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Last week, I wrote a somewhat tongue-in cheek article meant to stir discussion about the local status quo by bemoaning the plight of Hawaii’s middle class “normies.”

The normie, I argued, is a person who lives and dies in the background of Hawaii with no representation, has it bad because they live stuck on plain vanilla ice cream and never get a cherry on top of life in the form of something to be proud of or happy about.

Many people reached out to me immediately following that column’s publication, asserting they too were normies and didn’t want to die tired, lonely, barely making ends meet. I was shocked just how many normies came out to tell me their plight. 

But one person who also reached out to me was Peter Savio, a local-born developer who wants to of affordable housing in the islands, which he believes is essential to changing everything from the social determinants of health to the economic viability of our future.

Savio  that he had given earlier in the year where he explained how he wanted to create a new affordable housing market in the islands which would be carved out just for locals, with special rules placing a ceiling on price tied to local wages and curtailing sales to only local residents. 

I’ve heard this concept brought up over the last decade in different iterations, mostly from Republican friends who were in Hawaii real estate, occasionally from Native Hawaiian friends, and now this session at the Legislature with the introduction of  by Sen. Brenton Awa and  by Rep. Diamond Garcia. The two Republicans, along with Savio, held joint press conferences earlier this year to pitch the bills as a way to assist locals seeking housing relief. 

The original draft of both bills as introduced proposed to amend the law so that “A foreign principal shall not directly or indirectly own, have a controlling interest in, or acquire by purchase, grant, devise, or descent real property or any interest, except a de minimus indirect interest, in real property in the State.” 

Both bills are no longer moving, and  is rewritten as a research study for the Legislative Reference Bureau.

Since Hawaii is a lucrative destination with warm weather, beautiful visuals and a generally laid-back way of life it’s no surprise that for decades wealthy individuals from other countries have gobbled up local real estate. 

The same applies for U.S. citizens from the mainland, either retirees or new wealth, who have either ample cash or access to financing that put them at an advantage in buying up homes in the islands. This distorts the local market, and stacks the deck against less affluent local residents, making it harder to buy a home. 

Savio believes it is possible to create a new, or expanded, affordable housing market which is fenced off from that larger distortion and is reserved just for locals. I reached out to Rep. Garcia not long after Savio contacted me, and told him I thought the proposal was interesting and I wanted to hear more about it, though I had some questions. 

From my personal perspective, as some of you may recall, I discussed this concept a couple of years ago in a controversial article entitled “Why Hawaii Will Never Solve The Housing Crisis.”  That article ultimately got me denounced by some of my former libertarian and free market academics in their white paper footnotes, but I stand by my assessment of the situation. 

If you think of the housing bubble and high prices as being akin to having type 2 diabetes — that is, excessive housing prices are like having too much blood sugar — just as consuming more sugar only makes the problem worse, pouring more cash into Hawaii only distorts the housing market even further. Just as one should fast — stop putting more sugar in — to allow the body’s organs to find glucose balance, you have to control money distorting Hawaii prices.

I personally blame the Federal Reserve’s loose money policy as being behind the malinvestment and distortion that got us here, but there’s not much we can do about that. (For a great explainer,  “Too Big to Fail” which dramatized the mortgage industry crisis.)  Nevertheless, is it possible to create an independent market just for Hawaii locals that foreign buyers and mainlanders can’t touch as a kind of end-run around that bigger problem?

The first thing that came to my mind is the barring state protectionism, so I asked Savio if he’d be willing to talk about his idea further. (You can listen to  here on YouTube.) 

Savio insists the Commerce Clause does not apply, and explained that his idea is nothing Hawaii or other states aren’t already doing. He just wants to expand it so that locals can have a fair shot at getting homes, ideally, priced around $400,000. The key to the success of his concept revolves around reserving who can participate in the program’s homes and using median wages to determine pricing, requiring one actively lives in the house, and so on. 

Savio believes that the high cost of housing and rent in Hawaii results in all sorts of social woes and individual health and family problems, and he is passionate about getting some kind of reform, though his ideas have not been well-understood by many lawmakers. I completely sympathize.

As it is, in order for most policy proposals to succeed, they have to be easy to explain (quickly!) and easy to understand. Housing is a complicated and circuitous web, and it’s not easy to explain or understand except for a few, which often deters anyone from touching it, lest they disrupt the status quo. Still, many are excited by the possibility of creating an expanded affordable market.

“Let’s not forget that over 2,000 people testified in support of our legislation,” Garcia told me. He also explained that 23 other states have implanted similar measures, and told me “Despite our efforts, it’s been challenging to advance this legislation, facing opposition from the attorney general citing constitutional concerns.”

I reached out to my long-time policy friends at the , as they specialize in fighting the federal government through nullification policy. They wanted to help, but didn’t entirely understand the idea. “Me too,” I told them.

So then I asked Zuri Aki, a Native Hawaiian and a long-time policy advocate about how doable this is. I was intrigued when Aki explained to me the Commerce Clause isn’t as water-tight as is commonly assumed, particularly where it can be demonstrated its application significantly harms a state. The rather obscure case of where Congress used the Wilson Act, followed by the Webb-Kenyon Act, for personal use implies state legislatures can be permitted to restrict foreign and out-of-state purchases.

“If you’re a foreign buyer, your market rate should be the highest, followed by out-of-state buyers,” Aki suggested to me. “In-state residency qualifiers should be no less than 10 years. There should also be safeguards in place to discourage flipping. The underlying policy here should be that Hawaii needs homes for individuals and families to live in, not to be used as investment properties for income generation.”

Other Native Hawaiians, like Robert Lopaka Kapanui, a local storyteller and author, tells me that the real focus should be on spiritual and physical healing of the land, in addition to prioritizing the housing of Native Hawaiians “in and on their own land.”

One thing is clear, though: Hawaii has a long way to go on reforming housing policy and options for its people, but many residents can’t wait that long for that kind of miracle.