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Don’t strip homeowners
of the power to buy their lots

THE ISSUE Three state House committees have approved a bill to repeal the state law empowering homeowners to buy their lots from lessors.

VICTORIOUS in winning repeal of the city's mandatory conversion of condominium land to homeowners, leaseholders are seeking reversal of the state law aimed at forever ending Hawaii's concentration of land ownership. The Legislature should allow the second Great Mahele to proceed, helping more families acquire the land beneath their homes.

More than 14,600 families have purchased fee interest in their homes in the two decades since the U.S. and Hawaii supreme courts upheld the 1967 Land Reform Act. Repealing the law would leave about 1,200 homeowners landless and would open the gates to further leasehold developments.

Before the law took effect, more than 80 percent of the private land in Hawaii was owned by fewer than 40 landowners. On Oahu, 22 landowners owned nearly three-quarters of the land. Three-fourths of Oahu's lease lots were owned by Bishop Estate, since renamed Kamehameha Schools.

The initial land acquisitions that became known as the Great Mahele followed King Kamehameha's 1848 declaration that, contrary to custom, people could own land. While the equation gave Hawaiian commoners short shrift, much of the land was acquired by alien entrepreneurs such as James Campbell (sugar), John Parker (cattle), Charles Brewer (sugar) and Charles Reed Bishop, through marriage to Princess Bernice Pauahi, the state's largest landholder and last descendent of the Kamehameha line.

In a legal challenge by Bishop Estate, the U.S. Supreme Court upheld the Land Reform Act in 1984, ruling that the estate could be required to sell the land to homeowners at just compensation. The state Supreme Court gave its approval a year later, planting the seeds for a second Great Mahele.

The city ordinance requiring conversion of condo land was enacted in 1991 but differed significantly from the state model. While both statutes contained threshold requirements of homeowners to apply for purchasing their land, the state law pertained to all homeowners in a tract while the condo ordinance cited only owner-occupants. Landowners complained that absentee condo owners misrepresented where they actually lived; no such abuse can result from the state law.

Since the state and city laws went into effect, Kamehameha Schools has adopted a policy of voluntarily selling fee interest to owners of both leasehold condos and detached homes, but that could change. If the state law is repealed, the estate would be allowed to resume its leasehold system in future housing developments. Kamehameha Schools supports repeal of the law.

In the 1985 state high court decision upholding the law, then-Chief Justice Herman Lum noted that the 1967 Legislature "determined that skewed patterns of land ownership have interfered with the normal functioning of the state's residential land market." Rolling back the law could allow the market to become skewed again.