A new partnership with CivCheck, an artificial intelligence-based software company, is allowing DPP to run actual building plans through a robotic system to check for code compliance. The system will be used only for residential jobs, including single and two-family homes, additions and alterations.
Getting straightforward plans processed digitally will free up staff to take on more complex jobs, according to the director. For compliance gray areas, though, a staff member’s interpretation may still be needed, she said.
The system will help applicants fully understand what is expected, which will improve the quality of their plans and reduce the number of review cycles by DPP, Takeuchi Apuna said.
“The result is a more rapid, accurate and predictive permitting experience,” Takeuchi Apuna said. “This is a game changer for permit review.”
CivCheck is currently being used as part of a five-month pilot project the county is participating in for free. The Clariti system will cost $5.3 million over the next three years, and ProjectDox will cost $206,000 — both covered by American Rescue Plan funds, Takeuchi Apuna said.
The director said the combination of tools will help DPP fulfill a promise made by Mayor Blangiardi at his State of the City address: that in one year, it will take DPP an average of two to four weeks to review residential permits and six months or less for commercial jobs.
As of January, it takes residential projects an average of more than six months to go from application to permit issuance. Commercial projects wait an average of more than a year.
Aside from technology, the department is working to hire third-party code reviewers to decrease the backlog, train staff in standard operating procedures, and issue pay raises to engineers, who are needed to review commercial plans but who have a high vacancy rate.
At the press conference, Blangiardi acknowledged the challenge the city faces to speed up permitting but expressed unequivocal confidence in Takeuchi Apuna.
“This is akin to trying to change a tire (while) going 60 miles per hour down the freeway,” the mayor said.
“We all wish it was a lot better today than it is. So we’re not where we want to be, but we will get there.”
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