Nestled next to farmland and older residences, three affordable rental projects are emerging from the red dirt in Kaua’i’s western town of ‘Ele’ele.

The rentals, part of the county-led 550-unit Lima Ola affordable subdivision, is an example of how Kaua‘i County’s Housing Agency has become a major developer and facilitator of new homes on the island.

The Housing Agency and its private developer partners are expected to begin construction on 288 affordable homes this year. Combined with the 221 units that broke ground in 2023, the agency and its partners are set to add 509 affordable homes to the rural island’s housing stock.

That’s a major increase from past years, says Adam Roversi, the agency’s director. From 2012 through 2022, for example, the county built about 410 affordable homes.

Adam Roversi has served as the Kaua’i Housing Agency’s director since 2019. | Photo: Noelle Fujii-Oride

“It’s a record, let’s put it that way,” Roversi says of the new homes. Another 860 affordable homes are in the works across the island and are expected to break ground in 2025 or later.

More homes are direly needed on the Garden Isle, where so few new ones are built that the island’s housing stock has remained stagnant for the last five years, causing prices to skyrocket, according to UH’s Economic Research Organization. A 2019 state study said the island needed about 800 new homes a year from 2020 through 2025; that number includes affordable, market-rate and luxury homes.

“Both politically and economically, it’s a good time for the county to be doing what it’s doing,” says Roversi, who leads a staff of 23, eight of whom focus on development. He points to expanded federal and county funding for affordable housing projects. “There’s a lot of political momentum to try to do different, out-of-the-box things.”

More Homes Needed

At the turn of the millennia, a shift began in the types of private housing projects being built on Kaua‘i, with more high-end luxury developments and fewer projects affordable to locals.

Ka‘āina Hull, the county’s planning director, attributes the shift to regulatory barriers and infrastructure requirements. For example, large developments have often been required to build new wastewater treatment plants, waterlines and roads.

“The only people who could pay for them were the high-end luxury folks,” he says. “And so some of these regulatory barriers and infrastructure costs, and this is just my perspective, created the barrier for our local housing.”

He adds that his department in the last five years has “taken a blowtorch” to Kaua‘i’s zoning ordinance and eased lot coverage, setback, density and other requirements. The other step to getting more homes is addressing infrastructure, he says.

D.R. Horton Hawaii, part of the largest homebuilding company in the U.S., built 151 homes and duplexes in its Ho‘oluana at Kohea Loa subdivision in Hanamā‘ulu in 2019. Of those units, 32 were targeted at households earning up to 140% of the area median income, or $143,100 a year for a family of four.

The subdivision is part of the 440-unit Kohea Loa project on 53.7 acres of private land. But the last three phases are on hold until water access issues are resolved, the company wrote in an email. Affordable units in those phases are anticipated to be sold at 80% to 100% of the area median income, or $96,500 to $102,200 for a family of four.

A community organization sued the county water department in 2018 over a proposed 18-inch waterline that would serve Puhi, Līhu‘e, Hanamā‘ulu and Kapa‘a – including the new Ho‘oluana at Kohea Loa subdivision. The state Supreme Court ruled in 2022 that the department didn’t do a thorough environmental assessment. The Kaua‘i Department of Water wrote in an April email that it is finalizing negotiations on the scope of work and fees to prepare an environmental document for the potential impacts and areas affected.

The cost and availability of infrastructure are key reasons why housing projects don’t pencil out for developers, says Milo Spindt, who advises nonprofit developers Permanently Affordable Living Kaua‘i and Kaua‘i Habitat for Humanity. “So if someone with very big … deep pockets who thinks very long-term with their investments can’t do it, who can?” asks Spindt, who is also a Realtor and serves on the Hawaii Habitat for Humanity Association board.

“He wanted desperately for the county to acquire land that he could entitle and set up for future development,” says Gary Mackler, who worked as a housing development coordinator for 24 years. That led to the county’s 2010 purchase of 75 acres of agricultural land from McBryde Sugar Co. for $2.5 million.

That land is home to the four-phase Lima Ola project in housing.

“We’re not producing market housing to make profits; we’re producing housing to serve residents.”

— Gary Mackler, former Housing Development Coordinator, Kaua’i County Housing Agency

Small Housing Loss

According to UHERO’s Hawai‘i Housing Factbook, Kaua‘i saw a “very small” net housing loss of about 400 units over the past five years. Justin Tyndall, assistant professor of economics at UH Mānoa and a member of UHERO, says some of that loss may be due to more housing units being used as vacation rentals. About 17.5% of Kaua‘i’s housing units were listed as active vacation rentals in 2023, up from 16% in 2022.

Kaua‘i issued about 160 to 180 residential building permits each year from 2020 through 2023, according to UHERO data. From 2016 through 2019, the county issued 200 to 400 permits.

Little new housing means there aren’t enough homes to go around, so prices are high. In March, the median sales price on Kaua‘i was $1.6 million for a single-family home and $770,000 for a condo, according to the Kaua‘i Board of Realtors.

“I feel like younger people 10 years ago could reasonably afford a home with a normal job on Kaua‘i and now there’s no way,” says state Rep. Luke Evslin, who represents southeastern Kaua‘i and is chair of the state House Committee on Housing. He adds that it’s even hard to recruit doctors because they can’t afford housing either.

But Tyndall says county leaders appear to be aware of the housing problem and have made reforms, including reducing regulations and getting the county to facilitate and produce affordable housing developments.

Producer of Affordable Housing

Around 2005, then-Mayor Bryan Baptiste began meeting with major landowners to talk about acquiring private land. He saw that many of the good development sites were being taken by the private market for market-rate housing projects. But residents needed housing that was more affordable.

“He wanted desperately for the county to acquire land that he could entitle and set up for future development,” says Gary Mackler, who worked as a housing development coordinator for 24 years.

That led to the county’s 2010 purchase of 75 acres of agricultural land from McBryde Sugar Co. for $2.5 million. That land is home to the four-phase Lima Ola project in ‘Ele‘ele, the county’s largest affordable housing undertaking.

Mass grading and utility and infrastructure installation began in November 2020 for the first phase, which will comprise 38 single-family and 117 multifamily homes.

“The one thing that got us there is persistence, even to this day, and now we’re seeing the dividends of that effort,” Mackler says. He also serves on the boards of the Hawai‘i Housing Finance and Development Corp., the Kaua‘i Housing and Development Corp. and the Hawai‘i HomeOwnership Center’s Community Land Trust.

Rep. Nadine Nakamura, who represents the island’s north and east sides, says Lima Ola is a model for the state. “This is what it takes to do development in Hawai‘i,” she says.

“We’re really lucky, I think on Kaua‘i, that we have an aggressive housing (agency). We have prioritized where we want affordable housing to be and we’ve identified the infrastructure needed to carry it out. So, you know, the next step is to figure out how we’re going to pay for that infrastructure and partner with the (state) and the feds to try to get whatever money we can. And that’s what’s happening.”

“We’re really lucky, I think on Kaua’i, that we have an aggressive housing (agency).”

— Nadine Nakamura, State Representative, Kaua’i

Roversi says the county’s goal is that affordable housing on county-owned land, like Lima Ola, be affordable in perpetuity through ground leases for rental projects and limited appreciation leaseholds for ownership projects.

“If we’re successful in continuing with that model, it kind of establishes a separate bifurcated housing market, that we have a pool of homes insulated from market forces, because the county owns the land,” he says.

The Housing Agency plans to replicate Lima Ola in Waimea and Kīlauea, where the county recently acquired land. And Roversi hopes to acquire property in other areas, including the Līhu‘e town core since the county’s general plan calls for most future development to happen in that area.

Housing Agency’s Role

The Kaua‘i County Housing Agency was established in 1976. Its early projects included collaborations with the state and a nonprofit housing developer. Together, they developed 14 single-family homes in Po‘ipū’s Weliweli subdivision, and 50 single-family homes each in the Līhu‘e Town Estates and Kapa‘a Meadows subdivisions.

Ken Rainforth was hired at the Housing Agency as a project coordinator in 1979 and worked in a variety of positions, including housing director, before retiring in 2009. He says the agency initially focused on administering Section 8 and other federal grants to nonprofits that served low-income residents. He began looking for funding so the agency could do more of its own development projects. “

To me, it’s just common sense to go after money and build your own projects,” he says.

Ken Rainforth helped create 5,000 housing units while working for the Kaua’i County Housing Agency from 1979 to 2009. | Photo: Noelle Fujii-Oride

Over the decades, the agency has also had a hand in multifamily and self-help housing, new and improved lots, and senior housing projects.

Developments supported by the Housing Agency took off after Hurricane Iniki, which devastated Kaua‘i in 1992. Chad Taniguchi, who served as the Housing Agency director from 1990 to 1995, says about $41 million in post-storm federal and state relief funds led to the creation of 581 housing units over a decade.

Today, many of its projects target low-income earners who make 60% of the area median income or less, or no more than $72,400 for a family of four.

In many cases, such as with Lima Ola, the Housing Agency is the lead developer; in that role, it identifies county-owned land or purchases land for affordable housing projects.

Along with that, it obtains any needed zoning approvals, solicits community feedback and conducts environmental reviews before issuing requests for proposals to select a private developer who will lease the land, typically at $1 per year.

The county will also put in needed infrastructure, expedite permits, and waive many county building fees. Roversi says those fee waivers can equal nearly $20,000 in savings per unit if the project is located near existing sewer lines.

The county also provides partial funding for projects, which helps them get additional points on their state financing applications. The number of points a project receives largely determines where it’ll rank among other applications. The highest-ranking projects are further evaluated to determine the amount of low-income housing tax credits needed to make the project feasible.

On the other end of the spectrum, the county is a secondary participant in projects initiated by private developers on private land. The county provides some funding, plus fee waivers and expedited permitting.

Roversi says there have been more of these types of projects in the last three years. Before that, only Kaua‘i Habitat for Humanity was originating affordable housing projects on its own land, he says. Under Kaua‘i Habitat’s model, partner homebuyers, plus volunteers, construct the homes, which helps to keep costs down.

Part of a Team

Mackler joined the Housing Agency in 1993 to help with Hurricane Iniki relief. His position was funded by the Federal Emergency Management Agency and was only supposed to last five years. He ended up staying on as the housing development coordinator until he retired in 2017.

He says the county government during his early years treated affordable housing as any other project needing approvals. That changed around 2005 when the government created a housing task force.

Heads of the county housing, planning and water agencies, and other officials, met regularly with each other and with private developers to discuss affordable housing projects, get updates and address issues. Those meetings continue today. Later, the county created a policy to expedite certified affordable projects for permitting. That expedited process can save six to 12 months, says Mackler, who describes his role in the process as that of a navigator.

“I think what happened slowly was there became more buy-in among the county representatives and the reviewers to understand that we’re just here to build units for your kūpuna, for your auntie, your uncle, your nephew, your niece, your son, your daughter,” he says. “We’re not producing market housing to make profits; we’re producing housing to serve residents. And that really, I think, was the start of having a more supportive county apparatus.”

Makani Maeva, president of Honolulu-based Āhē Group, says those meetings with government officials make her feel like she’s part of a team. Āhē Group has built four affordable rentals on Kaua‘i and has two more under construction.

She says project risks are eased when the county does the pre-development work. Low-income rental projects like hers, she says, can only charge a certain amount of rent, yet the cost to build can increase due to unexpected delays, environmental issues or community opposition.

And, she adds, it’s helpful that the county lines up its timeline for selecting contractors for county-initiated projects with the February application deadline for most state financing programs.

“They give us the tools that we need to go and compete aggressively for those funds that are available statewide,” says Craig Watase, president of Mark Development. “But you know, they want us to come there and build housing.” His company has developed five housing projects on Kaua‘i since the 1970s.

Watase and Maeva both say they appreciate the county’s support of developer-initiated projects on private land. For example, Mark Development and another Honolulu developer, ‘Ikenākea Development, plan to build a 154- unit apartment complex in Līhu‘e, and Āhē Group is building a 75-unit apartment complex in ‘Ele‘ele.

Roversi says he’s been getting more calls from developers interested in building on the island. “I have hopes that we’ve built a reputation of being a cooperative and helpful environment for affordable housing developers and the word is getting out,” he says.

“They give us the tools that we need to go and compete aggressively for those funds that are available statewide.”

— Craig Watase, President, Mark Development

Past and Future

The Kaua‘i Housing Agency’s development of affordable housing is reminiscent of the larger role that the City and County of Honolulu and then-Hawai‘i Finance and Development Corp. played on O‘ahu in the 1980s and ’90s.

Under then-Mayor Frank Fasi, Honolulu spearheaded the development of the 600-acre ‘Ewa Villages, which included restoring plantation communities and building new homes and community facilities. And HFDC was the overall developer of the 890-acre Villages of Kapolei.

In March, its successor, the Hawai‘i Housing Finance and Development Corp., selected developers to plan and develop up to 900 affordable rentals and for-sale homes in one of the last undeveloped portions of that part of Kapolei.

Additionally, the Hawai‘i Public Housing Authority is planning to create 10,000 new affordable units by redeveloping state-owned properties, and the state Department of Hawaiian Home Lands has been developing homesteads for Native Hawaiian beneficiaries for decades.

“We would like to spread our activity around the entire island so that every community is benefiting from what we’re doing.”

— Adam Roversi, Director, Kaua’i County Housing Agency

However, as local governments step deeper into this space, there could be concerns about government competing with private developers, says Spindt, the affordable housing advisor. There’s also a question of whether a local government, like the one on Kaua‘i, should be focusing on middle-income housing, a category of housing that’s not eligible for many state and federal subsidies.

He says he doesn’t have answers to those questions, but the big challenge is that Kaua‘i County’s government can’t make up the island’s housing shortfall on its own.

“The county can play a part in it, and I think they are playing an important part, and I do support the idea that all other counties in Hawai‘i and throughout the nation should have some role in preparing land for development,” he says.

Rainforth says he had a hand in about 5,000 housing units during his 30 years with the Kaua‘i Housing Agency. He still remembers how he felt when he first saw families do their final inspections of their new homes.

Photo: Noelle Fujii-Oride

“The joy of that family is just, I can’t describe it,” he says. “So later on when we were doing other projects, I made sure that my development staff had that same opportunity to do the walkthroughs with the new homebuyer. … It’s just really stimulating to be with somebody when they’re buying their first home. It’s just incredible.”

Maeva is wrapping up construction on part of her 75-unit Kai Olino project. And her two rental projects at Lima Ola are expected to accept tenants in the fall.

She says watching residents move in and become part of the surrounding community are her favorite parts of being a developer.

“It matters, right? It makes a difference,” she says. “And so it’s just a feeling when people are moving in. I’m so happy when kids have bedrooms, when people aren’t worried about their rent going up, or the house being sold. It’s a long-term solution. And it’s almost like a little bit of a peace. You know, you can feel it and you can see it, and people appreciate it.”

They’re young, ultra-casual, and opinionated. They like flexible work arrangements and would rather not do email. Many, in fact, would rather not come to your drab, boring workspace at all. Welcome to Generation Z. They’re the youngest members on the team, and they’re making earlier intergenerational differences seem downright quaint. Consider these local examples:

• A Gen Zer asks her boss for a raise just two weeks after getting hired.
• A young team member keeps missing work, with no warning or explanation.
• A boss gives his new hire feedback, and is surprised to get some in return.
• A 22-year-old lands a dream job, but already feels disillusioned: “This is not what I imagined.”

In interviews with Gen Zers and their employers in Hawai‘i, people are reporting misunderstandings, misaligned expectations and outright culture clashes. And the problems aren’t going away, no matter how many demands and threats employers make.

Consider this too: In a national survey of managers conducted by resumebuilder.com in 2023, 1 in 8 said they had fired a Gen Z employee a week after hiring them.

But refilling positions isn’t easy, especially in Hawai‘i. The state’s population has been falling for several years, with the “brain drain” of young, educated people driving out-migration as they move for college or jobs in the continental U.S. They often don’t come back.

And the percentage of older residents here is growing. About 1 in 5 was 65 or older in 2020, a proportion that’s projected to rise. With fewer young people entering the workplace than those aging out, the stakes are high for companies to cultivate the next generation.

Despite all the complaints, Gen Z can be the best thing to happen to a business. Young employees can be creative, entrepreneurial, technically adept, not afraid to question why a business is doing things so inefficiently, and eager to work hard when they feel valued and challenged.

So what makes this age group so different from previous ones? What motivates them and helps them do their best work? And how can employers modify the old rules and norms to appeal to this new generation, tap into their strengths and entice them to stay on the job?

Here’s what a selection of Hawai‘i’s Gen Zers – and the people who work with them – say about understanding Gen Z, bridging generational divides and creating a pipeline of talented young leaders who can keep enterprises thriving long after Boomers have made their exits.

A New Breed

In Hawai‘i, Gen Z is made up of about 260,000 people born between 1997 and 2012. Now around 12 to 27 years old, the cohort has been steadily joining workplaces, often baffling, frustrating or even infuriating their older colleagues.

“Every generation has differences, and there’s always tension. But this one feels like it’s more of a gap,” says Katie Chang, executive director of the Center for Tomorrow’s Leaders and an upbeat Millennial.

The Center for Tomorrow’s Leaders has emerged as an informal think tank on the issue of generational differences in Hawai‘i, in part because it’s immersed in both the world of young people and the organizations that support its mission.

More than 800 high schoolers across the Islands attend the nonprofit’s weekly in-person classes, where they learn skills such as conflict resolution, opinion writing, critical thinking and advocacy, culminating in major community projects. The goal is to help young people see themselves as leaders and start practicing the habits of leadership.

In December 2023, about a dozen Gen Zers from CTL’s vast alumni network were brought to Honolulu for what Chang calls an “explosive conversation,” where stereotypes were debated, confirmed and rebutted. The session is helping shape CTL’s presentations to its funding partners, many of whom are concerned about finding and keeping young workers.

“We still have to insist on character formation and accountability for our young people, such as insisting on the discipline of showing up consistently, and showing respect. On the flip side, this is a radically different generation, and they really do want to be seen, heard and loved. Both sides are going to have to move and meet in the middle.”

— Katie Chang, Millennial and Executive Director, Center for Tomorrow’s Leaders

In the popular narrative, Gen Zers are often described as lazy, prone to anxiety, socially awkward, tech-addled and distracted, obsessed with work-life balance, and ready to bolt from jobs that don’t give them what they need.

Many of Hawai‘i’s Gen Zers say the stereotypes are partly true, but they fail to capture the whole story. For every negative trait, there’s a positive one, or a contradictory trait that complicates the picture. And many stereotypes point to the biases and unchallenged norms of older generations.

Sean Maskrey, a 2021 graduate of ‘Iolani School and rising senior in economics and political science at the University of British Columbia, says some generalizations are just wrong, such as the laziness jab.

“It strikes a chord with me to hear we’re not trying,” he says. “We weren’t born and told to be lazy. That wasn’t something that was ever shown in a positive light for us. I don’t think anyone prioritizes laziness or relaxing or wanting to have a work-free life.”

He chafes at the condescension he sometimes hears, and the lack of understanding about the pressures his generation has experienced. Gen Z, for example, gets blamed for being addicted to the technology that adults developed and handed to children. “I don’t think kids had a choice,” he says.

Others, such as Alexa, a Hawai‘i based Gen Zer who was recently promoted to operations manager in her organization’s technical division, says it’s the older generations that often create problems by being stuck in their ways. As an example, she points to the software used at her company: It was installed in the year she was born.

“It takes a younger person to ask, ‘Why are we doing this? This doesn’t make sense,’ ” says Alexa, who asked that her real name not be used. “The younger folks are trying to improve things, but they face resistance from people who want to keep it the same as it’s always been.”

“In my experiences, the most important thing is just having the openness to ask questions and not being put down by asking those questions. … An ideal workplace is to have clear expectations about the scope of the job and what’s expected.”

— Sean Maskrey, Gen Zer and a student at the University of British Columbia

So Smart, So Clueless

As digital natives tethered to their devices, Gen Zers have a lot of information at their fingertips, and they absorb viewpoints from many voices. They’re knowledgeable, articulate and very good at presenting themselves, explains Chang.

“It’s a real paradox, then, how they seem to be clueless in the sense of the knowledge gap, and the whole skills gap seems to be widening exponentially,” says Chang. When high school students begin working on their final projects with CTL, she says they can identify pressing problems to address, but their solutions are often “a complete non sequitur.”

“Even the basic critical thinking of how do you get from A to B, and therefore to C, used to come more naturally, and now we’re having to train for it,” Chang says. She says employers report the same. Chang says she thinks social media, where it’s never quiet and information is rarely linear, plays a part. Long stretches of deep reading and thinking have grown increasingly rare, and can seem impossible to achieve.

A bestselling new book by social psychologist Jonathan Haidt, “The Anxious Generation,” argues that Gen Zers have literally had their brains rewired by technology, and their progress toward independence stunted by overprotective parenting.

The situation developed quickly. In 2007, the iPhone appeared. In 2009, “like” and “share” buttons were added to social media. In 2010, the front-facing camera was introduced, allowing teens to embark on self-curated lives, offered up for approval from a fickle virtual world. The result, argues Haidt, has been a youth mental health crisis, along with sleep deprivation, the loss of real social ties and fragmented attention spans.

Maskrey could feel the impact of social media when he was working on college assignments. He deleted TikTok from his phone last year, which he says has helped. “The ability for critical thinking is definitely diminishing, and I felt it happening to me,” he says.

Others were also struggling. Maskrey says one of his professors became exasperated and wanted answers from the class: Why can’t anyone get their work in on time? Why can’t they extrapolate their own opinions from the readings?

Image: AI & Jeff Sanner

Alone in a Noisy World

For April Nakamura, a longtime teacher at McKinley High School, associate director of CTL and a Gen Xer, the generational shift became noticeable before the pandemic, and was mostly centered on socialization.

“Throughout my teaching career, it’s always been very easy to build relationships with students. But starting around 2018, I began to notice that it’s almost like a veil has come down. They just don’t really talk to you or engage with you,” says Nakamura.

Students are self-aware, if confused about their own behaviors, she says. They tell her, “We don’t know what’s wrong with us. I don’t know why we are this way.” She worries about their social lives, and says they rarely have anything to report from the weekend, except sleeping, homework, playing video games and hanging out at home.

The pandemic accelerated those feelings of isolation and alienation.

“Covid was a defining moment for my class,” says Kimi Vidinha, who graduated from Waimea High School on Kaua‘i in 2023 and recently finished her freshman year at Pacific University in Oregon. “A lot of us have trouble communicating and have not fully matured, which is really apparent in college.” She says most students don’t contribute to classroom discussions and many stick with the people they know on campus.

Since exiting the pandemic, when school and social life were fully mediated by devices, she says that many of her peers have become addicted to their phones and distracted by the glossy mirror world of social media.

“You see what people look like on Instagram, and what other people are doing, and it gets hard to differentiate between reality and what you see on social media. … It’s completely blurred.”

Vidinha can find herself “sucked into the loop” of Instagram but prefers staying busy with classes, clubs and track practice. And she’s something of a pandemic outlier: The long school shutdown turned her into a more extroverted person. “I was able to self-reflect and become a more confident version of myself,” she says. “My personality kind of did a flip-flop.”

Ezekiel Bernardo-Flores, a private banking associate in First Hawaiian Bank’s Wealth Management Group and an older Gen Zer, says his generation connects to the world through social media, which is a “gateway for you to feel that you’re less than.”

He says he’s bombarded with postings from people who seem to be wildly successful, even if their stories are unverifiable or even fabricated. It leads to making comparisons and feeling bad about your own achievements.

“I’m very hard on myself, and I’m not the only person that’s hard on themselves,” says Bernardo-Flores, who imagines an easier, less fraught past, before social media, when the only success stories you heard about were from people you knew in real life.

For Maskrey, quiet self-reflection is difficult for his generation. He thinks the nonstop, all-consuming nature of social media has interfered with developing a secure identity, away from the judgment or approval of the comments area.

“I think there is a loss of identity in general and the idea of self for young people,” he explains. “There’s no opportunity to really think about it and develop it because it’s kind of like your identity is what’s trending now.” He says that shaky foundation leads to perceptions of Gen Z being “super emotional and reactionary” in the workplace.

Already Burnt Out

The ceaseless distractions of social media contribute to premature burnout, says Trisha Mei Ramelb, a student leadership facilitator and marketing coordinator at Center for Tomorrow’s Leaders and a Gen Z alum of the organization.

“It’s hard to turn off. And I think that’s why we feel so restless and so tired all the time, because we aren’t able to turn off and separate; we’re always on the go,” she says. “Usually you would expect burnout in midcareer but now it’s happening in high schools.

“Young people describe losing momentum and feeling like it’s a perpetual Monday, with fatigue and brain fog, unable to see clearly. Guarding mental health has become a priority among Gen Z.”

Gen Zers want workplaces to prioritize mental health as well. A 2022 national survey of 19-to-25- year-olds found:

• 82% of Gen Z employees say mental health days are important.
• 31% find it difficult to cope with pressure and stress at work.
• 42% say burnout and lack of work-life balance would make them quit their jobs.

Justin Fragiao, technical director at UH Mānoa’s Kennedy Theatre, a current graduate student and a Millennial, says he appreciates Gen Zers’ openness about discussing mental health, having struggled himself, especially as a high schooler. But he also worries that, after they graduate from college, they won’t find the same level of inclusivity and honesty in the working world.

He gets exasperated when his staff of 10 reasonably well-paid student workers continually ask for mental-health days, or just fail to show up. Sometimes they don’t even email or text to let him know.

When they do show up for work, they bring all their emotions with them. “They just wear everything that’s going on with them, whether they’re elated about something or having a terrible, terrible day, and then everyone should know about it,” Fragiao says.

As a new boss, he found himself shouldering much of the workload of building giant sets for productions, and under tight deadlines. It wasn’t sustainable. Now, he’s working to impose more rules on students and expectations about their roles. He says he wants to build students’ skills so they can handle multiple tasks, and instill a sense of professionalism in them.

Lord Ryan Lizardo, the associate VP of education at the Chamber of Commerce Hawai‘i and a young Millennial, was a teacher at Campbell High School for six years. He also saw intense emotions from students that affected their ability to cope.

“If something was happening in their personal lives, they would immediately shut off,” he says. “Being sensitive to situations is a critical piece to navigating mental health with this upcoming generation. They want a workplace that supports their growth and values their mental health.”

“Yes!” to Work-Life Balance

In a poll that CTL conducted of Hawai‘i students and alums, 74% said they would choose work-life balance over a high salary.

It’s a natural byproduct of the stress and anxiety that they struggle with more than other generations. It can also be a reaction to the workaholism of their parents, or the lack of loyalty that workplaces have shown employees, including their parents. That lack of loyalty is usually reciprocated.

Gen Zers had more than a full year disrupted by pandemic shutdowns. The older ones learned firsthand that they could work from anywhere, often on their own time. And they’re certainly not nostalgic for the old workplace of fixed hours and open offices.

Many, in fact, recoil at the trade-off they’re expected to make: decades of work, nearly all their daylight hours, the bulk of their adult existence on Earth, in exchange for enough money to one day buy a little house. Is that really appealing?

Maskrey, for example, has spent much of his life on a familiar path for Hawai‘i’s high-achieving youth: 13 years at a homework-heavy private school, an Eagle Scout, multiple summer internships and now deep into a five-year program that leads to a bachelor’s degree and a master’s in business management.

Lately, he’s been rethinking the many hours he’s spent in a volunteer leadership role at his university in Canada, and questioning what these years of effort will actually bring. For all the talk about employers not being able to fill jobs, he says many of his peers struggle to land anything.

He says he’s gotten internships in Hawai‘i through personal connections; when he didn’t know anyone, his applications went nowhere. Many of his college friends can’t find jobs, even those graduating in popular fields such as environmental studies. One friend applied for dozens of service jobs to help pay living expenses, with no callbacks.

“The biggest experience for my generation is that we’re just not hearing back,” says Maskrey. “We’re applying to so many jobs and not hearing from anybody.” And they’re not being picky, he says. They’re just trying to keep moving forward with their lives.

In an ideal world, he says Gen Zers want jobs that align with their values and offer a sense of purpose, without sapping away all their time and individuality. “Gen Z prioritizes being real and just being human. People are people, not capital,” he says.

The worst work situation, Maskrey says, would be “feeling like you just have to show up and clock in, sit and put your head down forever, and then clock out at 5 and go home. That’s a nightmare situation for me.”

Alexa is living in that world now, having made the “difficult transition” from a part-time job while attending UH Mānoa to a full-time role with her organization. Her recent promotion to a managerial position has elevated her stress and sense of unease. She says she “feels the burnout.”

“I had certain expectations and higher hopes of what working was going to be like,” she says. “And then you come into the workplace and realize this is not what I imagined. You’re faced with the reality of working 9 to 5 for the rest of your life, and it’s very depressing.”

Gen Z is adept at stepping into “big shoes” and thriving in roles that demand responsibility. But they’ll probably need lots of coaching. | Image: AI & Jeff Sanner

“True Pragmatists”

For all their idealism and commitments to social justice and climate activism, money is still important to young people. And given what they’ve experienced in their lives, how could it not be?

As Courtney Kajikawa, a Gen Xer and senior VP and manager at First Hawaiian Bank, wrote in her 2023 thesis report for Pacific Coast Banking School, major political, economic and social events, known as “period effects,” have had a profound impact on Generation Z.

“Period effects like the Great Recession, the pandemic and the current inflationary environment have made Hawai‘i Gen Zers feel more financially insecure,” she writes in “Brain Drain to Brain Gain.”

Some had parents who lost their jobs during the Great Recession and the pandemic, and some Gen Zers did too. Others struggled to find employment as they graduated from high school and college into a challenging economy.

In writing her thesis, Kajikawa ran focus groups to gather Gen Z perspectives in Hawai‘i. She says that young people understand how financially precarious their lives are, and the insecurity weighs heavily on them.

“They’re really concerned about, ‘How am I going to pay off my debt? How am I going to afford a place to live? How am I going to save for retirement?’ ” Kajikawa explains in an interview.

“I see Gen Z as ambitious and driven. … It just requires more coaching and more time with managers and supervisors, and more empathy on our part. We need to ditch the ‘Oh, kids these days’ attitude and meet them where they are.”

— Courtney Kajikawa, Gen Xer and Senior VP and Manager, First Hawaiian Bank

Hawai‘i residents ages 20 to 24 earn an average of just $40,200 a year, which is far too little to survive independently. For those with student loan debt, the burdens are even heavier.

These economic concerns are felt worldwide, with 51% of Gen Zers saying they live paycheck to paycheck, according to the Deloitte Global 2023 Gen Z and Millennial Survey. They may want work-life balance, but 46% of Gen Z respondents said they’ve taken second jobs to make ends meet, compared to 37% of Millennials.

In a Morning Consult survey, half of Gen Zers said they wanted to become entrepreneurs or start their own businesses. Many dream of being influencers, while others make money live-streaming themselves playing video games on Twitch, or selling T-shirts or “kitschy little things” on Instagram or TikTok, says Fragiao from UH Mānoa. He says one of his friends left a job he hated and devoted himself to painting; he now sells his artwork online.

Data from McKinsey & Company shows that Gen Zers are more likely to be self-employed or working gig jobs than older workers, but 56% of them would prefer to have permanent positions. Like most people, they’re looking for stable paychecks.

Gen Zer Josie Dang, a rising junior studying health care management at UH West O‘ahu, agonizes over whether to take on her family’s full-service salon in ‘Aiea when she graduates, or keep studying for an MBA, or look for a professional job with regular pay.

Her father arrived in Hawai‘i as a refugee from Vietnam, and he started his business from the ground up. Dang says he and her stepmother work constantly, leaving her home to cook, clean and take care of her younger sister. She’s seen how owning your own business doesn’t always bring the freedom and flexibility her generation seeks.

She says she doesn’t want to seem ungrateful or be a disappointment, and that she knows she should take him up on the offer of taking over the family business. Instead, she says she “just goes back and forth. … Honestly, a 9 to 5 with a high salary is looking kind of good.”

Chang, from the Center for Tomorrow’s Leaders, believes that financial stability will guide many Gen Zer decisions.

“They’re true pragmatists,” she says. “A lot of employers think they need to put out the right messaging when it comes to political and social issues, and I think that’s true to a degree. But in the end, I think that the priority will be financial.”

Why Move Out?

In Hawai‘i, many young adults deal with the high cost of living by living at home. This multigenerational arrangement, long popular here, is growing across the country, with nearly 16% of Millennials (ages 28 to 43) living with their parents in 2022, according to U.S. census figures.

But the CTL leadership team wonders if the arrangement can be too cozy and interfere with Gen Zers’ growth and independence. They say the stigma of living at home is gone, and the motivation to leave is weak.

“Gen Z has a much higher desire to live at home, but there are things you learn by not being at home, so they have knowledge gaps,” says Chang.

High school teacher Nakamura, a Gen Xer, says she grudgingly stayed home after college, but she paid rent and saved to move out as soon as she could. Ramelb, a Gen Zer, still lives with her family and says both she and her family members love it. Still, she’s saving to live on her own one day.

At 26, Bernardo-Flores recently left his family home and moved into a rental in Honolulu. His mother didn’t want him to go, but after high school at Kamehameha Schools Kapālama, college at Chaminade University and a job downtown, the commute from Waipahu had become unbearable.

His father questioned why he was renting and not buying, like he had done as a young man. The house, Bernardo-Flores says, cost less than a tenth of the price today.

For Alexa, being away from home is worth it, for now. She recently moved into a small studio apartment in Kaka‘ako and is paying more than she’d like to, but she says she was tired of being treated like a child. “It’s hard to have your own life and live at home,” she says.

The decision to rent wasn’t easy, and she says she’s still “testing the waters” before deciding whether it’s really worth the money to live on her own.

Let’s Fix Things Around Here

Lizardo from the Chamber of Commerce Hawai‘i loves many things about Gen Zers, such as their social media skills and their sensitivity to what he calls “the isms”: racism, sexism, homophobia – they’re able to navigate those in ways that other generations aren’t able to, and to really be delicate but also very fierce.”

While the subtleties of talking about identity are clear for Gen Z, the nuances of communicating across generations are much less so. “They’re not afraid to push boundaries and share what they’re thinking about the workplace very quickly and easily,” before they’ve built trust and rapport with older colleagues, Lizardo says.

He coaches them in understanding the workplace culture before trying to change it, and improving their communication skills, such as writing business emails without using texting shorthand.

At First Hawaiian Bank, where 16% of the workforce – over 300 employees – are Gen Zers, Sherri Okinaga, a senior VP and head of the Organizational Effectiveness Division, embraces their energy, adaptability and what she calls “resilient risk-taking.”

“Seasoned employees want to focus on why policies and procedures exist and how existing programs came to be, whereas the younger generation is questioning, ‘Why do we have to do it that way?’” says Okinaga, a Gen Xer. “They’re reinventing work in a different way, using more AI and digital tools.”

Okinaga is working to make the bank “an employer of choice” among young people – and reexamining some of the traditional practices in the process. As nearly half the employees are Gen Zers and Millennials, and the executive team is made up of soon-to-retire Gen Xers and Boomers, she sees it as an imperative.

“Employers who are really galvanizing the Gen Z energy and creativity, by hearing their voices in the design of future work, are going to be the winners in the war for talent,” she says. “If we keep doing what we’re doing today, we will be out of business.”

The bank provides opportunities for young adults to learn, grow and lead, she says, and creates benefits and programs that appeal to them. For example, there are flexible hybrid work options; cross-mentoring that lets younger people coach older colleagues on technical skills; cohort-based learning programs to help them feel connected; and a quarterly awards program designed by younger staff and rolled out on social media.

Award winners are treated to dinner with the entire C-suite – an exercise in flattened hierarchies. “Employees can be in maintenance, in facilities, security guards, anyone,” says Okinaga. “It brings everybody closer and says every contribution matters.”

Image: AI & Jeff Sanner

What’s Next for Me?

Employee engagement lies at the core of any business’s success: Do people care about their jobs and do they try to do their best work?

Gallup polls say mostly not. In 2023, Gen Z engagement in the workplace dropped from 40% to 35%, and 14% of Gen Z employees were considered seriously disengaged.

The status quo isn’t going to work anymore, says Bernardo-Flores, the private banker and Gen Zer. Companies can’t expect young employees to do the same job for the same company, decade after decade, as his father did. Gen Zers want more than that, he says.

“We have an unusual labor market right now,” says Chang. “It’s important for employers to know Gen Z wants work-life balance, meaningful work and high salary. I think that expectations of really wanting all three are going to create demands on a lot of employers.”

And many Gen Zers are doing quite well for themselves. The Economist noted that the U.S. has more than 6,000 Gen Z chief executives and 1,000 Gen Z politicians. And many Gen Zers in Hawai‘i are defying generational stereotypes and quickly climbing the company ladder. But even as they do, they feel pressure to dispel others’ perceptions.

Bernardo-Flores says his father encouraged his kids to go to college so they’d have more opportunities than he did. His mother wanted them to find stable jobs with well-established organizations. The values of his parents shaped his own choices, he says.

After graduating from Chaminade in 2020, at the start of the pandemic, he moved from his part-time teller job with First Hawaiian into a full-time role. From there, he soon moved into the position of private banker, complete with a Bishop Street office with a view.

He says many of his peers started intensive training at the bank, then abandoned it after a few months. The fallout trickles down to people like him, who love their jobs. He says he appreciates the mixture of autonomy and guidance he’s given, as well as long-term pathways.

“I feel like as a Generation Zer it’s harder for me to gain that trust, to let my employer understand that I’m committed, I’m different from these other guys and gals that maybe weren’t,” he says.

Alexa, the operations manager, agrees that being one of the only Gen Zers among older colleagues means constantly having to prove herself. She says she works hard, at a high level, to combat low expectations, while given little support.

Despite her efforts, she finds it frustrating when she’s not taken seriously or left out of conversations. “There’s an attitude of, ‘You don’t know what you’re talking about, so I’m not really going to pay attention to what you’re saying,’ ” she says.

The sense of disillusionment with the adult world of working full time, paying bills and trying to stay afloat is leading her to question her prospects in Hawai‘i, the place where she was born and raised and had never wanted to leave.

“The world has changed. Older generations will say, ‘You just need to get your foot in the door and take any job you can.’ It doesn’t really happen like that anymore. You have to have so much experience and education to even get a job. … We need more opportunities for younger people to gain that experience.”

— Alexa, Gen Zer and an operations manager at a well-known Hawai‘i organization

“But the reality is there just aren’t many opportunities. It’s much too expensive, and the amount of work you need to do to live is not sustainable.” She’s looking at options, such as graduate school, working on the mainland – anything to escape a narrow, constrictive future.

While Bernardo-Flores says he’s committed, he’s also practical and ambitious – two traits that Gen Zers aren’t always known for, at least not yet.

“Money isn’t always the driving factor for us,” he says. “It’s the idea that we’re going to be recognized for our work, that the work we’re doing is high value, and that there’s long-term success waiting for us. If we don’t see that in the job, then we definitely won’t commit ourselves fully to it.”

The CEO of the Council for Native Hawaiian Advancement is looking for a boutique hotel to buy. If he’s successful, it would be the first for the nonprofit, which aims to enhance the cultural, political, economic and community development of Native Hawaiians.

Hotels are the foundation of Hawai‘i’s largest industry. In 2023, hotels statewide brought in $5.7 billion in revenue. But it’s not common for Native Hawaiian families or organizations to own these properties. Hawaii Business Magazine found only one hotel still owned entirely by a Native Hawaiian family. The state Department of Hawaiian Home Lands and three ali‘i trusts own land that 18 hotels stand on, but they are not hotel owners themselves. Instead, they use lease revenues to support their missions.

“One thing that’s very prevalent is we are not engaged meaningfully in the economics of the tourism industry as a people that call this place home,” Lewis says. “We get the 9-to-5 jobs, we get capped wages, but we’re not making the kind of money that the owners or the ownership structures are making. We’re not part of the curation of the story that’s being told or how people are presented with what Hawai‘i looks like.”

Some Native Hawaiians view a Hawaiian entity owning a hotel as a step toward economic justice for the Islands’ Indigenous people.

Hotel ownership is one goal of many Hawaiians. Another is that hotel owners and leaders, no matter their ethnicity, embrace Hawaiian values, educate themselves about Hawai‘i’s culture and history, and seek cultural guidance when appropriate. Several hotel leaders already do this, and many properties have cultural directors or advisors to guide their activities and, in some cases, influence property-level decision making.

Hawaiian-Owned Hotels

The Hawaiiana Hotel opened on what is now Waikīkī’s Beach Walk in February 1955. A newspaper article the following month described it as “capitalizing on every inch of its theme – everything Hawaiian.”

Woven calabash baskets and kapa hung in every apartment-style guest room. The hotel’s staff was all local, and its bellboys were accomplished musicians who would perform Hawaiian music several times a week. The hotel owners sought to provide each guest with personalized attention and “genuine old island hospitality,” wrote the author of the March 1955 Honolulu Advertiser article.

That hotel was built and then briefly owned by Kepoikai Aluli and his partners. Aluli also pioneered cooperative apartments on O‘ahu and spearheaded development of the Nāpili resort area on Maui in the 1950s and ’60s.

Aluli first learned of co-ops while attending school on the U.S. mainland, his nephew Nane Aluli says. In co-ops, residents or investors are shareholders in the cooperative, rather than owners of units.

Kepoikai Aluli and his partners built The Mauian and Nāpili Village Hotel as cooperative hotels. The Mauian’s lease returned to Aluli in 1996; he converted the property into a traditional hotel that his family members owned until 2003. The Nāpili Village Hotel’s ground lease returned to the Aluli family a few years ago; today, the family continues to own and operate the property as a hotel.

The Kimi family has also owned hotels across the state. Richard Wassman Kimi built the Kaua‘i Sands and the Kona, Hilo and Maui Seaside hotels in the 1950s, ’60s and ’70s for budget-conscious travelers. He also owned the Waikiki Biltmore for a time. And his brother, William Kimi Jr., built and owned Uncle Billy’s Kona Bay and Hilo Bay hotels. The Neighbor Island hotels remained in their family for decades; the last ones were sold in 2021 and 2022.

Another Native Hawaiian-owned hotel was the 318-room Keauhou Beach Hotel. Amfac opened the hotel in 1970, and it was the first hotel in Kamehameha Schools’ 1,100-acre Keauhou resort and residential complex.

Kamehameha Schools acquired the Keauhou Beach Hotel in 2006. Greg Chun was the president and manager of the KS subsidiary charged with implementing its Keauhou Resort master plan. He says KS did not originally plan to become a hotel owner, but it saw an opportunity to turn the hotel and its neighboring parcel into a cultural destination with educational programming.

The hotel was situated among some of Hawai‘i’s most significant cultural sites. To the north was Po‘o Hawai‘i, a pond with an underground connection to the ocean, where ali‘i would bathe. And to the west were Kapuanoni, Hāpaiali‘i, Ke‘ekū, Hale o Papa and Mākole‘ā heiau.

The hotel was managed by Outrigger Hotels & Resorts. Marissa Harman, director of asset management for KS, wrote in an emailed statement that KS worked with Outrigger’s management team to infuse the estate’s vision into the hotel’s activities from 2006 to 2012. The hotel hosted lau hala weaving classes with master weaver Elizabeth Malu‘ihi Lee, wa‘a voyaging and navigation workshops, slack-key and Hawaiian music festivals, and ‘ōlelo Hawai‘i events.

The intent was to have reciprocal relationships with the surrounding land, cultural sites and local communities. KS engaged in conversations with longtime area residents and restored three of the nearby heiau. Hawaiian families were also invited to record family stories and connect with one another and the broader Kahalu‘u and Keauhou ahupua‘a.

KS closed the Keauhou Beach Hotel in 2012 in the aftermath of the Great Recession and the estate’s growing concerns about the hotel being incompatible with the site: It had been built on and around several heiau, and it jutted out over the ocean, Harman wrote. The hotel was demolished in 2017 and 2018, and the area is now a gathering place and educational complex called Kahalu‘u Ma Kai.

Financial Resources Needed

The Aluli family sold The Mauaian in 2003. Nane Aluli, who has served as the hotel’s general manager since 2000, says the family didn’t have the financial resources needed to renovate the hotel and make it competitive.

“When you talk about the old Maui (Seaside) and Kaua‘i Surf properties, those were all owned by local families,” he says. “We didn’t have offshore owners, and then it got to a point the local families couldn’t keep it up.”

He says that the large amount of money required to sustain a hotel operation is one of the greater barriers to Native Hawaiian hotel ownership. “I think that becomes the most difficult piece,” when it comes to sustaining a property and passing it on to future generations, he says. “You’ve got to be able to financially make it successful, and that’s tough in today’s environment.”

Keith Vieira, principal of KV & Associates Hospitality Consulting, says that’s largely why Hawai‘i’s ali‘i trusts and other major Native Hawaiian organizations have stayed away from owning hotels. Those organizations instead look for guaranteed, steady income from their leasehold tenants.

He adds that the cost to acquire a hotel will vary depending on the property, but it’s hard to find something for less than $500,000 a room. It’s also common for hotel acquisitions and renovations to be funded through debt, and not everyone wants to take on that risk.

“That’s why you have private equity groups who are some of the primary owners because they have the ability to raise hundreds of millions for renovations and repositioning,” Vieira says. “And if you don’t continually renovate and reposition, you’re never going to make money in the long run. So I don’t think that fits directly with what some of these Native Hawaiian groups want to do.”

While Native Hawaiian families have owned hotels here, Vieira says that, to his knowledge, no Native Hawaiian organizations have owned major hotels in the Islands. He adds that he can understand the appeal of having Native Hawaiian groups own hotels and be able to influence employees and the surrounding communities, but he thinks it’ll be difficult to break into the traditional resort space. There may be opportunities, however, to own hotels that focus on health, culture, ranching and other types of diversified tourism.

That’s a concept that Hilo designer Kūha‘o Zane explored about 10 years ago. His plan was to submit a proposal for an ‘āinabased hotel on Hawai‘i Island where guests would get a luxury hospitality experience and help grow the food they’d eat. The land he had his eye on became unavailable, so he never submitted his proposal.

Such experiences would connect visitors with the ‘āina, he says, “so that when you leave Hawai‘i, you feel like you have more of a connection to ‘āina. And that would be more of a goal of Hawaiian-owned hotels.”

Broken Barriers

It’s an anomaly for a hotel to have a Native Hawaiian general manager or director, says Mālia Sanders, luna ho‘okele (executive director) of the Native Hawaiian Hospitality Association. She can only count a handful of them in the Islands, so having a Native Hawaiian-owned hotel would be a significant breakthrough, she says.

About 47,000 Native Hawaiians work in tourism-intensive industries, accounting for nearly 20% of all workers in the sector, according to a 2023 report by the state Department of Business, Economic Development & Tourism. Compared with all employees in the sector, Native Hawaiians are younger, more likely to be single and less likely to have a bachelor’s degree. They’re paid about 12% less than the average tourism worker.

“To have that representation is critical as the industry should be reflective of the community,” Sanders says. “Who knows Hawai‘i better than kānaka?”

Lewis, the CEO of the Council for Native Hawaiian Advancement, says he’s been “hunting high and low” for a hotel for about four years.

“I feel like even if you start with a 12-unit or 15-unit or 20-unit hotel, you provide exceptional Hawaiian hospitality and they experience Hawai‘i, whether it’s being greeted by a hula dancer or having an enriching experience, then the other hotels will start to follow,” he says.

A couple of years ago, CNHA established its Kilohana tourism division. The word “kilohana” refers to the outer layer of kapa and represents the finest of Hawai‘i, Lewis says. That’s what he envisions for a CNHA-owned hotel – the furniture, stories, visitor experiences, employees, management of resources and community involvement would embody Hawai‘i and its values.

“From a cultural lens, it means the elements of Hawaiian culture that are often commodified and sold, maybe they look more like intentional incorporations into the way in which the hotel does business,” says Tyler Iokepa Gomes, chief administrator of Kilohana. “And I think the intentionality is sort of the highlight there.”

That intention also translates to caring for the surrounding community. Lewis says he would want a CNHA-owned hotel to have a line item in its budget for community contributions.

“These hotels have kuleana, the businesses that are benefiting from the visitor industry, our culture,” Lewis says. “And the truth is Hawai‘i’s tourism industry is on the backs of Hawai‘i’s cultures, on the backs of our land. You need to contribute to that in order for it to continue to thrive. And that’s just not happening meaningfully. It’s going to shareholders.”

Lewis recognizes that the hotel industry has made progress in incorporating Hawaiian culture and hiring locals for leadership positions but says there’s too much focus on profit and not enough focus on providing genuine hospitality. The way to shift it back, he says, is for Native Hawaiian organizations like his to force themselves to the decision-making table, which is what CNHA has done by creating the Kilohana Hula Show. The show, a reimagining of the Kodak Hula Show that ran for 60 years, is an effort to revive authentic hula in Waikīkī.

“I’m not OK with the status quo,” he says. “I’m not OK with the trajectory that we’re currently on. And if there’s something we can do about it, then I’m going to try, at least.”

Embracing Hawaiian Values

Kepoikai Aluli, the co-op pioneer, sold his interests in the Hawaiiana Hotel in 1956 to Harry Meyer, who ran the property for 20 years. Maile Meyer is Harry Meyer’s daughter and Aluli’s niece. She says her father, who was from the Midwest, was mentored by Outrigger founder Roy Kelley and ran the Hawaiiana with a Hawaiian sense of place and hospitality.

She grew up with her parents inviting hotel guests for dinner at their Kailua home. Their relationships would be so close that her family would visit the guests at their homes in the continental U.S.

Maile Meyer’s father is an example of how non-Hawaiians in the industry can adopt a Hawaiian way of thinking. Kainoa Daines, senior director of destination education at the Hawai‘i Visitors and Convention Bureau, says it’s important for hotel owners and leaders to have that mindset. He adds that just because a hotel owner is Native Hawaiian doesn’t guarantee he or she will embrace Hawaiian values.

“When you see hotel general managers who may be from elsewhere but embrace and understand local values and they’re not just lip service, but they are living that lifestyle and making decisions based on that, then it really makes a difference,” he says.

He served on a cultural advisory committee when Disney’s Aulani resort was being planned. He saw members of Disney’s creative team, called Imagineers, come to Hawai‘i to learn about the language and culture. They also listened when cultural consultants pointed out elements of the resort that were inappropriate.

“When you go to Aulani, you do feel the Disney feeling,” he says, but when you look around, “you feel like they really applied their time by investing in the thinking process.”

The Kā‘anapali Beach Hotel is another example where nonHawaiian management embraced Hawaiian culture and values, he adds. That hotel is often called Hawai‘i’s “most Hawaiian hotel.” Its former longtime GM, Mike White, studied under Hawaiian cultural authority George Kanahele and created a training program in the 1980s for employees to learn about Hawaiian values, language, geography, food, music and history.

Vieira adds that the major hotels and mainland management companies have long understood the importance of embracing Hawaiian culture and giving back to the community. The annual Visitor Industry Charity Walk is a major fundraiser for local causes, and many Maui hotel owners provided shelter, funds and meals to employees and others displaced by the August 2023 Lahaina wildfire.

Major Landowners

The 18 hotels located on land owned by the three ali‘i trusts and the state Department of Hawaiian Home Lands include some of the Islands’ most prominent hotels, among them the Royal Hawaiian, Four Seasons Resort Hualālai, the Kahala Hotel & Resort, and Outrigger Waikiki. Two of the trusts and DHHL plan to allow additional hotels to be built on their lands.

The Lili‘uokalani Trust plans to allow others to build two hotels with a combined 200 rooms in its planned 70-acre Makalapua Project District in Kailua-Kona. The trust was created in 1909 for the benefit of orphans and destitute children, with preference given to Native Hawaiians. It owns the land under the Waikiki Beach Marriott Resort & Spa. Representatives from the Lili‘uokalani Trust declined to be interviewed for this story.

DHHL Director Kali Watson says his department is exploring whether a 41-acre parcel in Wailua on Kaua‘i is a good fit for a master planned development that could include a hotel, as well as opportunities to support beneficiary businesses and farms and to integrate Hawaiian culture. He likens the idea to the Polynesian Cultural Center on O‘ahu.

“The reality is that tourist dollars are very instrumental in supporting our economy, and if we do it right, we can provide more than just a site for tourists to visit,” Watson says.

The 41-acre parcel is adjacent to the Hilton Garden Inn Wailua, which generates about $366,000 a year in lease revenue for DHHL. The department also owns the land under the Hampton Inn & Suites Kapolei.

Watson says the amount of lease rent the department receives from the Hampton Inn’s sublease is confidential at the hotel owner’s request, but the Ka Makana Ali‘i general lease overall brings in about $4.7 million a year. The department’s lease revenues support homestead development and the homestead associations around the state. The Hampton Inn primarily serves visitors from the Neighbor Islands, and its owners are considering building a second tower, he says.

In addition to Wailua, another potential site is 184 acres in Pu‘unēnē on Maui. Watson says that if the department decides to proceed with hotel development, it will work with private developers who would build and then own the structures.

“To get ownership, you have to invest in the development and pay for the hotel. That’s something we’re not interested in doing,” he says. “We’d rather have other people develop, design, construct and then pay us rent for that. It’s a lot more, I think, appropriate for our department.”

Market studies still need to be conducted to see if the areas can support additional hotels. Watson says the intent is to develop the parcels, which are largely underutilized, to maximize the amount of lease revenue going to the department and to create opportunities for Native Hawaiians. A few years ago, the department unsuccessfully proposed building a casino on its land to generate revenue.

Kamehameha Schools is considering building a culturally appropriate boutique hotel as part of its Keauhou Bay Master Plan. Harman wrote that 150 units of low-impact lodging would enable KS to generate funds, improve stewardship of the area, create economic opportunities for Kona kama‘āina, and encourage the community to enjoy and better appreciate the wahi pana (sacred places) of Keauhou and Kahalu‘u.

Current plans, which are not yet final, call for a heritage management corridor to protect the birth site of Kamehameha III and to link to other significant sites along the Kona Coast. It would also be used to promote Native Hawaiian identity.

Harman writes in her email that it’s important that KS, the community, government and businesses “challenge ourselves to innovate and explore regenerative visitor opportunities as part of sustainable community development in our Islands.”

KS currently owns the land under six hotels on O‘ahu and Hawai‘i Island. Jeff Mau, director of asset management for KS, declined to say how much revenue those land holdings generate but wrote in an email that the revenue supports the estate’s educational mission, and that KS is open to investments that can benefit that mission.

The Queen Emma Land Co. is a nonprofit that was created to support and advance health care via The Queen’s Health System. It owns the land under nine Waikīkī hotels.

Bruce Nakaoka, VP of the Queen Emma Land Co., wrote in an emailed statement that the company supports The Queen’s Health System by managing and enhancing the income-generating potential of the legacy lands on O‘ahu and Hawai‘i Island left to The Queen’s Hospital by Queen Emma in 1885, “balanced by our efforts to environmentally restore and sustain” the ‘āina. “QELC continues to look for opportunities to work with the community to be good stewards of the lands.”

Demand for Native Ownership

Visitors want the option of staying at Native Hawaiian-owned hotels, Sanders, of the Native Hawaiian Hospitality Association, says.

“They call all the time asking how they can spend their dollar responsibly, from start to finish of their vacation, not only just with the activities that they want to do, but with the place where they lay their head,” she says.

It’s hard to tell them that option doesn’t exist, she says. And she explains to them that some hotels are situated on Native Hawaiian-owned land, and that by staying at those hotels, some of their money goes to support Native Hawaiian programs.

Sanders, a board member of the American Indian Alaska Native Tourism Association, sees Native Hawaiian-owned hotels as a way for Hawaiians to exercise sovereignty. She says Indigenous groups elsewhere in the U.S. have built and owned casinos and hotels to support their members and to help build and repair hospitals and other infrastructure in those communities.

Daines, of the Hawai‘i Visitors and Convention Bureau, is the official emcee for AIANTA’s annual American Indigenous Tourism Conference. He says that it’s nice to see their cultures live because of the revenue generated from those properties.

Local models exist for Native Hawaiians and local communities to directly receive tourism dollars, Hilo designer Zane says. He cites Hā‘ena on Kaua‘i’s North Shore, where two community nonprofits manage access to the state park and use the revenues to reinvest in the community.

Other examples include the aloha wear and hula industries, where Native Hawaiians have been able to flourish economically and share their unique stories. In those industries, Native Hawaiians have claimed part of the state’s economic pie, he says.

“If we were to have Native Hawaiian-owned hotels … economic justice would be at the top of the page of that, but at the same time, I think the authentic product of what is Hawai‘i would be so unique at that point, that you wouldn’t be able to get that anywhere else,” Zane says. “Like no Hilton, Rosewood, Four Seasons would be able to duplicate that product. And I think that also ensures our economic viability.”

On the hottest day ever recorded in Honolulu – Aug. 31, 2019 – a group of volunteers organized by the Honolulu Office of Climate Change, Sustainability and Resiliency attached heat sensors to their cars and collected readings around O‘ahu. The project’s timing just happened to coincide with the oppressive weather, brought on by a record-breaking marine heat wave that was cooking up the waters around the Islands.

The volunteers recorded startling discrepancies. While the air temperature hit a high of 95 degrees Fahrenheit, the “heat index,” which also factors in humidity, reached 107.3 degrees, logged at the Waimalu Plaza shopping center between 3 and 4 p.m. That was more than 22 degrees higher than the coolest temperature on O‘ahu recorded that hour.

This commercial stretch of ‘Aiea is one of the city’s many “urban heat islands,” where buildings, rooftops and pavement absorb the sunlight and re-radiate it as heat. Few trees are around to cool the area by blocking and reflecting the sun, or, in a process called evapotranspiration, releasing water into the atmosphere through their leaves.

And there’s another layer of heat to consider. The heat index is measured in shade. But the tropical sun can dramatically heat surfaces, making a sunbaked sidewalk or parking lot significantly hotter.

John DeLay, an associate professor of geography and environment at Honolulu Community College, measured temperatures in direct sunlight and under the thick canopy of a monkeypod tree at Makalapa Neighborhood Park near Pearl Harbor. While the air temperatures in the shade and sun were nearly identical, surfaces in the shade were 12 degrees cooler. “That’s why you’re feeling a significant difference in your body temperature,” he says.

About 1 million people live on O‘ahu, most in developed areas that are prone to the urban heat-island effect. Pockets of high heat and low vegetation can be found all along the coastal plains of O‘ahu, including in Pearl City, Waipahu, Kapolei, and Wai‘anae.

In the core of Honolulu, low-lying neighborhoods get dangerously hot, as shown by the dark red areas of the O‘ahu Community Heat Map. At these hot spots – stretching from the Daniel K. Inouye International Airport to residential areas hugging Wai‘alae Avenue in Kaimukī – afternoon temperatures on that extreme heat day in 2019 reached 99.7 degrees and higher.

Jammed with apartment buildings and tightly packed houses, many of the trees and gardens in these dense urban areas have been cut down and paved over for parking. Municipal “street trees,” wedged into small plots of dirt along sidewalks, can have short lives and stunted growth, with little chance of developing the thick, sprawling canopies of mature shower trees blossoming in a park.

Tree canopy maps created in 2022 by the state’s urban forestry program, Kaulunani, along with the U.S. Forest Service, show that in neighborhoods such as Kalihi, McCully-Mō‘ili‘ili, Kapahulu and the makai side of Waikīkī, and parts of Kaimukī and Pālolo, tree-canopy coverage is less than 8% and as low as 2% – far less than the city’s goal of 35% coverage. Honolulu’s overall canopy coverage is estimated at 20%.

These neighborhoods are also some of the most disadvantaged parts of the city, as shown on the multilayered canopy map depicting income levels. Median household incomes in many of these areas fall in the lowest ranges – from $25,000 to $57,000 or from $57,000 to $76,000 – according to data from the 2015-2020 American Community Survey.

But travel south to north, into the cooler, often rainier and greener neighborhoods at higher elevations, and income levels tend to rise precipitously, a historical pattern that began in the 19th century as those with means moved out of the hot, congested town that had coalesced around the harbor.

Heat Is a Public Health Crisis

Those over-paved areas that don’t have sufficient tree canopy are going to be the hottest,” Brad Romine of the Honolulu Climate Change Commission says. Romine, a coastal resilience specialist with the UH Sea Grant College Program and deputy director of the Pacific Islands Climate Adaptation Science Center, has worked with the five-member commission to develop guidelines that track the impact of urban heat and recommend ways for city and state officials to deal with it.

Average temperatures in Hawai‘i have risen 2.6 degrees Fahrenheit since 1950, and about 3.5 degrees at the Honolulu airport, according to Matthew Gonser, chief resilience officer and executive director of the Honolulu Office of Climate Change, Sustainability and Resiliency. Much of that rise has been in the past decade, and near-future projections show it will get hotter.

“We have seen a marked increase in hot days and warm nights. … It’s one of the most conspicuous, in-our-face results of using dirty fossil energy and the resulting climate changes.” – Matthew Gonser

In a heat wave like the one in 2019, when trade winds collapse and humidity rises, the heat can be punishing on the body.

Dr. Diana Felton, head of the state Department of Health’s Communicable Diseases and Public Health Nursing Division, says that vulnerable people will bear the brunt of the impact of intense heat: the elderly and children, outdoor workers, people with chronic health conditions, and those who can’t afford air conditioning or access health care.

Felton is a lead member of a new DOH working group that’s studying the local health impacts of extreme heat, floods, drought, wildfires, mosquito-borne illnesses and five other climate threats illustrated on a circular chart that Felton calls, with dark humor, “the pinwheel of death.”

The Climate Change and Health Working Group was formed to expand climate-change planning beyond sea-level rise and protecting infrastructure, she says. “No one was talking about the disease and injury that is going to come from climate change, and has actually already come.”

Felton is working with the group to gather evidence of how heat is impacting health in Hawai‘i, and is still sifting through data. But one fact is well documented across the globe: Fatalities rise when the heat index reaches 95 degrees – which can be air temperature of 90 degrees and humidity of 50%, for example – for an extended period.

“The longer the heat wave goes on, you have increased mortality,” explained Dr. Elizabeth Keifer, an assistant clinical professor at UH Mānoa’s John A. Burns School of Medicine, at a seminar in January.

Romine says that urban Honolulu could experience intolerable heat in just a few decades. “I think we could surpass 2 degrees Celsius (3.6 degrees Fahrenheit) of warming by mid-century, and that’s only going to exacerbate heat waves,” he says. “What that means is more frequent and severe heat emergencies.”

At Honolulu’s Division of Urban Forestry, part of the Department of Parks and Recreation, new administrator Roxanne Adams says her groundskeepers have switched to long-sleeved, high-visibility Dri-Fit uniforms that don’t require the extra layer of a safety vest. She plans to buy cooling neck wraps to supplement the ice water that work crews carry in their trucks.

Roxanne Adams, administrator of Honolulu Department of Parks and Recreation’s Division of Urban Forestry, is responsible for trees in public parks and rights of-way. It’s a big job that requires residents to help: “If neighbors are watching the trees in front of their house, the chances of survival increases greatly. | Photo: Aaron Yoshino

“They notice the heat. We all notice that it’s hotter and drier than when we were kids,” Adams says.

“We’re not going crazy when we say, oh my gosh, it’s not as comfortable to sleep anymore,” Gonser echoes. “We have seen a marked increase in hot days and warm nights. … It’s one of the most conspicuous, in-our-face results of using dirty fossil energy and the resulting climate changes.”

Federal Funds to Expand the Canopy

In November, $42.6 million in competitive federal grants, funded by the Inflation Reduction Act and administered by the U.S. Forest Service, was awarded to Hawai‘i groups to provide “equitable access to trees.” In raw dollars, only California, New York and Oregon received more money than Hawai‘i, and in terms of funding per resident, Hawai‘i topped the list.

“It just shows how ready people are to take on this kind of work. … I feel like in five years we’re going to look back and say, wow, this was an amazing time,” says Heather McMillen, an urban and community forester.

McMillen heads the state’s Kaulunani program, an urban and community forestry initiative at the state Department of Land and Natural Resources’ Division of Forestry and Wildlife. Her small office distributes grant money, does outreach and education, and partners with the city, state and nonprofit sector to improve the health and viability of Hawai‘i’s trees.

Kaulunani received a $2 million competitive grant from the U.S. Forest Service, and is launching a project to plant shade trees at select Title 1 schools, where at least 47% of students qualify for free or reduced-price meals.

McMillen says that if you look at all public school campuses, and extend the footprint to include a half-mile buffer around the school, only 21% would meet the minimum goal of 30% tree canopy. But among the 67% of schools that are designated Title 1, or 197 schools, just 14% have these fuller canopies – an example of disparities in who has access to the cooling benefits of trees.

The project also involves creating a school forester position to work with teachers and staff on maintaining the trees. “Planting the trees is the easy part. Helping them grow to their full potential … is a much longer-term commitment,” McMillen says.

Heather McMillen, coordinator of the state Kaulunani community and urban forestry program, says: “Trees are not beautification. Trees aren’t nice to do. This is critical infrastructure, and it needs to be part of the planning process. | Photo: Aaron Yoshino

Other groups receiving funding include the Akaka Foundation for Tropical Forests and the Friends of Amy B. H. Greenwell Ethnobotanical Garden, both on Hawai‘i Island, and various county, state and UH Mānoa projects.

The largest U.S. Forest Service award in Hawai‘i, at $20 million, went to Kupu, a 17-year-old nonprofit that has trained thousands of young people, many from disadvantaged backgrounds, for jobs in conservation and natural resource management. In the process, its teams have cleared about 150,000 acres of invasive species and planted 1.5 million native specimens.

CEO and co-founder John Leong explains that most of the $20 million grant will be re-granted to other groups in Hawai‘i and the Pacific region over the next five years, with Kupu providing technical expertise. The application process is expected to open in the second quarter of 2024.

In the world of urban forestry, the Kupu grant is a huge amount of money. For comparison, Hawai‘i’s 2023 state allocation for urban and community forestry from the U.S. Forest Service is $1.5 million. Many people interviewed for this article say they’re eager to find out who will win sub-grants from Kupu and what projects will be funded.

The broad theme of the federal grant is to expand the tree canopy and cool down places where people live, but the finer details require projects to benefit underserved areas. Projects linked to creating green jobs and engaging communities in planning and decision-making are also prioritized.

The O‘ahu community heat map identifying urban “hot spots” was developed by the Honolulu Office of Climate Change, Sustainability and Resiliency. It’s based on peak afternoon temperatures recorded on Aug. 31, 2019. The full islandwide map can be found at tinyurl.com/oahuheatmap

Kupu’s mission lands at the intersection of all those goals. Leong says it will seek out organizations that will bring trees to “under-resourced” areas, both urban and rural, and build up a workforce of arborists and conservation workers.

He’s especially focused on training and educating, both for those doing the work and the broader community that benefits from more trees, more jobs, and an understanding of how climate change will impact them and what they can do about it.

“When you educate a young person, you’re really impacting about seven people: their parents, their grandparents and their siblings,” he says.

In the fight against climate change, “We have all the right stuff in our Islands to be a model for the rest of the world,” Leong says. “But we also have to engage communities at the grassroots level, empower them and give them the resources they need on the ground to be successful. That’s really what this grant is about.”

Why Trees Are Important

In 2016, the nonprofit Smart Trees Pacific released the dispiriting results of its urban tree-canopy analysis. Nearly 5% of the tree canopy, or about 76,600 trees, had disappeared in a four year span. The consensus among experts is that things haven’t improved since then.

Trees are cut to make way for larger houses or more parking space for multifamily homes. They’re cut because they’re old, and then not replaced, or because it’s easier to remove a tree that’s interfering with a sidewalk or utility project than to work around it. They’re cut because a homeowner is worried about liability. And many times, they’re cut because someone wants a better view or just can’t deal with the rubbish.

“It’s death by a thousand cuts,” says McMillen from the state’s Kaulunani program. No one tree-removal project accounted for a significant portion of the loss, she says, and it’s happening on both public and private land.

Gonser, from the city’s climate change office, says street trees are sometimes destroyed maliciously. That’s an added insult when you consider all the nurturing required in a tree’s first few years, before it’s planted in the ground, and “it’s vandalism of a city asset and infrastructure.”

Trees can take years, even decades, to get large enough for their benefits to dramatically overshadow their costs. “They cost money to maintain, as do sidewalks, as do stoplights, as do fire hydrants. But unlike that kind of infrastructure, trees are the only kind of infrastructure that increase in value over time,” McMillen says.

An analysis conducted for the city’s Division of Urban Forestry found that for every dollar spent on Honolulu’s trees, the city gets back $3 in benefits. Estimates in many other cities show even more positive cost-benefit ratios.

On the global level, trees are called the “lungs of the world” for their ability to pull enormous quantities of carbon dioxide from the air, which they store in their trunks and branches. With the help of the sun, trees then release oxygen through their leaves. A dramatic NASA time-lapse video shows the forests of the Northern Hemisphere sucking carbon dioxide from the air through photosynthesis as trillions of leaves open in the spring and summer.

The lungs metaphor goes deeper as well. For people who feel connected to trees, or just aware of their contributions, trees don’t just make life on Earth possible, they make it worth living.

Trees provide shade and cooling. They clean the air by removing pollutants, and provide food for people and habitats for birds. They protect against flooding by absorbing stormwater and help prevent beach erosion.

Trees reduce noise in the city, and traffic calms along tree-lined streets. In hot climates, their shade makes a city more walkable and bikeable.

And there are intangible benefits too, McMillen says: Trees are the “keepers of memories” for anyone who spent time playing in them as a child, and they can strengthen social connections among neighbors sharing fruit from backyard trees. They help define a place and remind us where we are on this planet.

Trees can even change cortisol levels, heart rates, breathing and mood. At the Tropical Landscape and Human Interaction Lab at UH Mānoa, students’ physiological, “preconscious” responses were captured as they viewed images of trees. Lush, green canopies triggered states of relaxation while images of canopies with their tops lopped off had the opposite effect, says Andy Kaufman, an associate professor of tropical plant and soil sciences and a landscape specialist.

For all their benefits, trees and other vegetation are often taken for granted and treated as disposable. “Nature is so important to us, but landscaping is the first thing to be cut and the last to be addressed,” says Kaufman, who founded and runs the interaction lab. “We should embrace living in nature,” not work against it, he says.

Kaufman has seen many examples of trees chain-sawed at the top, which lets disease and pests enter the tree and weakens the branches that grow back from the stumps. He’s seen trees clear-cut from an ‘Ewa school’s campus, a “complete streets” project in ‘Aiea that failed to include trees, new buildings constructed with only a tiny strip for plantings, and – in an especially egregious case – miles of oleanders along the Moanalua Freeway ripped out and replaced with concrete.

The biggest challenge, Kaulunani’s McMillen explains, is to get policymakers, developers, homeowners and anyone who cares about their neighborhood to change the way they think about trees.

“Trees are not beautification. Trees aren’t nice to do,” McMillen says. “This is critical infrastructure, and it needs to be part of the planning process, not an additional thing to do if you have funds or if you have the inclination.”

Where Trees Are Needed Most

The City and County of Honolulu’s Division of Urban Forestry can trace its roots to the Shade Tree Commission, which started in 1922 to deal with the ongoing issue of how to cool a tropical city, now getting hotter with climate change. “I would love for our city to be a city in the forest. I’m a firm believer that trees make everything look better, cleaner and more friendly,” says Adams, the division’s administrator.

Before joining the division last year, she spent two decades overseeing the more than 4,000 trees at UH Mānoa. The campus is an accredited arboretum and includes what’s probably the nation’s largest baobab tree, which is at least 110 years old.

Her new role overseeing the estimated 250,000 trees in city and county parks and public rights-of-way offers a vastly larger canvas for planting – the entire island of O‘ahu – but also far more challenges.

At the moment, Adams’ division is finishing a complete inventory of all city trees, which will let her team know exactly what trees they’re responsible for, which ones need attention first and where to plant next. The project, funded in 2022 with $300,000 in federal assistance, will be done before the end of June.

She’s also been focusing on filling vacancies that have accumulated over the past decade. Adams says her team is nearly fully staffed to do the hard physical labor of digging holes and planting trees, many of which start from seeds in the division’s nursery at Kapi‘olani Regional Park.

Once the tree inventory is complete, Adams says her goal will be to plant where shade is needed most, such as in Kalihi, Mō‘ili‘ili, Kapahulu and Kaimukī, and outward to ‘Ewa, Nānākuli and Wai‘anae.

“We’re definitely looking at equity and will be planting in those neighborhoods,” Adams says.

Kaulunani and U.S. Forest Service maps track tree canopy coverage and heat vulnerability, and also data such as median family incomes in a particular area, the presence of impervious surfaces, the prevalence of asthma and cardiovascular disease, the number of residents by census tracts and Native Hawaiian populations. That fuller picture of which neighborhoods are being left behind – economically, environmentally, medically – seems to be shifting the conversation about where to focus efforts.

Gonser, from the city’s climate change office, says that, over time, patterns in how a community is designed and developed “can exacerbate increasing temperatures and make it hotter in places. There really are disparities or inequities as a result of these practices. … We’re trying to make sure that we bring focused, strategic attention to those neighborhoods.”

People living in treeless, low-income areas on O’ahu, such as this stretch of Mō’ili’ili, suffer most in heatwaves.

 

In contrast, monkeypod trees line Kapi’olani Boulevard from Atkinson Drive to South Street, offering shade and cooling to pedestrians and residents.

While planting in an older neighborhood full of hardened surfaces and densely packed housing requires more effort than in more remote areas, among urban foresters, anything is possible. Their often-repeated motto is “the right tree in the right place with the right care.”

In unshaded neighborhoods, for example, sections of concrete can be removed from sidewalks to make space for plantings. Clusters of small street trees can be planted together to create a bigger canopy. For something more ambitious, car lanes could be used for planting large canopy trees, such as the monkeypods that line Kapi‘olani Boulevard from Atkinson Drive to South Street – a grove that’s been designated as one of Hawai‘i’s “exceptional trees.”

While trees can pose difficulties, those difficulties are surmountable, Kaufman from UH Mānoa says. “There are always ways to restructure roads. You can always work around trees. … Green infrastructure should be business as usual in every municipality.”

He and a team of researchers recently found that using Silva Cells – a modular, suspended pavement system developed a decade ago – is the most promising way to grow healthy street trees in Hawai‘i. Unlike other methods they tested, the roots stayed contained rather than sprawling out and up, damaging infrastructure. He says the long-term tests were the first ever conducted in a tropical urban environment, where trees and their roots grow year-round.

It’s not a magic bullet, Kaufman explains. But better planting techniques could help expand the canopy in some of the city’s oldest, most crowded neighborhoods, where working-class and middle-class people began moving more than a century ago, as new tram lines opened up new possibilities.

The Old Suburbs

Honolulu, like everywhere, has been defined by shifting migration and development. Through much of its history, one trend seemed clear: wealthier people tended to congregate in the hills or near the water, while the less affluent settled in the low-lying, hotter middle.

The first hint of a city started in the early 1800s, as whalers began stopping here for parts, provisions and rest, and a makeshift harbor settlement emerged to meet demand. By 1845, the capital of the Kingdom of Hawai‘i had officially moved from Lahaina to a now bustling Honolulu.

Wealthy ali‘i and white settlers were the first to leave the core, says William Chapman, the interim dean of UH Mānoa’s School of Architecture and a professor of American studies, with expertise in historical preservation. They fanned out for more space, less disease and often cooler climates.

Queen Ka‘ahumanu, for example, regularly retreated to her Mānoa house, near the present-day Waioli Kitchen and Bake Shop, where she died in 1832. In 1853, the German physician William Hillebrand built a house and planted trees at the site of Foster Botanical Garden.

In 1882, Anna Rice Cooke and Charles Montague Cooke, both members of missionary families, built a home on Beretania Street, on the site where the Honolulu Museum of Art is now. When electric streetcars were introduced in 1901, and the first automobiles traversed the city’s roads, large estates were constructed in the hills of Nu‘uanu Valley. Some are now occupied by foreign consulates.

After the kingdom was illegally overthrown by white businessmen in 1893, the global sugar and pineapple trade accelerated, along with immigration. Contract laborers first arrived from China in the mid-1800s, followed by people from Japan, Korea, Europe, Puerto Rico and the Philippines.

Kaka‘ako in the late 1800s was filled with small houses for artisans, stevedores and service workers, many of whom were Native Hawaiian, says Chapman. Working-class and artisan-class residents began branching out into Kalihi and Liliha.

Honolulu Tree Canopy Map, 2021. Prepared by EarthDefine, U.S. Forest Service, NOAA and Hawai‘i Division of Forestry and Wildlife.

Streetcars opened up neighborhoods far beyond the harbor area. Many Japanese and Chinese workers, freed from contract labor that was deemed illegal in 1900, migrated east along King Street, renting or buying modest wooden houses stretching all the way to the rice fields of Mō‘ili‘ili.

By the 1920s, satellite communities as far away as Kapahulu and Kaimukī were developed as the rail lines expanded, while along the coast, affluent people had moved to the Diamond Head area and were expanding into Kāhala.

John Rosa, an associate professor of history at UH Mānoa, says his great-grandfather on the Chinese side of his family built a house on 16th Avenue during Kaimukī’s first wave of development. In the 1950s, his grandparents moved to a house in the breezy mountains above the neighborhood, in Maunalani Heights, where he grew up.

Many prosperous families had moved mauka into Mānoa Valley and Nu‘uanu, where whites-only “tacit agreements,” sometimes written into covenants governing new subdivisions, kept others out, explains Chapman.

These rules also determined the physical environment. “There were a lot of restrictions,” Chapman says. “It had to be a substantial lot. Residents weren’t allowed to build walls over a certain height. They couldn’t open a gambling den or a bar or a restaurant.”

The racial elements of the exclusionary practices were dropped after World War II, and the cooler, leafier neighborhoods opened to a mixture of people. Among the new Mānoa residents were many upwardly mobile Japanese residents who had gone to UH Mānoa on the federal GI Bill, Rosa says.

After the war, and before zoning laws were enacted in 1961, high-rise apartments were constructed amid the single-family houses of Waikīkī and Makiki. Eventually, cars brought people to the new postwar suburbs of ‘Āina Haina and Hawai‘i Kai, and then even farther from the city.

Today, some of Honolulu’s old working-class, mixed-use neighborhoods can feel improvised, a mismatched collection of small wooden bungalows, motel-style walk-ups with open corridors, taller “bare-bones” buildings with interior hallways, and their posher cousins, the newer high-rise condos.

“Planners aren’t the ones that actually build cities. It’s the developers,” Chapman says. “It’s like a rowboat and a tanker. The tanker is the developers, and they pretty well decide what’s going to happen.”

For example, setback regulations, which started in 1969, are still just 5 feet. “You’re supposed to put planting in the setback, but they’re often not very robust,” he says. “Developers probably see vegetation and trees as a luxury add-on. And if they don’t need to do it, they won’t do it.”

Chapman sees the old neighborhoods as “transitional,” with new housing set to rise in places like Isenberg Street in Mō‘ili‘ili. There, a 23-story tower is under development by the Department of Hawaiian Home Lands, and on Kapi‘olani Boulevard, the Kobayashi Group is constructing a 43-story condo.

But with no requirements for trees, shade, green walls or green roofs – on new high-rise projects or throughout the older neighborhoods – these urban heat islands will only get hotter.

Greening the City

Community groups have been focused on trees and shade since at least 1912, when the newly formed Outdoor Circle, a volunteer women’s group, planted 28 monkeypod trees in Honolulu’s ‘A‘ala Park. Those trees still stand today.

The organization has spent the subsequent 112 years planting and protecting trees in public spaces. In 2017, the Outdoor Circle helped found Trees for Honolulu’s Future, a nonprofit group dedicated to increasing the urban tree canopy, advocating for laws and policies, and educating the public.

The group’s president, Daniel Dinell, spearheaded the educational component of the Makalapa Neighborhood Park project, which quantified the impact of shade on how we experience heat. Young “heat island investigators” from the underserved area nearby learned to measure trees, read temperature sensors and test hypotheses.

Among the organization’s many projects, Dinell is also leading a group of “citizen foresters” to map the trees in Kaimukī and locate places to plant, and he’s working with the city to get trees in the ground. One of the big obstacles to new street trees, he says, is getting homeowners and renters to water the trees in their early years, when they’re still weak.

“Just activating the community is key to the goal of increasing the tree canopy,” Dinell says. Government agencies can’t do it alone, Adams, the head of Honolulu’s Urban Forestry Division, says. “It’s critical that our neighborhoods, our friends, our family chip in and help us get this done. It’s a kōkua thing. If neighbors are watching the trees in front of their house, the chances of survival increase greatly.”

Residents can contact Adams’ division to request a street tree, at 808-971-7151 or DUF@honolulu.gov. The city selects hardy trees that won’t become invasive pests; most native trees aren’t able to survive in harsh urban settings with vehicle pollutants and poor soils.

On Hawai‘i’s Arbor Day, about 4,000 trees, including fruit trees, are given away across the Islands. The next annual event, organized by Kaulunani and government, nonprofit and community partners, is scheduled for Nov. 2.

At the Honolulu Office of Climate Change, Sustainability and Resiliency, an ongoing effort to plant 100,000 trees on O‘ahu has passed the halfway mark. The agency’s online map tracks city plantings as well as trees planted on private property and larger restoration efforts.

The project, says Gonser, the office’s executive director, “was intended to be a campaign of awareness, and to celebrate those that are the true champions out in the community.” He says many plantings have not been recorded yet.

All of these efforts are steps in the right direction, and indications that more people and organizations recognize the value of trees in a time of rising heat and sweltering cities.

Globally, 2023 was by far the warmest year on record, according to NOAA. And while the heat affects everyone, it’s much worse in urban heat islands bereft of trees. And it’s particularly punishing for people without air conditioning.

“We’re already facing a lot of heat in these urban areas. It’s a problem we need to fix now,” says Romine, of the Climate Change Commission. “And if we start addressing it now, it’ll make these communities safer, more comfortable and more equitable, now and for the future.”

Illustration: Kalany Omengkar

It’s common for major Hawai‘i hotel transactions to make headlines. Among them was the $1.1 billion purchase of the Grand Wailea and the $275 million purchase of the Ritz-Carlton Kapalua in 2018. In 2019, the Holiday Inn Express Waikiki went for $205 million; two years later, the Royal Lahaina Resort was sold for $430 million and the Sheraton Kona Resort & Spa at Keauhou Bay for $90 million.

Each was acquired by a private equity firm, a type of investment company known for using lots of debt to buy companies and then doing quick flips designed to maximize profit. While private equity investments can help their acquired companies access needed capital and innovate, they’ve also caused devastating social impacts.

KKR and other firms drove Toys R Us into bankruptcy and laid off 30,000 workers, initially without severance pay. KKR has also come under fire for patient abuse, neglect and deaths that occurred at group home operator BrightSpring Health Services, spurring an investigation by four U.S. senators. The United Nations accused Blackstone, one of the world’s largest corporate residential landlords, of contributing to the global housing crisis for undertaking aggressive evictions, pushing out low- and middle-income tenants, inflating rents and imposing an array of fees.

Private equity firms manage about $12 trillion in U.S. assets and currently invest in 14,300 companies, according to Morningstar, a financial services and research firm. Private equity’s harmful impacts have been so dire in some cases that U.S. lawmakers in recent years introduced legislation to force them to take responsibility for the outcomes of the companies they acquire and tax institutional investments in single-family housing to discourage such purchases. President Joe Biden’s administration is also imposing a rule to require nursing homes that accept Medicare or Medicaid to disclose their owners.

Despite this national controversy, the large stake that private equity holds in Hawai‘i’s tourism industry has largely gone unnoticed. An analysis by Hawaii Business Magazine shows that two dozen private equity firms own 33 of the state’s 144 hotels –  controlling nearly 30% of all rooms – raising questions about whether some larger impacts of Wall Street control could be felt here. And West Maui, which was devastated by the August Lahaina wildfire, has the highest concentration of these owners: five of the 11 hotels are owned by private equity. In 2003, private equity owned 4% of the state’s hotels.

The 33 properties include hotels that private equity owns directly, through local subsidiaries or as part of ownership groups. And the count includes one 18-room Lahaina property that was destroyed in the fire but excludes military hotels, timeshares and condo-hotel properties, which have different ownership structures.

Community activists and others say that the increasing presence of Wall Street investors in Hawai‘i is one example of how the hotel industry is increasingly being run by real estate corporations more interested in their bottom lines than in providing excellent guest service or in the long-term impacts on local communities.

“It seems more and more the concentration of wealth and power are in the hands of the few, and it looks like the trend for hotels, resorts, short-term rentals – so all the tourism-related lodging,” says Keani Rawlins-Fernandez, a Maui County Council member.

Maui’s nine private equity-owned properties control half of the island’s hotel rooms.  Rawlins-Fernandez worries what will happen if more hotels are owned by private equity firms that maximize shareholder profit at the expense of their employees and the environment: “I’m very concerned about the health and well-being of Hawai‘i and Maui.”

Local hotel consultants and private equity owners say these private equity firms are responsible for major property improvements. Keith Vieira, principal of KV & Associates Hospitality Consulting, says those improvements have helped bring in higher spending visitors and that their investments in hotel upgrades are a large reason why Hawai‘i, before the Lahaina fire, was expected to generate nearly $1 billion during 2023 in transient accommodations tax revenues, the so-called hotel room tax.

He says that private equity is sometimes criticized because most firms are not based in Hawai‘i. Denver-based KSL Capital Partners, which manages $21 billion of assets, owns the Sheraton Kauai Coconut Beach Resort and, through its ownership of Outrigger Resorts & Hotels, eight properties. Blackstone, which manages $1 trillion of assets worldwide from its New York City headquarters, owns the Turtle Bay Resort, Grand Wailea, Ritz-Carlton Maui and King Kamehameha’s Kona Beach Hotel.

“It’s been better for us because they’re putting so much investment into these resorts,” he says. “But that’s not recognized.”

Corporate Investors

Private equity firms invest by assembling large pools of money from insurance companies, endowments, foundations, pension funds, family offices and wealthy individuals. These funds typically have 10-year lifespans. The firms use that time to create funds and raise money for them, and to then buy and manage their investments before finally selling them. Though a private equity firm generally puts in only about 1% to 2% of a fund’s capital, it makes all the decisions regarding acquisitions, use of debt and portfolio management.

Illustration: Kalany Omengkar

The goal of private equity firms is to overhaul the companies they invest in to increase their value and then sell them for a profit. They do that by finding costs to cut, increasing the efficiencies of operations, and making physical improvements to their assets. They also take out loans through their acquired companies to pay dividends to themselves and their investors. Their companies, not the private equity firms, are on the hook for those loans. For hotel acquisitions, private equity firms tend to use about 50% to 65% debt, according to local consultants and owners. That’s about the same for other types of hotel buyers.

Private equity also makes money by charging performance fees, typically 20% of their funds’ profits. That financial structure encourages them to aggressively pursue profits and shareholder value, though they also make money even if the acquired companies suffer losses. That’s done through annual management fees charged to their investors, which is usually 2% of a fund’s committed capital.

Jeff Hooke is the author of the 2021 book “The Myth of Private Equity: An Inside Look at Wall Street’s Transformative Investments” and a senior lecturer at the Johns Hopkins Carey Business School. He says private equity firms largely operate in the shadows thanks to minimal disclosure requirements imposed on them by state and federal governments.

“There’s no sheriff in town, there’s no pullup cop on the beat, as far as private equity goes,” he says. “It’s the Wild West.”

A few private equity companies, like Blackstone, KKR and Apollo Global Management, are publicly traded and subject to Securities and Exchange Commission regulations. But for the most part, the minimal disclosures often make it difficult to determine whether a company or property is owned by private equity. For this report, determining the ownership of Hawai‘i hotels often involved digging through layers of shell companies; those layers sometimes obscured the full ownership of the properties.

Unite Here Local 5, which represents about 7,000 Hawai‘i hotel workers, had been tracking private equity hotel ownership and shared its findings with Hawaii Business Magazine. I also searched news articles, company websites, business filings, property tax records, Bureau of Conveyances records, the Hawai‘i Information Service’s tax map key database, and PitchBook, a capital markets research company. These searches may not have captured all private equity-owned hotels.

Hawaii Business Magazine’s goal was to determine the extent of private equity’s presence in Hawai‘i’s hotel industry and how that presence has impacted their employees and the surrounding communities.

Ian and Shay Chan Hodges are community organizers on Maui who have worked for over 20 years to integrate environmental care, social responsibility and good governance into investment policies and practices. They say more awareness is needed about private equity’s presence in the Islands.

“There’s this huge sort of hole in our information about people who are coming in here and understanding, you know, what their motivations are,” Shay Chan Hodges says. Her and her husband’s concern is that private equity’s profits will always take precedence over impacts to local workers and communities.

Nationally, private equity-owned businesses employ about 12 million people, according to the American Investment Council. Justin Flores, director of labor and jobs at the Private Equity Stakeholder Project, says that number has grown from about 8 million a decade ago, and many of those workers do not know they’re working for private equity-owned companies. PESP is a nonprofit financial watchdog organization that researches and reports on private equity investments and their impacts.

“Private equity claims that their model is to buy low, make improvements in operations and then have a more valuable asset at the end of their ownership period,” says Alyssa Giachino, director of investment engagement at PESP. “They don’t always achieve that. Sometimes they degrade the quality of the asset because of their thirst for quick profits.”

She adds: “But that doesn’t mean there aren’t examples … where they may have invested into property improvements that would allow them to charge higher rates, and that helps stabilize the cash flow for them, so they do end up with a more valuable asset. Investing in the workforce is another way to accomplish that benefit.” Giachino previously researched private equity and helped organize hotel workers when she worked for the Unite Here union on the mainland.

The 33 properties include hotels that private equity owns directly, through local subsidiaries or as part of ownership groups. These numbers are only for properties classified as hotels in the Hawai‘i Tourism Authority’s 2022 Visitor Plant Inventory. While some hotel properties may have timeshare, condo-hotel or vacation rental units, only their hotel units are included in our count. In some cases, Hawaii Business Magazine updated the number of hotel units and added properties that were not in the 2022 inventory. I did not include military hotels, timeshare properties or condo-hotels in my research, though this list does include four Lahaina properties that were damaged in the August wildfire.

Multi-Decade Presence

Big private equity firms based outside Hawai‘i have owned local hotels since the 1990s. They entered the local market as Japanese companies sold their investments, says Kevin Aucello, principal of Powell & Aucello, a hospitality real estate consulting and brokerage firm.

One early player was Colony Capital, which acquired what’s now the Hilton Waikoloa Village in 1993 with Hong Kong-based PanGlobal Partners and Hilton Hotels. In 1998, Oaktree Capital Management acquired an interest in Turtle Bay Resort, local firm Trinity Investments acquired majority ownership of what’s now the Fairmont Kea Lani with Apollo Group and the Goldman Sachs Whitehall Fund, and KSL Recreation Corp., a subsidiary of KKR, acquired the Grand Wailea. KKR is famous for popularizing the leveraged buyout model in the 1970s and 1980s, and KSL Capital Partners grew out of KSL Recreation Corp.

Under Oaktree, Turtle Bay Resort faced labor disputes, and community opposition when it wanted to build 3,500 additional hotel and residential units. The property was deeded to a consortium of investment firms to avert foreclosure. At the time, it was one of more than a dozen hotels in distress, according to a 2011 Hawaii Business Magazine article.

Various private equity firms have come and gone in the decades since. Sometimes, private equity acquires foreclosed or distressed hotels. That’s what happened to the now-demolished Mākena Beach & Golf Resort and former Sheraton Kona Resort & Spa Keauhou Bay, now an Outrigger resort. But, often, it just depends on the market and what’s available.

Honolulu’s Kobayashi family has been investing in hotels for over 20 years. In 2009, BlackSand Capital was created to do that work on behalf of the family and other investors in the form of a private equity fund, says BJ Kobayashi, chairman and CEO of BlackSand Capital. And 80% of its investors are based in Hawai‘i.

“I really do think it makes a difference that if we make a dollar, if 80 cents stay in Hawai‘i, that’s just different than if you have a company that’s private equity that the investors are outside of Hawai‘i,” he says.

It currently co-owns the Royal Lahaina Resort and Twin Fin with Rockpoint, a Boston private equity firm with $14 billion in assets under management, and Highgate, a hospitality management and investment company. BlackSand also co-owns the Kaimana Beach Hotel with Tsukada Global Holdings, a public company in Japan. BlackSand says it looks for hotels with good locations in submarkets with high barriers to entry. It also looks for hotels to which it can add value.

Trinity Investments, another locally based private equity company, takes a similar approach. It has owned, often with mainland private equity firms, the Ritz-Carlton Kapalua, Kahala Hotel and Mākena Beach & Golf Resort. It currently co-owns the Westin Maui Resort & Spa in Kā‘anapali with Oaktree, a firm with $183 billion in assets under management. Greg Dickhens, Trinity’s principal and managing partner, says the firm tends to reposition its hotels as more upscale destinations through physical improvements to the property, bringing in top-tier management and, sometimes, rebranding. Trinity also invests in hotels in the U.S., Mexico and Europe and manages about $5 billion or $6 billion in assets, Dickhens says.

In some cases, mainland-based private equity giants have gained control of hotels through the local companies that run them. Cerberus Capital Management, for example, had ownership stakes in the Japan-based parent companies of Honolulu’s Kyo-ya Hotels & Resorts and Prince Hotels & Resorts from the mid-2000s to the mid-2010s. In Hawai‘i, the two local hotel companies once owned eight hotels on three islands.

Blackstone owned or managed a handful of Hawai‘i Hilton hotels when it owned the Hilton Hotels Corporation from 2007 to 2018. In 2016, Denver’s KSL Capital Partners acquired Outrigger Resorts & Hotels, which operated, owned or managed 37 hotels in Hawai‘i, Guam, Fiji, Thailand, Mauritius and the Maldives. Outrigger had been owned and operated by the Kelley family since 1947. According to PitchBook, KSL is the most active private equity hotel investor in the U.S.; in the last five years, it made 26 investments.

Hawai‘i continues to be attractive for private equity buyers because it’s one of the highest performing hotel markets in the country, says Tim Powell, principal of Powell & Aucello. A big allure: It’s unlikely that new hotels – and thus new competition – will be built due to strict zoning regulations.

Ben Rafter, a hotel owner and president and CEO of hotel operator Springboard Hospitality, says that many of the large private equity firms are looking to write checks for $100 million or more to buy properties, and Hawai‘i is one of the few markets where they can do that.

In the last two years, Outrigger acquired four properties in Hawai‘i and four in Thailand and the Maldives. Those include the 18-room Plantation Inn that was destroyed in the Lahaina fire and the 350-room condo-hotel Kaua‘i Beach Resort & Spa. An Outrigger spokeswoman says Outrigger manages the Kaua‘i Beach Resort as a traditional hotel and owns most of the units, but she could not provide specifics on unit counts. David Carey, the longtime CEO of Outrigger until its sale by the Kelley family, says that thanks to KSL’s ownership, Hawai‘i-based Outrigger is expanding in the way he always dreamed.

“When we were buying and selling hotels, the average price of those hotels were somewhere between $25 (million) and $125 million a property,” he says. “Now, if you look at hotel prices, it starts $200 million and up, $200 million, $400 million. So that’s more capital than a small family business could put in.”

Hotels Become More Upscale

In 2021, the Westin Maui Resort & Spa debuted the jewel of its three-year, $120 million property-wide transformation: its 217-room Hōkūpa‘a tower, named for the North Star.

It’s the first and only hotel-within-a-hotel concept in Kā‘anapali, says GM Josh Hargrove. The rooms have wood floors and modern furniture and designs that evoke the sand and sea of Kā‘anapali Beach. Guests who stay there have perks that other hotel guests don’t, like access to the tower’s second-floor club, The Lānai at Hōkūpa‘a, where they can swim in an infinity edge pool, enjoy cocktails made by a certified mixologist and attend exclusive Hawaiian cultural activities.

Hargrove says the Westin increased its Hōkūpa‘a tower nightly rates by about 80% after it was renovated. That attracts visitors with more money to spend in the surrounding community and leads to higher employment levels due to the elite service required.

“All the other businesses that come after and then rely on tourism thrive when you have an increase in customer or visitor spend and discretionary income,” he says. “It’s not only the renovations. All of the aftermath of that just lasts for years or decades, as we make sure this world-class destination competes with the best of the best all around the world.”

The Westin Maui, which was built in 1971, is undergoing a $30 million renovation, expected to be complete in early 2024. That project includes a transformation of its Ocean Tower rooms and the creation of a social entertainment space with Topgolf swing suites, bowling, virtual reality games and a bar.

Hawai‘i hotels have completed more than $2 billion in improvements since 2019, Vieira says. Significant investments like that are needed if hotels here are to compete on a global luxury level, he says.

“Why private equity has been so good for Hawai‘i is when they come in and buy something, they don’t plan to sit on it for seven years and then sell it with maybe more profit,” he says. “They go in and they go, ‘What can be done to reposition and rebrand, upgrade, create a luxury tower?’ Then in generally seven or eight years, they’ll sell it to the next private equity firm, which will do the same thing. What this has done for Hawai‘i is it has created significant investments.”

Dickhens was the president of Kyo-ya Hotels & Resorts during the Cerberus era. He says Kyo-ya invested over $350 million to reposition its Sheraton Waikīkī, Moana Surfrider and Royal Hawaiian properties, which hadn’t seen significant capital investments in a while. The Prince Waikiki also completed major upgrades in 2017, just as Cerberus fully exited from Seibu Holdings. Dickhens was VP of Prince Resorts from 2014 to 2016.

Outrigger Resorts & Hotels has made major reinvestments, too, in the years since it was acquired by private equity company KSL. Jeff Wagoner, president and CEO of the Honolulu-based company, says the company has infused over $300 million into its properties.

That includes an $80 million renovation at the Outrigger Reef Waikīkī Beach Resort. The project paid tribute to the area’s voyaging past and included transformed guest rooms, the Kani Ka Pila Grille and open-air Herb Kāne Lounge. It also created a permanent Hawaiian cultural center. Kaipo Ho, Outrigger Hospitality Group’s former director of cultural experiences, says the Reef’s renovations showcase a huge leap in Outrigger’s longstanding commitment to Hawaiian culture. He helped Outrigger create its values-based corporate culture in the ‘90s and assisted employees through the transition to KSL. He retired in 2020 after 27 years with the company.

Illustration: Kalany Omengkar

Renovations of the Outrigger Kona Resort & Spa and ‘Ohana Waikīkī East are expected to be complete in 2024. And the newly acquired Kā‘anapali and Kaua‘i resort properties will undergo complete renovations in the coming years, Wagoner says.

The Grand Wailea already unveiled new dining concepts and its updated exclusive Napua tower. Kalei ʻUwēkoʻolani, cultural programming manager and leadership educator, says the resort’s new Kilolani Spa, which will open in 2024, will offer signature treatments and programming inspired by the Hawaiian lunar calendar and traditional Hawaiian wellness practices. And the Humuhumunukunukuāpuaʻa restaurant will also incorporate culture into the dishes, such as through ingredients, the way they’re served or how they look.

The resort wants to add 151 new guest rooms and make other enhancements, too, but those efforts are still in limbo as the project goes through a contested case hearing at the Maui Planning Commission.

Several of the private equity owners used loans to fund their renovations. For example, BlackSand Capital took out a $240 million loan when it acquired the 27-acre, 500-room Royal Lahaina Resort, which was not touched by the fire. Some of that loan is being used for a “much-needed” renovation of the lobby, retail, and food and beverage areas, along with upgrades to the resort’s 122 villas, Kobayashi says.

Powell and Aucello say that it’s more common for an existing hotel owner to pay for renovations using funds from their replacement reserves, rather than get another loan. Other times, an owner will refinance their property and do a renovation as part of that process.

Bottom-Line Focus

Located on 40 acres in South Maui, the Grand Wailea was built in 1991. Developer Takeshi Sekiguchi spent $600 million on the 787-room hotel, which included $30 million worth of fine artwork, an entry waterfall, expansive gardens and a 2,000-foot-long pool with slides and rapids.

In 1998, the hotel underwent financial restructuring and was sold to an affiliate of investment company Credit Suisse First Boston. Five months later, it was picked up by KSL Recreation Corp.

Former state Rep. Tina Wildberger worked there in the late ’90s in food and beverage. She says under Sekiguchi, taking care of guests and employees was emphasized. But under KSL, the focus shifted to numbers.

“KSL came in hard and started threatening people” who weren’t working the number of hours that it expected them to, she says. “I’ll never forget the number 1,560. They came in and were threatening if you don’t have 1,560 hours in annual that you worked, you’re getting your benefits dropped, your job is in jeopardy.”

Others also describe how things changed at hotels where they worked after private equity took ownership. On a Friday afternoon, Renee Minshall, a worker at the Hilton Hawaiian Village, proudly says she worked at the property when it was owned by the Hilton Hotel Corp. She says those were the “good old days” and fondly describes seeing guests’ babies grow up and get married as families returned again and again.

“We were empowered to go above and beyond for our guests, and do whatever it took to make them happy,” she says. “And we kind of don’t really have that anymore. It’s been lost in the shuffle of all the changes and cutbacks and stuff.”

The changes began after Blackstone acquired Hilton for $26 billion in 2007, Minshall says. Shortly after, a company came in to monitor and evaluate employees’ movements. She later learned they were trying to identify redundancies, and if employees had too much downtime because of the redundancies. She vividly remembers, with tears in her eyes, HR telling her that her position was cut. She ended up interviewing at other companies, but because she was already older, she says, no one wanted to hire her. The union was eventually able to restore her job. When she lost her job, Minshall had just returned to the property after a handful of years living on another island. Before that move, she had worked at the Hilton Hawaiian Village for 12 years.

“It still bothers me until this day that that happened to me,” she says. “You know, and all the years of service I put in, and that’s how they treated me. And they had like, no value for me even though I valued everything I did every day.”

She now works in the bell department, which helps guests with luggage and provides other services, and has moved up in seniority, but she worries that a layoff could happen again. And others in her department are now suffering the ramifications of owners focusing on profits over people and guest service, she says.

The Hilton Hawaiian Village is currently owned by Park Hotels & Resorts, a public lodging real estate investment trust, or REIT, spun out from Hilton Worldwide Holdings. REITs, like private equity firms, aim to generate income for investors but are different in that they must pay at least 90% of their taxable incomes in the form of shareholder dividends each year and are open to individual investors, rather than only institutions or accredited investors. About 7% of Hawai‘i’s hotels are owned by REITs.

Minshall says the number of workers in her department is down 40% since Covid. The property sometimes sees 800 to 900 check-ins a day, so her team is constantly moving across the 22-acre property. When we spoke in early December, her team, made up entirely of full-timers, was struggling with shifts being cut from eight hours a day to five or even four. Employees must work 20 hours a week to maintain their health benefits, so they were barely making the cut some weeks.

Current and former workers at the Turtle Bay Resort and Grand Wailea, owned by Blackstone since 2017 and 2018, respectively, say they’ve been doing more work with fewer staff members. The employees I spoke with – all but one had 10 or more years with their hotels – asked that the magazine not use their names. Some of those who still work at the hotels feared retaliation; others who’ve moved on to new jobs didn’t want to risk their relationships with their new employers.

Some of the Grand Wailea workers say they’re so overwhelmed with their workloads that it’s impacting the cleanliness of the hotel and the speed with which they can respond to guests’ requests. It’s also taking tolls on them physically. One says she has back pain and has hurt herself from having to work fast enough to keep up with everything that needs to be done.

Illustration: Kalany Omengkar

In other cases, some with lower seniority aren’t getting enough hours to maintain their health insurance. One worker says he got so few shifts that he didn’t make enough hours to keep on as a full-timer and lost his health insurance. He’s since had to stretch his medications to compensate.

“I’m totally understanding this is about making money,” he says. “But you cannot mistreat people that you used to make that money. To me, they look at us as just not human beings.”

Workers at both the Grand Wailea and Turtle Bay say they love their jobs but it feels like they’re being pushed out, particularly longtime employees who know the properties and cultures best. And, like the Hilton Hawaiian Village worker, they say the tools they need to express Hawai‘i’s aloha spirit to customers have been taken away, along with the time it takes to do that.

“I think my whole takeaway from this whole thing is what’s sad about Turtle Bay is that it’s not like how it was before,” says a former worker. “Like it really isn’t. The Turtle Bay when I first started, I loved. Everything was about guest experience. Now it’s not.”

That worker adds that returning guests told her that they felt the resort’s aloha spirit felt forced and that everything was about money.

The Grand Wailea, one of Maui’s largest private employers, is part of a class action lawsuit filed by nonunionized spa workers who allege that hotel operator Waldorf Astoria and owner Blackstone “willfully” misclassified them as independent contractors to avoid pay and benefits. There were 115 named plaintiffs as of mid-December, according to Brittany Harmssen, lead-counsel for the plaintiffs.

She says the median tenure of the plaintiffs is 15 years, though many have been with the property since its original owner, which “speaks to their vulnerability and the ability of the hotel to exploit them, essentially.” She adds that many plaintiffs have told her that the resort’s original owner provided some of the best working conditions and that conditions have worsened since.

And some of the issues they faced seemed to originate under Blackstone, she says. For example, spa workers haven’t received their full tips because the hotel takes a percentage of the mandatory 20% gratuity charged to spa clients. They also have also not been paid for providing free services, at the direction of the hotel, to hotel employees and VIP clients. According to Hawai‘i U.S. District Court records, the court cancelled a settlement conference that was scheduled for early December.

A spokesperson for the Grand Wailea wrote in an emailed statement: “While we believe this case is without merit, Grand Wailea cares deeply about our workforce and we remain committed to being a best-in-class employer.”

Larger Picture

Eric Gill, the former head of Unite Here Local 5, which represents hospitality and health care workers in Hawai‘i, says the perceived increased focus on profits over operations and employees is a result of more properties being controlled by real estate companies, rather than hoteliers.

Unite Here Local 5 says it has about 1,400 fewer hotel union members now than in 2019. The International Longshore and Warehouse Union says it’s down by about 2,000 hotel members. At the same time, Hawai‘i hotels are charging higher average room rates and dealing with lower average occupancy rates. Up until October, except for August, hotels statewide each month in 2023 had average daily room rates that were 30% to 40% higher than the same time in 2019. Statewide revenue per available room was 20% to 32% higher, according to Hawai‘i Hotel Performance Reports compiled by the Hawai‘i Tourism Authority. Meanwhile, occupancy rates ranged from 72% to 77%. In 2019, occupancy rates ranged from 78% to 85%.

“Our (total) work hours have improved but the total amount of jobs have not returned,” says Cade Watanabe, financial secretary-treasurer of Local 5. “So that means that not only are the owners reaping the huge benefit from a higher room rate, but they’re reaping the benefit from understaffing our jobs.”

Gill says that Hawai‘i needs a tourism industry that its people will support and feel good about. And that can’t happen when there are fewer jobs yet more tourists putting more pressure on local communities, he says. Visitor arrivals are expected to increase to over 10 million after 2024, according to the state Department of Business, Economic Development and Tourism’s third quarter economic outlook.

“We’re getting shortchanged here. And I think (in) the long-term, this is something these corporate entities aren’t going to attend to no matter what they say,” Gill says.

He explains the implicit social contract behind Hawai‘i’s hotel industry: “We gave them our beaches, so they’d provide the jobs. They shouldn’t get to keep the beach and eliminate the jobs, which are the benefit that we get from them operating in our island.”

Illustration: Kalany Omengkar

In an emailed statement, Blackstone wrote that staffing at Turtle Bay Resort has increased by 10% post-Covid and that it anticipates adding new jobs at the Grand Wailea once its spa reopens in 2024.

“Blackstone has invested more than $650 million to ensure our Hawai‘i hotel properties remain iconic destinations and top employers for generations to come, and we are proud that these investments have created more than 1,300 local jobs,” the firm wrote.

“During our ownership, the average compensation for employees across our hotel properties has grown by nearly 25%, we have supported more than 700 local businesses in the past year alone and, together with our portfolio companies, have donated millions of dollars to the community, including $1.5 million in response to the recent devastating Maui wildfires. We look forward to investing in Hawai‘i over the long term and will continue to be a responsible steward of our properties.”

The firm added that the Grand Wailea has donated more than $5 million to nonprofits in the last seven years, and its Turtle Bay Foundation has awarded over $1 million in grants and scholarships since its inception. The Ritz-Carlton, Maui Kapalua, meanwhile, has donated more than $440,000 to nonprofits over the last five years.

Marty Leary, director of research at Unite Here, the parent of Local 5, says private equity hotel owners tend to cut costs when they have trouble exiting investments, but, in general, reducing staffing is not the primary way they try to flip their properties. Instead, their primary strategy is to reposition the hotel with higher room rates and renovations and then try to sell it at the right time in the real estate cycle. Properties that have unionized employees, for example, didn’t see too many impacts on labor costs when private equity firms took advantage of cheap credit after the financial crisis to buy and sell properties.

Maui Impacts

On a weekday afternoon in early November, Hanaka‘ōʻō Beach Park is largely empty, except for the area housing the Kahana, Nāpili and Lahaina canoe clubs.

There, 20 to 30 people gather under a green tent to organize the “Fishing for Housing” protest that began on Nov. 10 at Kā‘anapali Beach. They were prepared to stay as long as it took for the state and county to use their emergency powers to house displaced Lahaina residents, who have been shuffled around various hotels and condos since August.

Kai Nishiki, a West Maui community organizer, walks over to meet me at a picnic table. At the time, she only knew of one property that was going to renew its contract to house displaced residents after November. The Federal Emergency Management Agency reimburses hotels and condos for housing survivors but not at their full rates.

“Hotel ownership is increasingly important because whoever owns a property determines what the goals and priorities are,” Nishiki says. “And most of the time, if you aren’t from here and aren’t living here, the community’s needs aren’t the priority. The bottom line is. And that likely means more extraction and exploitation for the people who are here.”

She says the fact that over 7,000 residents have been moved around and asked to leave so that visitors can return is indicative of that: “That says profits are more important than people.”

Chris West, president of ILWU, says the aftermath of the Maui fires revealed a lot of intent and sincerity on behalf of some of the hotel owners – and lack thereof among others. He says BlackSand Capital, the Honolulu-based co-owner of the Royal Lahaina Resort, was the most helpful to members impacted by the wildfire.

“They helped us the most by far and have been the most willing to take the loss to help local families, and it’s evident,” he says. “There’s a big difference between a locally owned private equity family” and other kinds of owners. He says Blackstone also stood out for the assistance it gave ILWU members.

In an emailed statement, Blackstone wrote that its community commitment is illustrated by the more than $1.5 million in relocation relief, assistance payments and charitable donations that the firm and its portfolio companies provided to support its hotel employees and others impacted by the fire. It also helped provide thousands of meals through its Maui hotels, donated supplies, and provided laundry services and fresh linens to those in need.

“In moments like that I think it’s really, really important to take a step back and realize why we’re all here,” says Kobayashi of BlackSand Capital. “It’s not just to make investments and make money.”

*All but one property are owned by Outrigger, which is owned by KSL Capital Partners. Its properties include the 18−unit Plantation Inn, which was destroyed in the August Lahaina fire, and the 350−unit condo hotel, the Outrigger Kaua‘i Beach Resort and Spa, which it operates as a regular hotel.

Looking Ahead

Aucello and Powell say that the private equity-owned hotels are still seeing positive cash flows even if they’ve exceeded their timelines for exiting their investments. That means that they can refinance their loans and share some of the proceeds with their investors while still owning the hotel. The Westin Maui, for example, refinanced its existing $360 million loan for $515 million; that includes a $145 million cash-out for sponsors, according to CoStar, a commercial real estate analytics company.

They and other experts don’t expect to see a major change in the types of buyers that have been purchasing Hawai‘i hotels over the last five or 10 years: Private equity firms, for the most part, will continue to sell their larger properties to other private equity firms or to REITs.

“You’ve got to be dedicated and want to get into this market,” says Mark D. Bratton, senior VP of Colliers Hawai‘i. “It’s not inexpensive, it’s not for the faint of heart, it’s not fast money. It’s long-term, it’s a very limited supply of what you can get.”

Dickhens of Trinity Investments says hotel owners in Kā‘anapali and Wailea are generally large institutional investors who hold their properties for a long time, and they’ll continue with that strategy despite the Lahaina fire. He adds that while private equity firms might be required to sell due to the life of their funds, there are ways they can recapitalize and stay in a project under a different ownership form.

Rafter says the market will continue to consolidate. That means investments will continue to get bigger and the pool of investors will continue to shrink. It also means there will be fewer people like him investing in smaller hotels with short ground leases.

Leaders at Unite Here Local 5 and the ILWU say that 2024 will be a big year for hotel contract negotiations. They say they’ll fight to increase worker wages and address increased workloads.

In Southern California, thousands of Unite Here Local 11 hospitality workers have been striking on and off since summer after 60 hotel contracts expired. They’ve been demanding better wages – ones that keep up with the rising cost of living – plus improvements to their health and retirement benefits. As of mid-December, the California union had reached tentative agreements with 10 hotels.

“I’ll be honest, I don’t care who owns it, I just care if you’re paying our workers living wages,” says West of ILWU. “That for me, that’s what it’s more about. …As a whole, the tourism industry has definitely changed and has shifted more towards profit margins than necessarily (visitor) experiences.”

Both Local 5 and ILWU have been able to negotiate with private equity owners. About 40% of the private equity-owned hotels have union employees. The boutique Hyatt Centric Waikiki Beach is owned by KKR, a private equity firm that manages $528 billion in assets, and has been a union property since 2018.

Local 5 recently negotiated a new six-year contract that will bring Hyatt Centric workers’ pay up to the union’s standard, says Anson Leaeno, who has worked at the property since it opened in late 2016. The contract also provided severance pay to food and beverage workers impacted by the property’s restaurant closure. Leaeno says he’s enjoyed working in the hotel’s housekeeping department and is paid well.

Minshall, the Hilton Hawaiian Village worker, says it shouldn’t matter who owns a hotel, but there’s a disconnect between a hotelier, like the old Hilton Hotels Corp., and an investment company.

“They’re only investing for their shareholders and to make money, right? They’re not making us happy,” she says. “They’re making their pockets happy and bigger and bigger and bigger every year. And we know the numbers, right? I’m sharing the numbers of my people now and making them aware of what’s going on. And now they’re aware, now they’re more willing to speak up for their rights. Now? Yeah, because we’re the ones that run the hotel. We’re the ones that work.”

The reporting of this story was supported by the Poynter Institute through a grant from the Omidyar Network. The two organizations had no role in the reporting or editing of this story.

The private equity-owned properties (teal place markers) in this map include hotels that private equity firms own directly, through local subsidiaries or as part of ownership groups.

The Kapalama container terminal, located on the site of an old army storage area, adds 86 acres to the port of Honolulu. It will be much-needed space for Pasha Hawaii’s cargo operations, which are now crammed into half that acreage on Sand Island. Matson will take over Pasha’s old terminal, extending its current footprint by 44 acres.

But the benefits of this new facility go beyond the extra room for moving containers and roll-on/rolloff cargo such as cars. The new terminal is also far more resilient against sea-level rise and natural disasters than the dozens of piers stretching from Kaka‘ako to Ke‘ehi Lagoon.

A heavy, 20-foot-deep slab of concrete now covers much of the new terminal’s massive yard, which rises 3 feet higher than the rest of the harbor. All told, it’s about 11 ½ feet above sea level at its highest point, creating a buffer from the rising ocean and any damaging storm surge.

On the ground near the water’s edge, hundreds of giant, interlocking beams are stored. They’ll soon be used to build a retaining wall that stabilizes the shoreline of the new terminal – an improvement from the aging Sand Island terminals on the opposite side of the channel.

Those older piers are “built like a deck on a house,” with heavy erosion under the waterline, says Randy Grune, managing director of Hawaii Stevedores. The organization, a subsidiary of The Pasha Group, employs 260 people across Hawai‘i’s harbor system to load and unload cargo.

On a visit in August, construction workers with Kiewit were driving holes into the ground near the bridge to Sand Island, where inserted stone columns will act as “anti-liquefaction in the event of an earthquake,” says Grune. High-intensity vibrations can cause sand to turn to liquid, and the ground at the new terminal includes dredged sand and clays stacked on top of coral rock and limestone.

Solar panels line the roofs of the terminal’s new administrative building, with more panels to come, and five electric gantry cranes will soon harness wind energy using micro-fans that birds can’t enter. The cranes also generate their own electricity with each up-and-down motion.

The site’s renewable energy will be stored in batteries, which allows the terminal to run for “two shifts,” or about 16 hours, says Grune. Rows of electric chargers on the ground can also operate on stored energy, keeping refrigerated containers cool if the power grid fails.

“Technically, the facility is state of the art,” he says. Many of the green-energy features are funded with a $47.3 million grant from the U.S. Department of Transportation’s Port Infrastructure Development Program. The Pasha Group and Hawaii Stevedores contributed an additional $92 million. The final cost of the new terminal is estimated at $555 million.

Grune has been waiting for this terminal to be built since the early 1990s, when the U.S. Army, which built the Kapālama Military Reservation at the start of World War II and packed it with wooden storage sheds, made its third and final transfer of land to the state.

The idea to take over the Army site was conceived as far back as the 1980s, and more formal plans were mapped out in 1997. In the years since, repeated efforts to expand and upgrade this section of the harbor have inched forward and stalled.

Grune says he won’t retire until it’s done. The completion date is scheduled for the first half of 2025.

A view of the Matson container terminal on Sand Island. When Pasha Hawaii moves to the new Kapālama Container Terminal, Matson will expand into the area that Pasha will vacate | Photo: Aaron Yoshino

A New Harbor Leader

On the top floor of the state Department of Transportation’s Harbors Division offices, near Aloha Tower, Deputy Director Dreana Kalili’s office overlooks the widest section of the harbor, with views of Sand Island on the other side.

Honolulu Harbor is small compared to many others, with narrow passages and a single point of entry and exit. Container ships share the waterway with barges, tugboats, cruise ships, and fishing and charter boats.

It’s a busy port. The U.S. Army Corps of Engineers’ Waterborne Commerce Statistics Center says that 14.7 million tons of cargo moved through Honolulu in 2021, putting it 38th among the 155 principal ports nationwide. (State statistics report lower figures.)

Most of that cargo moves via smaller container ships measuring 2,500 to 3,500 TEU, or twenty-foot equivalent units. For comparison, the world’s largest container ships are in the 20,000 TEU range – nearly six times bigger than the ones seen cutting past Lē‘ahi (Diamond Head) on their trans-Pacific journey to and from the West Coast ports, and to points farther afield.

Kalili stepped into her new job at the end of 2022 as an appointee of Gov. Josh Green, and she brings years of experience with state and city transportation offices. The Harbors Division oversees and maintains 10 ports on six islands.

Her first and most urgent task was an inherited one: Finish the Kapālama terminal by January 2024. Reality set in when live corals, which are protected by the Clean Water Act, were discovered near the piers and had to be moved. Then, a water line connecting the terminal to Sand Island didn’t work as planned and had to be reconstructed.

Delays plagued the project before her arrival as well. The Harbors Division spent years moving tenants from the former military area, which often involved finding somewhere for them to go and then building or renovating their new locations. For instance, a $17 million renovation of Pier 35, near the “fishing village,” was required before the UH Marine Center could move its scientific vessels and operations there in 2016.

“I will move heaven and earth to get this done right,” says Kalili of the new Kapālama Container Terminal, as well as a larger plan to strengthen much of the rest of the harbor’s aging, brittle infrastructure. “The terminal is the cornerstone of the harbor’s modernization plan … and since it’s a hub-and-spoke system, the hub has got to work.”

About 85% of everything that Hawai‘i uses is imported, including food, consumer goods, cars and construction material. And 91% of that comes through the state’s harbors, according to April 2023 statistics from the state Department of Transportation.

And nearly all of that 91% comes through Honolulu Harbor first, with the exception of crude oil that enters through an offshore mooring, according to data from research firm SMS Hawai‘i. From Honolulu Harbor, about 20% of those imported goods are transferred to the Young Brothers’ interisland terminal at piers 39 and 40 for transport by barge to the Neighbor Islands.

If the advantage of that system is efficiency, the disadvantage is increased vulnerability. Hawai‘i is more than 2,550 miles away from the next major port, in Long Beach, California. Honolulu’s port cannot fail.

Yet O‘ahu’s southern shoreline is mostly open coast vulnerable to multiple threats: hurricanes, tsunamis, earthquakes and impending sea-level rise. In 2017, the Hawai‘i Climate Change Mitigation and Adaptation Commission recommended the state prepare for 3.2 feet of sea-level rise arriving as early as 2060. That projection could go higher if glacier melting and ocean heating accelerates.

As head of harbors, Kalili is responsible for making Honolulu Harbor strong enough to withstand rising waters and other potential disasters. The weight of that is so heavy, she says with a slight laugh, that it can make her want to crawl into bed and take a very long nap.

Big Challenges With No Roadmap

For resiliency ideas, the project’s sole guide is the Honolulu Harbor 2050 Master Plan. The plan, which was created with input from a wide cross-section of stakeholders and released in 2022, makes it clear that sea-level rise and climate change need to be factors in any modernization.

That Honolulu even has a plan puts it far ahead of most ports in the U.S. By 2021, only 10 of about 300 ports had gone through a resiliency planning process, according to one report. Honolulu’s process was well underway in 2021.

But the master plan can be short on specifics. Infrastructure needs to “accommodate” climate change, embrace “flexible design” and be “adaptive” to changing conditions, such as storm surge and flooding from intense rainfalls. Possibilities include raising piers, strengthening yard pavement, installing wave-dampening sea walls and a host of other measures – all adding up to a rough estimate of about $50 billion when finished in 2050.

Currently, the Harbors Division is self-funded, explains Kalili. Operating expenses and capital improvements are paid for with harbor user fees that are levied when a boat enters the harbor, when it docks, when cargo is offloaded. The money goes into a special fund that’s overseen by the state Legislature.

Before Kalili can move forward with a costly and complex plan, she says she needs a scientific assessment of how rising oceans can affect the nooks, crannies and wide open expanses of the harbor system. She has applied for $3 million in federal money to develop a site-specific “resilience improvement plan” that analyzes what the projections really mean.

“All of these sea-level rise maps just tell me that I might have a problem here,” she says, pointing to a thick line of blue on a map of the harbor. “But there’s no study, there’s no literature that tells me that at this pier, you must do this. Or at this other pier, if you don’t do sheet piles, you can’t move cargo.”

At the end of the process, Kalili hopes to have a detailed plan for 10 priority projects, for which she can then apply for federal infrastructure funding. She expects the most important projects will focus on updating Matson’s soon-to-be expanded Sand Island terminal and increasing the size of Young Brothers’ interisland terminal.

Through this initial process, she’s getting the shipping companies to think far into the future. “In the conversation I’m having with Matson now, we’re planning for 2100,” she says. “What should this terminal look like in 2100? And what do we build in 2023?”

Sea-level rise presents so many variables and unknowns, she says: Will the container ships still make it into the port? Will the cranes be serviceable? Exactly how high should piers be elevated? Will higher piers create runoff into surrounding neighborhoods? How will stormwater drain? Can trucks safely make their way downhill from the piers to the low-lying roads?

And the biggest question of all: “Are these harbors still going to be working?”

Cleaner Fuels for Shipping

While Hawai‘i’s shipping companies help pay for harbor improvements, they take a background role in infrastructure decisions and build-out.

But both internationally and locally, the maritime industry is actively working to reduce its dependence on fossil fuels, and thus reduce its contribution to climate change and sea-level rise. The International Maritime Organization recently set a target of reaching net-zero emissions by “close to” 2050. Shorter-term goals include a 20% reduction in emissions by 2030.

There’s still a long way to go. A recent report from the Global Maritime Forum and other organizations found that 95% of ships are still powered by petroleum products, such as heavy fuel oil, marine gas oil and marine diesel oil.

Hawai‘i’s largest shipping companies are doing better than that. Matson is converting four ships on its Hawai‘i lines to run on cleaner-burning liquified natural gas, and it has commissioned the building of three new cargo ships that are LNG-ready.

At The Pasha Group, Kai Martin, VP for strategic programs, says the company is already operating two new LNG-powered vessels that far exceed international guidelines.

LNG fuel releases 25% less greenhouse-gas emissions than traditional ship fuel, says Martin. In addition, nitrogen oxides are reduced by 90% by using an exhaust gas recirculation system in the main engines. The underwater hulls are “hydrodynamically optimized” to require less energy.

“But the most significant and immediate positive impact is in the reduction of pollutants, especially in the port communities,” he says. “Sulfur oxide, which creates acid rain, is reduced by 99.9%. Particulate matter, which is responsible for respiratory disease, is reduced by 99.9%.”

Martin says that at this stage in the energy transition, the cleanest “green methanol” fuels aren’t yet feasible for Pasha’s fleet. Its vessels are too small to store the amount of fuel needed to power them, and too removed from the limited supply sources. But the company’s environmental commitment is strong, he says.

“Pasha is leaning forward in the transition of the transportation sector to cleaner operations, on the water, in terminals and over the road,” says Martin.

At the new Kapālama Container Terminal, for instance, containers arriving from the West Coast and designated for the Neighbor Islands will be transported to the interisland terminal over water. Randy Grune of Hawaii Stevedores estimates that will take 50,000 truckloads a year off Nimitz Highway, which is “better environmentally, less of a nuisance and more efficient.”

Imagining the Worst

While most goods come to the Islands via ship, the port is just the point of entry. The supply chain extends farther, to a network of roads, distribution centers and even communications systems.

Isolated islands are especially vulnerable to supply chain failures after disasters, says Karl Kim, Ph.D., a professor of urban and regional planning at UH Mānoa and director of the Disaster Management and Humanitarian Assistance graduate program. He’s also the executive director of the National Disaster Preparedness Training Center and has conducted damage assessments and debris management across the globe.

For Hawai‘i, a relevant example is Puerto Rico. Kim studied the infrastructure breakdown after Hurricane Maria’s powerful winds leveled much of the island and rain flooded communities in 2017. The ports, roads, power and communications fell apart, leaving the island chain in crisis for months.

Those same conditions exist in Hawai‘i, he says. Roads could flood from storm surge, soon to be exacerbated by sea-level rise. The airport could be underwater. Links to other states via rail or superhighway don’t exist. And the closest ports in California are farther away than the one that Puerto Rico depends on, in Jacksonville, Florida.

But maybe worse of all is that Hawai‘i doesn’t have a stockpile of food and water. The operations plan of the Hawai‘i Emergency Management Agency says the state only has five to seven days of emergency supplies.

Hawai‘i’s “just-in-time” logistics system requires 14 days for goods shipped from the continental U.S. to make their way to store shelves, says the HI-EMA operations plan. When ships continue their regular sailings and trucks make regular runs, everything is fine. The Costcos and Foodlands across the Islands continually restock with fresh infusions of goods.

But their shelves and on-site storage areas are also where nearly all of the “five to seven days of food supply” is located. A disaster would immediately disrupt the supply chain and put people in peril.

“From my perspective, islands in particular need to rethink just-in-time supply chains,” says Kim. He advocates for “resiliency hubs” located across the islands. They could house emergency food and water, and provide electricity for charging devices and cellphone service.

Because an island’s resilience depends on the resilience of ports and supply chains, “we should invest more in terms of disaster logistics,” warns Kim.

One of the worst disasters facing Honolulu Harbor is a scenario similar to when Hurricane Iniki hit Kaua‘i in 1992, says Kwok Fai Cheung, Ph.D., P.E., a professor at UH  Mānoa’s  Department of Ocean and Resources Engineering. He has spent years studying how waves, currents and storm surge interact to impact shorelines.

Here’s what could happen: A Category 4 hurricane makes landfall around ‘Ewa, on O‘ahu, when the tides are high. In the northern hemisphere, hurricane winds move in a counter-clockwise direction, so the strongest winds would lash more urban areas to the east, such as Honolulu Harbor, says Cheung.

Winds would be a factor in the flooding, but not the only ones. Hurricanes are low-pressure systems that lift the ocean’s surface water by up to 3 or 4 feet. That water moves under the hurricane, increasing the water level of the ocean. Winds blowing toward the shore push the water up further, while offshore waves of 30 to 40 feet intensify the storm surge.

Over several hours, the result would be extensive flooding across the low-lying urban coastline of Honolulu. Sea-level rise would compound the impacts and make the event even worse as “a thicker water layer allows larger waves to reach the shore,” says Cheung.

About 85% of everything Hawai‘i uses is imported, and most of it first enters through Honolulu Harbor’s main channel, seen here. Aloha Tower appears in the center-left distance, with Sand Island Recreation Area at left. On the right is the Fort Armstrong Terminal, which handles cruise ships and foreign cargo. | Photo: Marchello74 / iStock via Getty Image

Where Are the Big Ideas?

Cheung says worst-case scenarios are great for emergency preparedness, and the one he lays out has a 0.1% chance of happening every year. “But for engineering design, you have to look at the probability of an event occurring and the cost of designing for it,” he says.

He doesn’t think many of the big, ambitious coastal infrastructure projects happening elsewhere in the world  – often erected after widespread destruction and loss of life from flooding – are feasible in Honolulu, where the coastline is exposed to open ocean.

Many port cities lie inland, linked to the sea by rivers and waterways. Venice, for example, installed a series of barriers to protect it from flooding during exceptionally high winter tides. Rotterdam in the Netherlands has installed an immense storm-surge barrier where a main waterway meets the North Sea. And in the swamplands around New Orleans, a 130-mile ring of floodgates and strengthened levees – the “Great Wall of Louisiana” – was completed in 2022.

In Honolulu, the U.S. Army Corps of Engineers has been studying the feasibility of a lock-and-dam system to protect the harbor. Kalili of the Harbors Division thinks the idea has been ruled out, though a proposal to create a second harbor entrance/exit by elevating the Sand Island bridge, or replacing it with a drawbridge, is still being investigated. The Army Corps of Engineers did not reply to email inquiries.

In reporting this story, Hawaii Business Magazine also reached out to shipping companies, the Honolulu Harbor Users Group, a civil engineering firm, coastal specialists, a maritime consultancy, emergency management leaders and others. Most never replied; others said they couldn’t comment or that they didn’t know enough to assess harbor challenges and possible solutions.

Sea-level rise comes slowly, over decades, but it’s already affecting the harbor. The Honolulu Harbor 2050 Master Plan notes that many drainage outfalls in the harbor are already partially or completely submerged during high tides and king tides, resulting in drainage system backups that can cause flooding upstream. The Harbors Division’s baseyard adjacent to Sand Island Access Road and Ke‘ehi Lagoon also regularly floods during high tides and king tides – a portent of worse to come.

The problem now is finding the best solutions. As Kalili notes, Honolulu Harbor cannot fail, yet how to make it resilient is still unclear.

“When it comes to sea-level rise,” she says, “no one really knows what to do about it.”

Photo: Aaron Yoshino

Sherman Maka is part of the destination management team at Hā‘ena State Park. He helps educate visitors about the park’s history and how to be safe and respectful. | Photo: Aaron Yoshino

At 8:40 a.m., Sherman Maka, a resident of Kaua‘i’s northern moku of Halele‘a, greets 30 shuttle riders disembarking at Hā‘ena State Park.

The visitors, most dressed in hiking attire, take in views of vibrant lo‘i kalo that lead to some of the most popular beaches and trails on the island.

Maka speaks passionately to the group, even about mundane matters like the shuttle schedule. He tells them that lifeguards are on duty and to make sure they have enough water, and the times they must leave certain trail locations to make the last shuttle at 6:40 p.m.

The 62-year-old Native Hawaiian grew up living off the land and fondly recalls the days before the North Shore became a destination for tourists, multimillion-dollar properties and vacation rentals. As a young man, he never thought he’d be educating visitors on proper behaviors, but a 43-year hospitality career changed that notion.

“To encourage and educate the visitor industry on everything Hawaiian as much as we can; mālama the ‘āina; mālama the kahakai, from mountain to the sea, take care of it; respect the land: It has been fulfilling,” he says.

His role is part of a new destination management system that’s being touted as a successful community-led solution to overtourism. The 65-acre state park is the first to set a daily visitor cap, and nonresidents must make reservations and pay for entry. They also have to pay to park their own car or to ride the affiliated North Shore Shuttle from Waipā. There’s also increased law enforcement to deter illegal parking. Signs, shuttle messaging and Maka’s talks educate visitors about the area.

Those who created it say the Hā‘ena system has resulted in a more equitable relationship between tourism and the local community. Two nonprofits, Hui Maka‘āinana o Makana and the Hanalei Initiative, manage the park. Their efforts have helped Native Hawaiian lineal descendants like Maka to be part of the overtourism solution and encouraged locals to return to the park.

Joel Guy, who grew up in Hā‘ena and is the executive director of the Hanalei Initiative, says the new system has encouraged locals to visit after decades of being pushed out. | Photo: Aaron Yoshino

“You just become overwhelmed with gratitude,” says Joel Guy, who grew up in Hā‘ena and is the executive director of the Hanalei Initiative. “You’re part of a process that says early on, there were way too many people, we weren’t even going there anymore. And now people go back to Kē‘ē (Beach) who hadn’t been there in decades.”

Lessons learned from this system are being shared with hot-spot communities around the state. It’s all part of Hawai‘i’s transition to a regenerative tourism model that aims to contribute to the Islands’ cultural, natural and community well-being and repair the harm done by tens of millions of visitors over the years.

Increasing Visitors

Discussions and concerns about overtourism in Hawai‘i are not new, says Frank Haas, president of Marketing Management, a hospitality-focused consultancy. He says plans in the 1970s, when tourism became the state’s primary industry, addressed the need to manage growing visitor arrivals, which by decade’s end had reached nearly 4 million visitors a year.

“It’s just that there was never an urgency to it until we got so big and conditions changed so that people were really feeling that,” he says. Haas was the Hawai‘i Tourism Authority’s VP for tourism marketing in the early 2000s and a consultant for HTA’s current strategic plan.

Those changed conditions included increased resident frustration with the local tourism industry, which accounted for a record 10.4 million visitors in 2019. More and more tourists were venturing out of resort areas in search of new and at times dangerous adventures, and residential neighborhoods were facing an explosion of unregulated vacation rentals.

Over the years, Hawai‘i has strived for a visitor industry that’s environmentally friendly and culturally sensitive, and one that mitigates the impacts of millions of visitors – so-called “sustainable tourism.” But since 2020, momentum has increased for a tourism model that’s regenerative, rather than just sustainable. To reflect that change, HTA’s 2020-2025 strategic plan largely focuses on destination management, and its marketing efforts target high-spending, low-impact visitors.

“For me, when we think about tourism, it should be done in a way that allows our future generations to call Hawai‘i home for a long, long time,” says Kalani Ka‘anā‘anā, chief brand officer at HTA. And that home, he says, should be in better condition than it is today. “It’s not just about preserving what is left, it’s about remediating, re-enhancing, regenerating what was partially lost or impacted.”

In 2021, HTA underwent a reorganization to emphasize that new direction and launched its Mālama Hawai‘i program to target mindful travelers. HTA videos encourage visitors to give back to the destination and direct them to the Mālama Hawai‘i website, where 50 partner hotels offer incentives to guests to volunteer with local nonprofits.

The shift to regenerative tourism also gives residents a greater say in how tourism is rebuilt and redefined. During the pandemic, HTA worked with community members, business owners, farmers, hotel executives and cultural practitioners to create destination management action plans for each island.

“The DMAPs are a framework for us to be able to engage communities, have a dialogue, really listen, get out there in person and see what communities are asking for, and then partnering with them to find solutions on some of the hot spots that exist,” Ka‘anā‘anā says, “and also finding other ways to empower them to tell their story.”

The three-year plans stretch into 2025 and emphasize visitor education, community-led management solutions, increased local food and product purchases, and investments in programs to support the perpetuation of Hawaiian culture. The plans also rely on the collaboration of government agencies and private and community organizations.

Some state lawmakers have long criticized HTA’s management of tourism and some even tried during the 2023 legislative session to replace the agency with a new tourism management entity. One challenge, according to Haas, is that HTA doesn’t have the statutory authority to enforce collaboration. He and others have argued that what is needed is a management approach based on policies that assign well-defined roles and functions to various government agencies.

“Tourism is unique in how complicated it is. It affects the community, it affects the economy, it affects natural resources, it intrudes on neighborhoods,” he says. “So you have to find some model where you can cut across all the silos to manage it properly.” One example of that model is at Hā‘ena State Park.

Empowered Community

Chipper Wichman and Presley Wann of Hui Maka‘āinana o Makana sit comfortably under a pop-up canopy surrounded by 5 acres of restored lo‘i kalo in Hā‘ena State Park. They say the area was the breadbasket of the surrounding Hawaiian community for 800 or more years. It was eventually turned into a state park, but with no management, invasive trees and plants overwhelmed the traditional landscape.

As the land deteriorated, many Native Hawaiian families lost their connection to Hā‘ena. So, in the mid-’90s, Wichman, Wann and other founding members of the nonprofit started considering how they could once again care for the land.

Photo: Aaron Yoshino

“The Hui Maka‘āinana o Makana, we’re all lineal descendants of this place, so it seems so natural to want to take care of it,” Wann says.

Under a curatorship agreement with the State Parks Division, the hui cleared and cleaned the area, mostly by hand. They ripped out invasive trees, unearthed ancient stone walls and restored the traditional waterway. Along the way, they cultivated kalo for the community and created educational programs to reconnect the next generation.

The hui’s long-term goal was to manage the park. They spent decades helping the State Parks Division create a master plan for facilities and infrastructure improvements and crowd control.

That master plan’s implementation was fast-tracked after a record-breaking storm in 2018. “The flood created the opportunity to not have to scale back from 3,000 people a day but to scale up from zero,” Wichman says.

The hui began managing the park under a revocable permit in 2021. While it focused on its farm and cultural restoration work, oversight of the management system was subcontracted out to the Hanalei Initiative, which had launched its North Shore Shuttle in 2019 to reduce the number of cars on Kūhiō Highway.

The two nonprofits share the park’s parking and shuttle revenues to support operational costs and park maintenance. Two of the hui’s next big projects are to build a restroom at the eastern end of the parking lot and restore the sand dunes that contain ancient burials. Wann says the revenue also supports the hui’s youth education programs, which reach about 1,200 keiki a year.

Meanwhile, the Hanalei Initiative has used its revenue to host an engineering class and to support community organizations with micro grants.

Together, the hui and Hanalei Initiative created 35 jobs for parking attendants, laborers, shuttle drivers, administrators and cultural practitioners. Twenty-one of those positions are filled by North Shore residents. And some are held by lineal descendants of Hā‘ena.

“Regenerative tourism in my mind is where tourism leaves a community and a resource better than you found it,” Wichman says. “It’s regenerating. That’s what this is doing here – those community jobs, the ‘āina right here, this ‘āina kūpuna that our ancestors farmed and lived off of in harmony with for hundreds and hundreds of years – it’s better today because of this model.”

He adds that he’s proud Hā‘ena can be a road map for other communities.

“Across the pae ‘āina, across the state, now we’re all looking at this concept of scaling back and creating an equitable balance, and this term regenerative tourism is now kind of becoming a buzzword,” he says.

Other Community Hot Spots

Earlier this summer, the key players involved in creating the Hā‘ena management system released a 60-page handbook on how to replicate their model. What’s been crucial, they say, is that communities build trust and mutual respect with other organizations and government agencies.

Alan Carpenter, assistant administrator of the State Parks Division, says his relationship with Hui Maka‘āinana o Makana began about 30 years ago when he was a DLNR archaeologist documenting Hā‘ena’s historical and cultural resources. And Wichman says the hui’s curatorship work showed the state that the group was committed to its love of place and community.

Strong working relationships were also built among community members, government and visitor industry leaders to help implement the Hā‘ena master plan.

Hā‘ena State Park used to see up to 3,000 visitors a day; today, it has a daily visitor cap of 900.  | Photo: Aaron Yoshino

Rep. Nadine Nakamura, who represents Kaua‘i’s North Shore, facilitated over 200 hours of meetings that led to the creation of new laws to help deter illegal parking on Kūhiō Highway and gave DLNR flexibility in setting parking and entry fees. Another new law signed this summer allows the state parks to enter into long-term contracts with community nonprofits to operate parking lots and concessions.

“That’s a huge shift, right, because people want to take part in managing their own parks, their own communities,” Carpenter says, adding that the new laws pave the way for other communities to follow Hā‘ena’s lead.

He says Kealakekua on Hawai‘i Island and Wai‘ānapanapa on Maui are looking at Hā‘ena’s example. And Wichman says lessons learned are being shared through the Hawai‘i Conservation Alliance’s Ahupua‘a Accelerator Initiative, which brings together six ahupua‘a focused on restoration efforts. The hope is that the work at Hā‘ena will compress the timeline for other communities seeking change.

And community-based efforts are happening outside of state parks too. For instance, HTA initiated a pilot program for four part-time community stewards in Pololū Valley, a visitor hot spot near Hawai‘i Island’s northern tip. Those stewards inform visitors about the valley’s importance and dangers. The program is now managed by the state DLNR.

HTA and Hawai‘i County also funded four community stewards in July at Waiuli and Lehia beach parks under the Keaukaha Steward Pilot Program, and the agency is working on another community-based program in East Maui.

HTA’s board of directors also voted at the end of July to approve the creation of a Destination Stewardship Branch, further increasing the organization’s focus on tourism management. Ka‘anā‘anā will lead the new branch as chief destination stewardship officer.

Regenerative Experiences

The sound of squelching mud repeats with each footstep as I move closer to a 10-by-12-foot lo‘i kalo in Uhau‘iole Valley, in the eastern interior of Kaua‘i. Noa Mau-Espirito and two other farmers have been cultivating kalo here for their families and community.

The farm is about a five-minute walk from a parking lot for three state-managed trails, so Mau-Espirito says he’ll occasionally invite inquisitive visitors to help in the lo‘i. In the process, they’ll get a lesson about Hawaiian history and traditional farming practices. Mau-Espirito’s work is part of a visitor engagement program being created by the Hanalei River Heritage Foundation.

Kamealoha Hanohano Pa-Smith, the foundation’s program administrator, watches as Mau-Espirito pulls weeds. “These are appropriate actions for visitors to be involved in,” he says. “We want them to know the journey behind what we’re doing and why we’re doing it.” As we talk under the shade of a banana tree, Pa-Smith points out that the breeze blowing from the northeast is called moa‘e lehua.

From left, Kamealoha Hanohano Pa-Smith, Noa MauEspirito and his daughter. Mau-Espirito grows kalo in Uhau‘iole Valley, while PaSmith works at a nonprofit that encourages tourists to work on that farm. | Photo: Aaron Yoshino

The nonprofit’s work is supported by the Hō‘ihi Grant from the U.S. Department of the Interior. The program gave nearly $1 million to seven Native Hawaiian organizations in fiscal year 2022. And it acknowledges that tourism has long been an extractive and transactional experience for Native Hawaiians.

Ka‘aleleo Wong, Hō‘ihi Grant manager with the Interior Department’s Office of Native Hawaiian Relations, says the grant is meant to encourage a mindful tourism model that accurately showcases Hawaiian culture and traditions.

“We are out here to show that there’s a way to solve these issues by practice,” PaSmith says. “In Hawaiian we say ma ka hana ka ‘ike – you can learn and you can gain knowledge by doing. So that’s where my heart is.”

And while visitors get to engage in meaningful experiences, the grant also benefits locals and Native Hawaiians, says Lia Sheehan, a foundation board member.

“We’re giving purpose to our folks on the island who can be growing their own food and telling their own stories and just validating their own life and livelihood and existence,” she says. She and Pa-Smith agree that Kaua‘i’s other popular destinations are ripe, as well, for community-hosted interpretative visitor education programs.

Over the summer, the Council for Native Hawaiian Advancement began work on its $27.1 million contract with the Hawai‘i Tourism Authority to provide stewardship services. Kūhiō Lewis, the nonprofit’s CEO, says the contract is an opportunity for Native Hawaiians to be seen as leaders.

Between 2015 and 2019, nearly 49,000 Native Hawaiians worked in tourism, according to a 2021 report by the state Department of Business, Economic Development and Tourism. That’s about 20% of all tourism workers.

“We are tourism, we are the culture,” he says. “We are the backbone of the industry and I think our value in the industry hasn’t necessarily been up to par with what we bring to the table. With a Native Hawaiian organization now being at the forefront, there’s a lot more people coming forward because they’re starting to see that opportunity.”

Building Capacity

As Hawai‘i continues its shift to regenerative tourism, the Hanalei River Heritage Foundation and other organizations recognize that better bridges need to be built to connect tourism and community groups.

“I think the trick is going to be we still have to build the system where the people of the place are able to truly be the hosts,” Sheehan says.

Pa-Smith adds that he’s been proactive in talking with tourism organizations about how his nonprofit can work with them, and cited efforts by other groups to do the same, on a larger scale.

Pa-Smith leads the way into Uhau‘iole Valley, where tourists are encouraged to work in lo‘i. | Photo: Aaron Yoshino

The Hanalei River Heritage Foundation was one of 29 community groups that participated in the 2021 Kaiāulu Ho‘okipa Impact Studio Cohort put on by the Native Hawaiian Hospitality Association and travel2change, a Hawai‘i nonprofit that connects visitors to volunteer experiences.

Cohort members learned about good business practices and how to accurately present Hawaiian culture while developing their regenerative experiences. They also received mentorship for three months after six-week training.

“We believe in the potential of our community leaders who are already doing the work to be able to come up with the solutions, and just because they’re not always super mainstream doesn’t disqualify them from having the answers,” says Mondy Jamshidi-Kent, who was travel2change’s executive director until March 2023. She is now principal of Naupaka Pacific, a consultancy that helps nonprofits and social enterprises offer regenerative tourism experiences.

The Council for Native Hawaiian Advancement already helps businesses and nonprofits build capacity and access financial support through its Pop-Up Mākeke online marketplace, financial counseling, loans and business classes. Now, using its existing tools, it’s pivoting to better help local organizations get involved in tourism, Lewis says.

Sustained By Tourism

Locals’ views of tourism are starting to improve, according to HTA’s latest resident sentiment survey from fall 2022.

About 44% of the 1,950 residents surveyed said that tourism was being better managed on their islands, up 5 percentage points from fall 2021. And 57% of respondents agreed that tourism’s benefits outweighed its problems, up 8 percentage points from a record low the prior year.

However, visitor numbers are almost back to their pre-pandemic peak, with arrivals each month between January and June this year at least 93% of what they were during the same month in 2019.

“I think we universally agree that 10 million visitors a year is too many, but we also sort of have to agree our economy is dependent on the tax base that’s generated from tourism dollars,” says Tyler Iokepa Gomes, chief administrator of Kilohana, CNHA’s tourism arm.

In 2022, the industry generated $2.24 billion in state tax revenue and supported 197,000 jobs, according to HTA. And in June 2023 alone, nearly 890,000 visitors spent $2 billion – 22.7% more than four years ago.

The key is figuring out how to make sure tourism is contributing more than it’s extracting, Gomes says. Regenerative tourism by itself won’t solve Hawai‘i’s high cost of living issues, but it can help, he says, by creating job diversity and wage and hiring equity for Native Hawaiians, among other things.

“I think if you were to ask me what does the future look like for tourism, it’s one in which our community is being sustained by tourism – where our farmers don’t need to struggle to farm, where our businesses aren’t clinging on to life,” Lewis says. “This is a multibillion-dollar industry and there’s no reason why it can’t regenerate our community and provide for them and their families, their future.”

Back at Hā‘ena State Park, Maka, the Hanalei Initiative employee, is somber. He says Kaua‘i has been flooded with visitors since pandemic-closures lifted. And because the park now requires advanced reservations that quickly sell out, tourists are flocking instead to nearby and sometimes more dangerous beaches.

“In order to save this place, the community has to really come together, the county has to come together or even the state, and slow these people down, really slow them down because there’s just too much people,” he says. “We have to start slowing them down now because we have to save (these places) for when we’re gone.”

Tourism Can Be a Catalyst for Local Agriculture

The 1 Hotel Hanalei Bay, situated on a steep hill, was built to blend into its surroundings. On one roof is an organic chef’s garden; others are lined with thick pili grass to help insulate the rooms below and to reduce stormwater runoff.

Sustainability and regenerative travel are key to the 1 Hotel brand. Alexis Eaton, director of marketing, public relations and programming at the luxury property, says when she first joined the hotel in June 2022, she and other leaders visited nearby farms to see how they could work together. Those visits ended up shaping the property’s culinary and wellness offerings.

“Instead of saying like, oh, we need to source this, we need to source that, we took the approach of what is available here, and then started to build from there,” she says.

About 85% of the ingredients used by 1 Hotel Hanalei Bay’s signature restaurant, 1 Kitchen, are sourced from Hawai‘i. Kaua‘i vendors include Mālama Kaua‘i, Moloa‘a Organica‘a, Aloha Honey Bee Farm, Buena Vista Gardens, Kainoa Fishery and Jerry’s Rice Farm.

Dishes made at 1 Hotel Hanalei Bay with locally grown ingredients.| Photo: courtesy of 1 Hotel Hanalei Bay

“We’re paying significantly more for rice, but we’re able to work with him (Jerry’s Rice Farm),” says Corrine Hanson, who until June was corporate director of sustainability and impact at SH Hotels and Resorts, which operates 1 Hotel. “Maybe he can scale and he can grow. The fact that we have a large enough business to be the catalyst for some of those things really makes me feel like we’re contributing in a way I would hope we could.”

 

Tourists Willing to Pay More

A 2021 study co-authored by UH professor Jerry Agrusa found that U.S. visitors to Hawai‘i are willing to pay more for locally grown food, as well as for experiences that are respectful of Hawaiian culture and sustainable tourism.

Hawai‘i’s tourism industry in 2019 contributed an estimated $98 million in direct visitor spending to Hawai‘i’s agricultural industry, according to a July 2022 DBEDT report. That climbs to $399 million when indirect visitor spending and spending by workers in tourism or other supportive industries are included.

Kalani Ka‘anā‘anā, chief brand officer for the Hawai‘i Tourism Authority, says that money helps local producers continue growing food for residents, and serves as a baseline for the positive impact that visitors have in diversifying the economy.

Agrusa, who’s conducting a second study on locally grown food, says small farmers can’t consistently meet the volume and quality that local hotels and restaurants need.

One solution to that is to have farmers aggregate their products for large purchasers. In Kahuku on O‘ahu, the 468- acre Kuilima Farm essentially acts as a food hub for its 11 tenant farmers and Pono Pacific, the farm’s manager. It produces about 2,000 pounds of produce a week, about 800 of which are sold to the five restaurants at the 408-room Turtle Bay Resort.

Produce from Mālama Kaua‘i. | Photo: courtesy of 1 Hotel Hanalei Bay

Ramsey Brown, VP of diversified agriculture at Pono Pacific, says the hope is that Kuilima Farm will grow into a true food hub model so its tenant farmers can also collaboratively serve other large purchasers.

Another challenge: Institutions want local food but don’t want to pay premiums for it, so they’ll opt for imported food that’s cheaper, says Pomai Weigert, a board member and trainer with the Hawai‘i Agritourism Association. She’s also an agribusiness consultant with GoFarm Hawai‘i.

“When you even just look at hotel price points in Hawai‘i, hotel room rates, people are spending thousands of dollars a night, but that doesn’t trickle all the way down” to the farmers, she says. “They’re still trying to keep their food costs low.” She says hotel leaders need to prioritize buying more local food, even if it costs more.

In the spring, over 20 hotels, restaurants, schools and nonprofits signed the O‘ahu Good Food Pledge to use more locally sourced food. Ka‘anā‘anā says this is an example of how destination management action plans are guiding HTA’s work to make sure tourism is supporting other industries. “

Tourism also needs to be catalytic – it needs to be something that causes other sectors of our economy to grow,” he says.

 

Combining Tourism and Agriculture

Using locally grown food in hotels and restaurants is just one way the tourism and agricultural industries intersect. Agritourism also includes farm, ranch and nursery tours; agricultural fairs and festivals; farmers markets; and farm-related accommodations.

Weigert says agritourism provides a way for visitors to help farmers grow more food for Hawai‘i’s residents, and that it’s more relevant than ever. She specializes in helping rural communities to create and package authentic visitor experiences that are focused on culture and that give back to local people.

“With agritourism, it’s agriculture first,” she says. “It’s not tourism first. So that’s also the big shift, and that is also why more rural and cultural communities are more open to it.”

What Does ALICE Stand For?

In 2018, Aloha United Way introduced a way for us to talk about and measure Hawai‘i’s working poor. ALICE, which stands for asset limited, income constrained and employed, provides a common framework for identifying and quantifying the people in our state who are above the federal poverty line and don’t qualify for many government assistance programs, yet can’t afford basic necessities to remain stable and self-sufficient. In the last five years, we have seen this segment grow from 42% to 44% of the state’s population.

Such alarming statistics continue to drive philanthropic and legislative efforts to help those living paycheck to paycheck. Partnering with the Hawai‘i Community Foundation, AUW funds a cohort of nonprofits dedicated to helping ALICE households achieve economic security. These 17 nonprofit groups focus on a variety of needs, skills and services, including job training, career advancement, financial planning, public benefits programs, affordable housing and civic leadership training. In addition to improving their own situations, cohort members are building pipelines to each other.

“Sometimes when you’re in the work of serving the community, you neglect the mechanisms of your own organization, and miss opportunities to improve those systems. As a collective impact cohort, we look for ways to support and improve the work of individual organizations as well as ways to collaborate, utilizing resources such as information and data more effectively,” says Keoni Kuoha, director of HCF’s House Maui Initiative.

The ultimate purpose of funding a cohort of agencies, as opposed to putting all the eggs in one basket, is to foster a system that can serve the whole person, says AUW President and CEO John Fink. “There’s usually a confluence of events that affect people. If they have housing problems they might have education or training problems or may not understand financing or might have food issues. The more we look at people in a holistic way, the better we can help them get on track.”

But while the concept of ALICE has served as a powerful rallying cry, cohort leaders we interviewed all stress that it’s not enough. The actual people who live with financial insecurity also need to recognize themselves in the definition. They need to know that they have a right to seek help, and that there are services available for people just like them.

“These are families that are contributing to our societies as ministers, pastors, nurses and parents. When they hear about ALICE, they may assume it’s people who aren’t as well off as they are. They may think they aren’t supposed to ask for help. But if 44% of us are in this situation, there should be no shame in saying we need help to make it through,” says Suzanne Skjold, AUW’s COO.

The leaders we spoke with also cautioned against letting names stigmatize or stereotype. This can be especially crucial when it comes to terms like ALICE, which focuses attention on the negative qualities of being limited and constrained.

“There’s a potential byproduct of naming, and that’s this othering,” says Ryan Kusumoto, president and CEO of Parents And Children Together. “It creates a group of people and makes us think that we need to do something for them or to them that will get them to a better place. There are economic challenges, absolutely. But that doesn’t mean their daily lifestyles are wrong. In fact, some of our ALICE families are the strongest cultural keepers of our communities, and we should be learning from them and living their values.”

In this piece, we explore the ways in which ALICE households have partnered with the cohort of nonprofits to become more economically resilient. But in our conversations with leaders as well as the people they serve, one consistent message emerged: The term ALICE, as important as it is for establishing a shared framework, doesn’t capture the complexity and resilience of the people it refers to. As Fink puts it, “ALICE are not just numbers on a page; they are living, breathing souls that represent what Hawai‘i is all about.”

Beyond the literal meaning of the acronym, what does ALICE stand for?

ALICE Stands for People Doing Important Work

Shona-Mae Cobb walks along the streets of O’ahu where homeless people congregate, searching for those who suffer from the most severe forms of mental illness. Her work for The Institute for Human Services often brings her to people like Royce.

“I first started seeing him in Chinatown. He was a skinny meth user, always on the streets, never showered. He had swollen legs, lice on his body and head. He refused our services, but we didn’t give up,” says Cobb. “After several weeks, he finally agreed to go to a clinic, where he could shower, get fresh clothing and be medicated for his illness. When I visited him at a shelter a few weeks later, he was in clean clothes and reading by his bed. It made me so happy. This was someone who’d been homeless for over 15 years.

“I love what I do. This work has given me so much purpose,” she adds.

Cobb herself grew up on the streets with a single mom who used drugs and was in and out of jail. As a parent, she has also gone through phases of living out of a car on the beach with her kids.

Photography by Keatan Kamakaiwi and Aaron Yoshino

“There’s this whole population of children and families that struggle with homelessness that we don’t often hear about,” says Ryan Catalani, executive director of Family Promise of Hawai‘i. “When families are so close to the precipice, any one thing can set them over the edge. It’s better if we can keep them in housing with things like rental assistance so they don’t have to go through the long and traumatic process of trying to regain housing and restart.”

Thanks to organizations including Family Promise of Hawai‘i and Catholic Charities Hawai‘i, Cobb now lives in a subsidized apartment for single mothers. But while it’s very affordable by O‘ahu standards, rent nonetheless eats up one full paycheck each month. She worries every day that her car will break down and she won’t be able to afford repairs or a replacement.

Similar to others in the ALICE community, she makes too much money to qualify for SNAP, or the Supplemental Nutrition Assistance Program, and because her youngest is 7, he is too old for WIC, the food program that targets women, infants and children. Cobb has high blood pressure, is prone to infections and struggles with anxiety and depression. And while her family is on the Med-QUEST health plan, she admits to holding off on her own care.

“I keep putting it off, and my work day comes and I’m swamped. I’m trying to save personal time for surgery. I figure as long as I can make it through the day, that’s a win for me,” says Cobb.

Hawai‘i Children’s Action Network Executive Director Deborah Zysman says that the people doing some of the most critical work in our communities are ALICE themselves. While there are agencies that provide training to help people transition into higher-paying work, Zysman says it is just as important to make sure people like Cobb can continue the work they are doing and still be economically secure.

“We need people to work in elder care, child care, teaching, retail or, like us, in nonprofits. We have to figure out how people can do full-time work with people with disabilities and be able to pay rent, have some savings and put food on their table. Getting them to move out of these sectors for higher-paying tech jobs in California shouldn’t be the goal. This is about fixing a broken system,” Zysman says.

ALICE Stands for Entrepreneurs

Next to the earrings she sells, Mattie Mae Larson likes to display plastic packaging that would otherwise have gone in the trash, watching people’s eyes go wide when they make the connection. All of her products, which include jewelry, beach totes, bookmarks, keychains, pouches and wallets, are made from plastic material that usually becomes landfill.

“We are all about sustainability and having less waste by taking and processing plastics, including the byproducts of food service,” she says, describing her company, Upcycle Hawai‘i, as being in the business of creating “trashion.”

Growing up on Hawai‘i Island, Larson was surrounded by entrepreneurs. Her father owned his own heavy-equipment business, her uncle was an auto mechanic and many people in her community worked at the farmers market. Even though her family struggled from paycheck to paycheck, she felt confident that her entrepreneurial drive and good credit scores were enough to start a business.

Entrepreneur Mattie Mae Larson struggled to land a traditional business loan. | Photography by Keatan Kamakaiwi and Aaron Yoshino

But then she discovered how banks actually work. “If you go there and ask for a loan without a ton of money and a 10-year history, they don’t care if you have 20 references and a great job history. Meanwhile, my peers and colleagues who came from rich families were given absurd amounts of loans for their businesses,” says Larson.

“I know my parents carry some guilt for the fact that I couldn’t get access to money, which is so ridiculous because they worked so hard their whole lives.”

Ahu Hettema, chef and CEO of Istanbul Hawai‘i, had a similar experience as a struggling entrepreneur.

Her business idea came to her at a particularly difficult time in her life: As an immigrant in Hawai‘i, she wasn’t sure if she could make it here.

Then her mother came for a visit and, to cheer her up, started cooking her favorite childhood dishes.

“Food sparks all your memories and feelings about who you are. It changed something in me. I started cooking, which I enjoy so much. I can’t express it in words, but it started my healing process,” says Hettema.

She and her mother began selling the food of their native country out of a food truck at a farmers market, and after enthusiastic responses from customers, she realized there was an opportunity to open a restaurant. But in order to develop the space she had found in Kaka‘ako, she needed a loan.

“We went to a total of 30 banks in Hawai‘i as well as on the mainland. And not one of them wanted to fund us,” says Hettema.

Entrepreneurs like Larson and Hettema, who have few-to-no resources of their own, are typically rejected for loans because they are considered too high risk and low margin to be viable investments, says Patti Chang, CEO of Feed The Hunger Fund. Recognizing this, Chang saw an opportunity to provide loans as well as technical assistance – including financial literacy, business planning guidance and credit counseling – to low-income entrepreneurs.

“We are the first responder for many of these folks who need loans. They will get rejected from so many other sources. When you look at the high cost of living, some of our folks are very poor and below ALICE, especially farmers,” Chang says.

Larson at Upcycle Hawai‘i, which she launched with a loan from Feed The Hunger Fund | Photography by Keatan Kamakaiwi and Aaron Yoshino

Feed The Hunger Fund focuses on businesses that support healthier food systems within the state. “We look at food enterprises in Hawai‘i, from soil to fork and everything in between,” says Chang. “We do so because food is everything. After finishing a meal, we talk about the next meal. And from a political sense in Hawai‘i, it’s also where immigration, labor laws, climate change and plantation labor all came together. Not to mention that food is so essential to our communities because it’s so cultural.”

Chang believes that supporting entrepreneurship within the ALICE population can create jobs for more people. “We’ve had individuals like a single mom with three kids trying to make kimchi on the side. We are willing to take more risk because when folks are successful, they hire more employees.”

With two loans from Feed The Hunger Fund, Larson was able to sign her first commercial lease, buy equipment and hire three employees. While she still sees herself on the precipice, she is proud that the business makes more money every year and that she has been able to provide one of her employees with full health care.

“They were the first and only ones that took a chance on us. And they didn’t just give us funds, but helped navigate us to make the right decisions and were there whenever we needed help,” says Larson.

Hettema used her loan from the Feed The Hunger Fund for payroll, rent, furniture and food. Today, Istanbul Hawai‘i has 16 employees and is considered one of the hottest restaurants in Honolulu. “Because of that loan, we could open the doors. And when we did, people just kept coming and supporting us. It got my business going. It turned our engine on.”

ALICE Stands for Working Parents

In 2019, Calvin Kā’aiali’i Matthews’ son was born and, shortly after, was diagnosed with a rare genetic syndrome that affected the communication between his brain stem and other parts of his body. This meant, among other things, that Matthews’ son needed to be on a ventilator whenever he slept. With his wife at home caring for their child full-time, Matthews became the sole breadwinner.

Despite having a university degree in business administration and a full-time job as a customer service representative, Matthews didn’t earn enough money for the family to get its own place. Living with his parents, he juggled work and numerous medical appointments for his son, and supported his Japanese wife, who didn’t speak much English and had few friends in Hawai‘i.

“Living paycheck to paycheck can be so scary. If I was on my own and had zero dependents, it would be a different story. But because two people rely on me, there is a lot of pressure to succeed with my career and income. There’s also the added pressure of all these expenses related to making sure my son’s health is going smoothly,” says Matthews.

“We cannot make any mistakes. We need to make sure his appointments are up to date. And when he’s asleep we must make sure he’s connected to a ventilator. There’s so much that goes on mentally in my head all of the time.”

Photography by Keatan Kamakaiwi and Aaron Yoshino

Matthews’ habit of collecting points from different rewards programs eventually led to a solution. Having signed up for a membership card with Goodwill Hawai‘i, he received regular promotional emails and, in one, learned about the organization’s Google IT program that focuses on fundamental technical skills. Accepted in late 2020, he completed the self-paced remote program in half a year.

“I’ve always been interested in IT as a hobby, but this email was a golden opportunity for me to transition away from my current field,” he says.

Goodwill Hawai‘i can also connect people to courses in other areas, including the medical field, massage therapy, child care, food handling, personal training and truck driving, according to Emily Lau, vice president of mission services. These certifications are often offered online, and some can even be done in a day.

And Goodwill Hawai‘i’s career development model continues beyond skills training. “We have a whole support mechanism that includes emotional support from our staff and connections to help people find jobs. Individuals might have different family challenges and without support, people often quit in the middle. Our staff is there to encourage and help them think about ways to overcome,” says Lau.

Just one month after getting his Google IT program certificate, Matthews secured a job at a tech company, increasing his salary by 20%. His family was finally able to rent its own apartment.

Calvin Kā‘aiali‘i Matthews moved from customer service to IT following job training from Goodwill Hawaii. | Photography by Keatan Kamakaiwi and Aaron Yoshino

But just as important as the additional money is the fact that his new job is fully remote, which allows him to be at home. “There was one time when my son’s oxygen level dropped quickly. But I was just five steps away and was able to give him oxygen and call an ambulance. That gave my wife so much peace of mind. Before, it was so hard for me to go to the office, leaving my wife and son at home. Being physically there has made such a huge difference.”

ALICE Stands for Staying Rooted in Hawai‘i, Despite How Hard It Is

Kimo Carvalho carried a laminated photo of his dream house to remind him of his goal every time he opened his wallet to pay for something.

For Carvalho, though, that goal felt unattainable for so long, despite his master’s degree and a combined income, with his husband, that exceeded $100,000.

“We were making too much for entitlement programs but not enough to cover our expenses, which included two vehicles, health care, food, bills, rent, utilities, water and electric,” he says. “When the system looks at who is ALICE, we go by median income as the metric. But that doesn’t take into consideration area median expenses. Our expenses were so high, it was always difficult to catch up.”

To compound the pressure, his husband developed a chronic disease in his leg, requiring travel to medical specialists and time off work.

“We felt numb to the routine. We were just living to work and living to survive, and when you realize that everyone else is living the same way, it becomes normalized.”

But what continued to motivate Carvalho toward the dream of homeownership, despite even his husband’s skepticism, was his own upbringing. “I grew up in foster care and if you ask a lot of foster-care kids who live in unstable housing and bounce around from home to home, one of the biggest things we want is a stable place of our own. To make our own rules, make our own way of living, create our own identity. You can do that as a renter, but there’s a longing to have your own piece of paradise.”

Carvalho admits that although he worked with ALICE populations at AUW, he was unaware of the services available for people like himself who were struggling to buy a home.

“As somebody who is very involved in communications and public awareness, my limited knowledge of that information is pretty telling. Most people don’t think they are supposed to approach service providers unless they are in a crisis state. But the truth is, if they are struggling enough, they should get in touch.”

It was a friend who introduced him to the Hawai‘i HomeOwnership Center. Carvalho and his husband started with a set of classes that explained the entire purchase process, the role of the Realtor, types of mortgages and loan programs, and how to create a financial action plan. They also underwent an affordability analysis.

“We take their income, debt and sample closing costs, and come out with a sample loan amount. They can then see what they would likely qualify for,” explains Executive Director Reina Miyamoto. “But just as importantly, it helps them see what they might qualify for if they didn’t, for example, have any credit card debt. In some cases, it has motivated people to get more education or decide they really didn’t need such a big car.”

Carvalho says the center helped him become more aware of his spending habits, which ultimately led to a healthier relationship with money. “At the time, we were always eating out since it was so convenient, but the budget template and saving receipts made us see how much we were actually spending. I realized I was spending like $3,000 a year on Starbucks. That’s what convenience does – it’s like a drug, it makes you feel good about a decision since it’s so easy and you justify it by saying it’s just one time. But that’s three grand that could have gone into an investment. Then you realize that’s a behavior that can change.”

After three years of regular accountability meetings with their coach to talk about how they were doing with their goals, Carvalho and his husband bought their first home. A year and a half later, the value of that condo had increased so much that they qualified for another mortgage, allowing them to upgrade to a single-family home.

Michael McCray, a coach at Hawai‘i HomeOwnership Center, encourages that kind of long-term view, especially for people who can’t imagine owning a home in their current situation. “I tell the folks that are attending, think of this like a fitness goal. Let’s say you want to lose 20 pounds by a wedding. Would you rather have six months or six weeks to do it? Now is the perfect time to start because you can take baby steps. You can do a little at a time.”

Carvalho acknowledges that everything may have been a lot easier if he and his husband had moved to a more affordable part of the country. But in the end, they decided to stay for the sake of starting a family in the one place they consider home.

“Every time I opened my wallet, the laminated photo of my dream home reminds me that generational wealth is built over generations, just like generational poverty is built over generations. It reminds me that breaking this cycle is not just for me, but for growing a family. It’s a long, long journey. It requires a lot of patience and values. But as long as you have your priorities and goals and you make incremental progress year after year, it actually is possible.”

ALICE Stands for the Values of the Community

Māpuana Simpliciano was pregnant when she caught Covid from her 4-year-old son. Not only did it impact her health, it also affected her unborn child, requiring doctors to induce labor early. Although her family was reeling from health issues and caring for a newborn, she was worried about her finances and the cost of taking more time off. She ended up cutting her meager six-week maternity leave short.

“We’re educated, fully employed and we don’t take government assistance. And this is what we’re dealing with. With all the medical bills and the surprise of having to take time off of work because of Covid, it really hit me that we’re a paycheck away from homelessness,” she says.

Despite having a doctorate in education and a master’s degree in public health, the experience made her realize how precarious life is for so many people, including herself, and how families need big, systemic changes to gain a measure of security. “I felt helpless being in a system where things weren’t working and being in financial stress. Lots of times as a parent, I felt like I was on my own.”

She found her voice and confidence while participating in the Hawai‘i Parent Leadership Training Institute, or PLTI. Now in its sixth year, PLTI, organized by the Hawai‘i Children’s Action Network, is a 20-session program that trains parents on leadership and civics. Participants learn how the government works, how to engage with the media and how to effectively advocate for issues such as affordable child care, paid family leave and raising the minimum wage.

Photography by Keatan Kamakaiwi and Aaron Yoshino

“We are a bit different from other nonprofits because we are not a direct service organization. We do movement building and advocacy with ALICE families,” says Zysman, the action network’s executive director. “We believe that families know what they need and see where the system is not working. We work with parents looking to step into leadership who might not think they have the skills, networks and camaraderie.

“Our motto is transforming parents who care into parents who lead.”

Simpliciano has drawn on the training to become an advocate for clean air in the classroom, educating teachers on ventilation and how to use carbon dioxide monitors and even to build their own DIY air-filtration systems. For her, the consequences of getting sick were just too high.

“There may be people making policies that aren’t experiencing the same type of struggles as the average parents. If we stay quiet and don’t know the avenues for advocating, things are never going to get better. The voice of the community can be a cohesive one. It can be powerful and make change,” Simpliciano says.

Kusumoto, the Parents And Children Together president and CEO, urges everyone working on ALICE issues to take the time to listen to the people they want to serve.

“The community is already talking. They are having conversations and they already know how to solve some of these concerns,” says Kusumoto. “One thing we’ve learned is that the best solutions are coming from the community. They might just need help getting some resources. But for us, it’s important to find ways to be legitimate, gather intelligence, understand stories, lift up their leaders and let the community take the lead in solving their issues.

“If we can do a little less to people and for people, and focus on doing a little more with people, we’re all going to be in a better place.”

Part 1: Mapping the Mental Health Crisis

The situation is dire but there are hopeful signs, such as the acceptance and effectiveness of telehealth therapy.

Jump to Part 2: The Rocky Path to Becoming a Mental Health Provider

Anxiety can feel like a squirrel in your head. Thoughts get stuck, circling over and over. The constant internal chatter makes it hard to slow down and calm your thoughts.

That’s how Chachie Abara describes it, as she recalls anxiously fixating on what other people thought of her. Insecurity may be a hallmark of youth, but hers felt unmanageable. “I was constantly obsessing about whether people liked me,” she says.

She says that need for assurance likely stems from being a shy child. She emigrated from the Philippines at age 7 and while she longed for close friends in her new ‘Ewa home, they were difficult to find.

As she grew older, social media exacerbated her anxiety and bouts of depression. Instagram can be the worst culprit, she says, as people “show off” in their postings, inviting comparisons.

At UH Mānoa, where she majored in psychology and Philippine language and culture, she finally understood what was happening. “I didn’t even know what mental health was,” she says. “In college, I learned the words and definitions behind what I was going through.”

She says that among her circles, “people struggle with peer pressure, conforming, not knowing what to do with their lives. We want to know what’s next.”

To deal with intense, often debilitating feelings, many of her peers use medication prescribed by doctors. Others turn to religion or spirituality, meditation and “trying to find and redefine yourself.”

Abara talks to a therapist, does free writing, practices mindfulness, regularly disengages from social media and maintains periods of silence. She says she’s on a “healing journey” after hitting a low point and seeking help from a crisis line.

Despite having a full-time job, working on a children’s book and running a Filipino-focused podcast called Kasamahan Co, she can doubt herself: Am I doing enough? Does the work I do matter?

She reminds herself it’s enough, that she shouldn’t push so hard. But projects have a way of pulling her in. The latest is launching a Hawai‘i chapter of the San Francisco-based Filipino Mental Health Initiative, where she hopes to reach high school and college students, building awareness and delivering the message that they’re not alone.

Throughout the Islands and across the continental U.S., at every income level, vast numbers of young people say they are anxious, depressed and thinking about suicide.

Teenagers in Distress

The youth mental health crisis has been brewing for years, starting at least a decade ago and accelerating during the long, lonely pandemic months. By 2021, a rare Surgeon General’s Advisory was issued, calling it an urgent public health issue.

In February of this year, alarm bells went off again when the Centers for Disease Control and Prevention released the results of the national Youth Risk Behavior Survey: 42% of high schoolers experienced persistent feelings of sadness and hopelessness in 2021, up from 28% in 2011. And 22% were seriously considering suicide, up from 16% a decade earlier.

Among girls, those numbers were worse: 57% said they felt so sad or hopeless for a stretch of time that they stopped doing their usual activities. For LGBQ+ students, 69% felt that way. (Data specifically on transgender students wasn’t captured.)

Even gloomier, about 30% of high school girls said they were contemplating suicide, as were 45% of LGBQ+ students. These are far higher numbers than those for boys and straight kids, and higher than any single racial or ethnic group, including Native Hawaiians and Pacific Islanders.

In April, the Hawai‘i Department of Education and Department of Health released their own data collected for the national report. The Hawai‘i Youth Risk Behavior Survey, which was administered to middle and high schoolers in spring 2019 and fall 2021, found distress levels were slightly lower than national averages, but still worrisome.

Among public high school students across the state, 35% said they had experienced at least a two-week stretch of sadness and hopelessness – 7% fewer than national results. And nearly 17% were seriously contemplating suicide – 5% less than the national figure.

When the data on girls are broken out, the numbers jump. About 47% of high school girls in Hawai‘i suffered from depression during the survey period, and about 23% had suicidal thoughts. Among middle school girls, an alarming 35% had suicidal thoughts.

For LGBQ high schoolers in Hawai‘i, 59% experienced depression and 39% had suicidal thoughts.

A broader segment of the LGBTQ+ population was surveyed in 2022 by the Trevor Project, a national suicide-prevention organization. That survey found that 75% of LGBTQ+ people in Hawai‘i, ages 13-24, reported symptoms of anxiety, 53% had symptoms of depression and 52% were seriously considering suicide. A full 17% had attempted suicide in the past year.

Compared to national rates for people of all ages, Hawai‘i has relatively few deaths by suicide, ranking 40th. But among teens 17 to 19, Hawai‘i has the 19th highest rate. Of the 47 young people who died by suicide between 2016 and 2020 across the state, 66% were in the 17-19 age range and 74% were male, according to data from the Child and Adolescent Mental Health Division of the state Department of Health.

Some teenagers in distress have sought out immediate help. Since launching in 2013, about 3,600 people ages 13 to 17 have used the crisis text line from the 808 area code, according to the Child and Adolescent Mental Health Division.

But that represents just a tiny fraction of young people needing assistance. Recent data from the advocacy group Mental Health America shows that Hawai‘i ranks near the bottom in accessing services: 75% of youths with major depressive symptoms have received no mental health services.

What Therapists See

The high incidence of teens reporting mental health issues doesn’t surprise Joy Tanimura Winquist, a private-practice therapist in Kaimukī. She left nonprofit and government settings to open Pūlama Counseling in 2021, and her appointment book quickly filled up. She treats mostly children and teens, and particularly girls.

Adolescence, of course, is a time of intense emotions, filled with crushes, rivalries, slights and elation. Feeling anxious or sad is not inherently bad, says Winquist. “But clinical anxiety or clinical depression, that is when we’ve gotten a little outside, gotten dysregulated, something feels too big, too hard in those moments.”

In her practice she sees a lot of clinical anxiety and depression, as well as undiagnosed ADHD, which can lead to academic struggles and self-criticism. “Then there’s the continued pressure of getting good grades and, unfortunately, with the high schoolers, a lot of them have had some type of negative sexual encounter,” says Winquist.

Many of her clients with anxiety have been raised in households full of worry – they absorb the anxiety of their parents, which was only intensified by the pandemic.

“The grown-ups were so anxious, it was hard not to take it on,” Winquist says. “The kids assume it’s because they’re defective,” a narrative that can lead to depression.

Psychologist Gerald Brouwers, Ph.D., agrees that parents are contributing factors. “One thing I like to say is that anxiety is a contagious disease,” he says. “It’s often transmitted in families, so if you’ve spent a year and a half at home with mom and dad, that can mean their stress also impacts the kid’s stress.”

Brouwers brings decades of experience as a psychologist to his busy private practice in Mānoa. About 40% of his client base are teenagers. Many of them attend surrounding private and public schools and are part of a more affluent Island demographic.

Like Winquist, he sees many kids with anxiety, depression and ADHD, and he helps them recognize the stressors in their lives and find ways to relieve stress or to change their perceptions of why “everything feels so horrible.”

Some of those feelings come from pressure to achieve. “Parents and schools communicate expectations in a lot of ways,” Brouwers says. “If you’re on the downside of that performance scale, then you get more anxious because you’re falling farther behind. It’s not a good place to be. It contributes to depression and people feeling overwhelmed and helpless.”

Ultimately, he’s not especially worried about young people, and takes the long view that comes from knowing that the disruptions of adolescence usually subside with maturity. He says adults’ concerns about younger generations are as old as Aristotle, who wrote in the fourth century B.C. that all of their mistakes are due to excess and vehemence and their neglect of the maxim, never go to extremes.

But the long view can be hard to absorb when you’re deep in the social dramas and academic demands of many of Honolulu’s public and private schools – the latter which enroll about 8,000 high schoolers, according to 2021-2022 data from the Hawai‘i Association of Independent Schools.

One student, for example, is a striking, articulate high schooler who wins state awards and has loving parents. From the outside, her life looks enviable, laid out like stepping stones on the path to an ideal adulthood: college on the mainland, graduate school, rewarding job, family.

But in her mid-teen years, that’s not how she sees it. The pressures of her private school can make her sad and anxious, says her father, and she’s often holed away in her bedroom in the evenings and on weekends. It gets so bad that she sometimes can’t keep food down, and her thin frame can take on a gaunt cast. She lashes out at him frequently.

Despite her achievements, she never meets her own expectations. She compares herself to an older sibling and is determined to follow the same career path, whether it suits her or not. (Names and identifying information have been removed at the parents’ request.)

Another teen from Honolulu comes from a similarly caring and comfortable home. He graduated from high school with exceptionally high test scores and rare technical gifts.

But after a year of college in a northern mainland campus, the remoteness and scarcity of light – with the winter sun setting in the late afternoon and dense clouds creating a funereal gloom – have been hard to adjust to.

Some older difficulties persist as well, including trouble reading social cues and anxiety about what the future holds and how to deal with uncertainty. He tells his mother that three more years there feels impossible.

Anxiety in College

At UH Mānoa, the Counseling and Student Development Center gives many students their first chance to independently access mental health services, without getting a bill or fielding questions from parents.

Every student gets six online sessions a year, a number capped by the center’s limited pool of mental health professionals. Students in crisis, however, get immediate interventions, and those with more extensive needs are given referrals, though a shortage of providers can make it hard to find openings.

The past year has been busy, says psychologist Alexander Khaddouma, Ph.D., a coordinator of clinical services. The UH center sees the same trends as mainland campuses, with the rates of anxiety and depression continually creeping up.

A 2022 report from the Center for Collegiate Mental Health shows that 65% of students visiting a campus counseling center in the 2021-2022 school year had anxiety – up 10% from a decade ago. About 46% had depression, which is slightly more than 10 years ago.

Generalized anxiety is the most common concern. A frequent scenario, says Khaddouma, is a student who feels sad, unmotivated, constantly fatigued and is skipping classes. “What brought them in is that they’re worried about their academic functioning, but really it brings up this mood issue they’ve been struggling with.”

Others come to the UH center with social anxiety. “They’re nervous around other people, having agitated thoughts where you can’t clear your mind and stay calm,” he says.

The steepest 12-year increase was among people with social anxiety, according to the national collegiate report, particularly the concern that “others do not like me.” The report speculates that isolation, social media comparisons and weak social skills – stunted by the pandemic – could be driving the increases.

Khaddouma says he sees all of those factors in the students he tries to help, on top of the heightened academic demands, stresses of college and lingering trauma from the past several years. Some of the students’ anxiety is in response to turmoil in the world, whether it’s political instability, gun violence or eroding rights.

For young adults, in particular, distress about the state of the nation is far from trivial: 53% of people ages 18 to 34 – the youngest group surveyed – said it made them consider moving to a different country, as did 59% of LGBTQ+ respondents, according to the Stress in America 2022 report from the American Psychological Association.

And there’s another issue that nearly everyone interviewed mentioned, which is simply the visibility of mental health issues today and the willingness of young people to talk about them.

“People are using a more therapy-focused language on social media. They’re using words like anxiety and trauma and depression,” says Khaddouma.

“Is that a good thing, or does it mean we’re watering down these pretty serious conditions that really affect people?” he asks. “My experience has been that it’s good for folks to have the language to describe how they feel.”

Public Schools Take Action

Hawai‘i’s public schools have spent the past year actively trying to boost students’ well-being, and many behavioral health professionals hope the new attention on mental health will spur lasting change.

“We don’t want mental health to go back into the background again,” says Ayada Bonilla, a school-based behavioral health educational specialist in the Office of Student Support Services of the state Department of Education.

Across the school system, the department has rolled out mental health screenings and is monitoring students, and it’s trained faculty and staff to spot warning signs – for example, students who are isolating themselves or whose grades have suddenly dropped. These “internalizers” can be harder to identify than the “externalizers” who are regularly sent to see counselors and administrators, says Bonilla.

“We want a larger network of individuals who are having their eyes on the students,” she says, stressing that when students have someone they trust at school, they’re more likely to open up and share their worries.

“The biggest screener that we have is day-to-day boots on the ground of adults building solid relationships with students,” agrees Kevin Cochran, a behavioral health specialist at Kohala Middle School on Hawai‘i Island. “And that goes for every adult, from the bus drivers all the way up to the principal.”

Students can also turn to a new, and free, online therapy program from Hazel Health, a San Francisco-based telehealth organization that has partnered with Hawai‘i’s public schools. Through the program, students can talk to therapists during the school day or from home.

Since launching in April 2022, more than 1,000 students have used this supplemental option, according to Fern Yoshida, student support section administrator in the Office of Student Support Services. While teletherapy has its critics, multiple studies show that it’s effective and that many young people prefer it.

Christina Swafford runs individual and group therapy sessions online through the Hawai‘i Center for Children & Families in Kapolei – practical training required for her master’s degree in mental health counseling at UH Hilo. She says telehealth has been an adjustment for her but not for young people.

“The kids are just totally acclimated to it. We actually tried to do in-person groups, and there wasn’t a lot of enthusiasm,” says Swafford. For those with limited access to in-person therapy, it can be the only realistic option.

Lauren Canton, another behavioral health specialist at Kohala Middle, says: “I’ve found it incredibly helpful, especially being in a rural, isolated area. We don’t have many clinicians in our small community. Parents have to drive 45 minutes to an hour to meet in person with a therapist, so Hazel really helps with accessibility.”

Few Hawai‘i Youths Get Help With Depression

Only a small fraction of youths ages 12-17 get any mental health treatment for major depressive symptoms. Here’s how Hawai‘i stacks up against national averages.

The state Department of Education is also rolling out programs targeting social-emotional learning, which focuses on the soft skills that underpin success in school, such as managing emotions, sustaining relationships and setting goals. Many of these programs are funded with federal pandemic dollars that began coming into schools at the start of the 2021-2022 school year.

To track progress, students complete a new social-emotional survey three times a year. Results from the winter 2023 self-assessments, completed by 66,500 students in grades 6-12, show tiny strides since the first survey in the fall.

But students are starting from a vulnerable position. In most categories – including self-management, grit, growth mindset and sense of belonging – Hawai‘i students are still in the 20th to 39th percentile nationally. (Elementary school students, however, scored significantly higher.)

Among individual schools, social-emotional learning takes many forms. At Kailua High School, for instance, behavioral health specialists Shion Pritchard and Cassidy Lasalle opened a wellness room on campus. It’s a soothing space where students can work on self-regulation skills and connect with the support team.

The team often helps students with social anxiety, says Pritchard. “They don’t want to get out of their cars when they come to school; they’re just really worried about going outside,” she says. In one example, she helped a student overcome intense fears of interacting with peers and walking through hallways.

Through two years of exposure therapy – adding small doses of a feared activity to incrementally build confidence – the student progressed from taking all courses in a single classroom to moving from room to room. In a breakthrough moment, the student recently presented a project to a panel of judges.

School counselors and behavioral health staff maintain a core focus on helping students like the one in Kailua. All told, they work with about 8,000 students with intensive needs in Hawai‘i’s public schools.

“We really have this wraparound continuum of care for a large number of students,” explains Bonilla from the Office of Student Support Services. Among the staff are behavioral health specialists, social workers, clinical psychologists and mental health counselors.

“I think Hawai‘i is in the vanguard,” says Kohala Middle School’s Cochran. “I don’t know many other states that have clinical people that are in the schools, getting to see students every day. The amount of progress that we can make and the amount of support that we give, being housed in the schools, are immense.”

Help for LGBTQ+ Youth

At Farrington High School, Cardenas Pintor found more support and acceptance than they ever did in Catholic schools. It was a relief to switch to a public school with a supportive Gay-Straight Alliance and caring social workers.

“The social workers have always been there for me and other students,” says Pintor. “They are way more accepting than the Catholic schools, and they understand that they need to help those being oppressed. They may have saved a lot more lives than we know about.”

It hasn’t been easy being a queer, agender teenager in Kalihi-Pālama. “I was raised around the thought that being gay or transgender would be punishable by God, and I would be sent to hell,” says Pintor.

The baggage of that upbringing and the challenges of anxiety and gender dysphoria can weigh heavily, but Pintor is well-informed and proactive in seeking help from Farrington’s LGBTQ+ support group, school personnel and outside mental health professionals.

“In Kalihi-Pālama, you experience these ways of thinking,” says Pintor. “People say, ‘You can do it by yourself, you’ll get through it, just carry on.’ But it doesn’t work that way, especially in Asian and Pacific Islander cultures, where everything happens in a community. If one falls, everyone falls.”

Pintor says a lot of students at Farrington have undiagnosed anxiety, depression and suicide ideation, and don’t know how to process their feelings properly. They encourage students to take advantage of school resources and to tap their family’s health insurance plans for therapy.

Under Hawai‘i’s consent law, people 14 and older can access mental-health counseling without their parents’ knowledge or consent, and insurers billed by therapists are prevented from sharing that information.

But few young people seem to know about these privacy rights. The Trevor Project’s 2022 report on LGBTQ+ youth in Hawai‘i found that 61% said they wanted mental health services but didn’t get them because they were afraid to ask their parents. Among survey respondents, only 19% said they had a high level of support from their families.

In Pintor’s family, there’s love but not enough support, they say. “But my parents are willing to learn who I am, and I hope they can understand I am unable to change and be the ‘perfect person’ they want me to be.”

Pintor graduates from Farrington in May with both a high school diploma and an associate degree in liberal arts from Honolulu Community College. They’re looking forward to pursuing social work at UH Mānoa in August and taking advantage of the wide-ranging offerings of a large university, such as women’s studies, gender studies and psychology.

“I’m very excited to see what the future will hold,” says Pintor.

Impacts of Social Media

In the mental health world, social media is a paradox: It’s the primary means that young people connect with one another, yet for some, especially girls, it can also be a nonstop triggering device that follows them everywhere, including their bedrooms.

But how much it contributes to escalating rates of anxiety and depression remains an open question. There’s no hard, definitive data about the harms of Instagram, for instance, and expert opinions vary, though the U.S. surgeon general warned of social media’s risks to young people in a May advisory.

Teens themselves say social media has a positive or neutral impact on their lives. In a recent Pew Research Center survey of 13- to 17-year-olds, only 9% said social media has a negative effect on them personally, though 32% said it has a negative effect on other teens.

Christina Swafford, the UH Hilo master’s student, was 11 when Instagram launched, so she is used to inhabiting a digital space, and the young people she counsels have never known life without social media.

Swafford’s view is that the upsides outweigh the negatives. “There’s a strong sense of community on social media,” she says. “It makes it so accessible to make friends who have shared experiences, or who have been through similar things as you.” She says many teens learn coping skills on social media.

Others are more ambivalent. Winquist, the private-practice therapist in Kaimukī, sees downsides but says there’s no going back. Social media was kids’ lifeline while classrooms were closed, and being online all day was encouraged by adults, she says. She advises parents to find balance when they’re setting limits.

At Child & Family Service, President and CEO Karen Tan is the oldest of the three women interviewed on this topic. She’s spent the past 18 years working at the social-services nonprofit based in ‘Ewa Beach, which helps about 15,000 people across the Islands. With three daughters in college and a team of 400 employees sharing stories from the field, she’s alarmed by social media’s impact.

Since Tan got her master’s degree from UH Mānoa in 1994 and began working professionally in Hawai‘i, she’s seen a dramatic change in the severity of issues young people face, including elevated levels of anxiety and depression, self-esteem issues and suicide ideation. She says social media is a major contributor as it adds pressure to portray yourself as perfect and shreds any sense of privacy.

“When we were in school, we would go home and the only people who came to our home were people we wanted there. Home was a safe place,” she says. Social media wrecks that security with its stream of potentially hurtful images and comments, and it becomes a false measure of worth.

“If someone sees how they’re valued based on the number of followers or likes … it’s almost like, I’m good if I get hundreds of likes, I’m bad if no one likes (my post),” says Tan. “Someone who’s already feeling down, it’s just pushing them down further, and they don’t know how to stop it.”

Trauma-Informed Care

The clinical definition of trauma, says Winquist, is a neurobiological response to a stressful event that impacts a person’s emotional and mental health. To make sense of how stressful events can layer upon each other and create lasting damage, she points to the groundbreaking ACEs study.

In 1995, the Centers for Disease Control and Prevention and Kaiser Permanente introduced the concept of adverse childhood experiences, or ACEs. These can be fairly commonplace occurrences ranging from divorce and bullying to physical and emotional abuse to growing up amid chronic poverty or discrimination. The pandemic, by definition, is an ACE, says Winquist.

The more adversity a young person faces – especially without a caring adult at their side – the greater a person’s chances of experiencing toxic stress and trauma, which can manifest as anxiety, depression, behavior issues and poor physical health.

Trauma impacts many kids in Hawai‘i. At Child & Family Service’s four domestic violence shelters, Tan says staffers see many young people who have witnessed recurrent violence and been victims of sexual abuse in the home, the latter of which increased significantly during the pandemic, she notes.

Jamie Hernandez Armstrong, Ph.D., is the chief psychologist at the state Department of Health’s Child and Adolescent Mental Health Division, which works with youths with serious emotional and behavioral challenges. She’s treated young people from Hawai‘i who were trafficked in the Islands.

“I worked with a number of youth who suffered horribly as a result of trafficking,” says Armstrong. “It’s interesting to me when people say, ‘Oh, that’s not real, that’s not really happening.’ Well I know it’s happening because I’ve seen it. And it doesn’t just happen to girls.”

Even far less severe experiences can impact brain development and impulse control, says Tan, which can make kids punch holes in walls or hit peers when they’re frustrated.

Tia Roberts Hartsock heads the newly created Office of Wellness and Resilience in the governor’s office. In this new role, she’s taking a sweeping view of all the ways that unaddressed stress and trauma are manifesting in the state and creating standards for trauma-informed care.

One example is kids who run away from home or school. “Oftentimes a split-second unconscious pathway in your brain triggers a response and makes you punch something or run away,” she says, noting that Hawai‘i has juvenile runaway laws that criminalize the behavior. “But if we understand trauma, this is often a response to a traumatic event that instantaneously happens.”

Rather than punishing behavior issues, trauma-informed care views the behavior through the lens of what a person has experienced, and works with them to recover from the trauma and the dysregulation caused by so much stress. Youths, for example, would be allowed to get out their anger in a safe way, talk through their feelings and slowly learn how to control their impulses.

Those strategies are permeating from the therapeutic world into public schools, which are often the front line in mental health care. At Kohala Middle School, behavioral health specialist Lauren Canton says they try to approach behavior challenges through education and counseling.

“If a child gets angry in a classroom and throws a chair, we ask ourselves, ‘What’s the reason that this child threw a chair? Do we need to address their trauma history? Do they need to learn emotion-regulation skills? Do they need an anger-management program?’ ” The goal is to reshape behavior and put students on a healthier path for the long term.

Building Resilience

Winquist’s first job in social services, after earning her master’s degree at the University of Chicago, was at a residential care home outside the city.

“In the mental health world, this is like going to war,” she says. Many of the youths had been kicked out by multiple foster homes and were in the facility of last resort. She loved the work.

“That was probably the most amazing job I’ve ever had,” says Winquist, “because that’s where you believe in resilience. And you learn to find it for kids.”

One of the boys at the facility was 13 when she met him, and large for his age. She says he rarely spoke and that he carried the emotional scars of a horrific childhood. “But he had these moments when you realized that he just wanted to be a little kid and have fun.”

She slowly got him to play basketball with her, to draw together and build Jenga towers, which is a practice she still uses today with her young clients. Once, he stole a package of M&Ms so he could split them with her.

“He just wanted to connect with a human, and I realized that people’s humanity is really that basic, and resilience starts when you can build a relationship with a person.” That lesson sticks with her as she guides young people through tumultuous years in a tumultuous age.

But like all the professionals Hawaii Business interviewed, she worries that there aren’t enough clinicians in the Islands. The problem runs deep, from overbooked therapists in private practice, to underpaid and understaffed nonprofits and government agencies, to not enough professors to educate the next generation.

The shortage is worse on the Neighbor Islands, where mental health needs can also be serious. In 2022, Child & Family Service’s crisis mobile outreach team, which makes personal assessments based on calls to a hotline, saw 50% more Hilo youths than the year before, and 33% more in Kona.

Charmaine Higa-McMillan, Ph.D., a clinical psychologist who runs the master’s program in mental health counseling at UH Hilo, says the difficulty finding mental health care can have long-term consequences.

“I’m really worried about the average child who may not have supportive families and may be suffering in silence,” she says. “That, combined with access problems, really concerns me for the future and what it’s going to be like for them as they become young adults.”

Part 2: The Rocky Path to Becoming a Mental Health Provider

College graduates face formidable training requirements and few positions that pay, while experienced providers struggle to keep pace with Hawai‘i’s high cost of living.

When someone asks Charmaine Higa-McMillan, Ph.D., for a recommendation for a therapist, she gives them 10. That’s not so they can vet and choose, but because more possibilities mean a better chance to find someone who is taking new clients.

For one thing, mental health needs far outstrip the supply of providers. Even physicians are scrambling to find them for their patients. Seventy-eight percent of doctors in Hawai‘i say mental health providers are the most-needed specialty, followed by psychiatrists at 73%, according to the 2022 Access to Care report. The shortage is particularly acute on Neighbor Islands.

Another factor driving the shortage is the sheer time and effort involved to become a certified therapist. The most arduous path is to earn a doctoral degree in psychology or go to medical school for psychiatry. Others take the master-degree route in fields such as social work or mental health counseling. From there, it can take years of training under supervision and passing state exams to get licensed.

Higa-McMillan is program director of the graduate counseling psychology program at UH Hilo. The program accepts just 20 master’s students a year, about three-quarters from Hawai‘i. The students are required to live in the Islands but take classes online.

Students pay full tuition – $5,868 per semester for Hawai‘i residents, $13,284 for nonresidents – as the doctoral-level psychology program at UH Mānoa gets the graduate-assistant jobs and tuition waivers, says Higa-McMillan.

Despite that, the UH Hilo program receives lots of applicants and would like to expand to 30 students, says Higa-McMillan, but the department is down by two positions. Like the rest of the university system, hiring requires special permission, and a request is in for funding to fill the jobs and create an additional faculty position.

One of Higa-McMillan’s current students is Christina Swafford, who is finishing the two-year master’s program in clinical mental health counseling. In the practical portion of the program, she was placed in a temporary paid position offering online counseling at the Hawai‘i Center for Children & Families, a group practice in Kapolei.

Swafford loves the job and the young people she counsels, but when she graduates in May she has to leave it behind. With just a master’s degree, this private-practice employer she interned with can’t bill private insurers for reimbursement for her services. Insurers will only pay after Swafford has completed 3,000 hours of supervised professional work and been certified as a licensed mental health counselor. That’s a year and a half of full-time work.

(House Bill 1300, which didn’t pass at this year’s state Legislature, would have allowed insurance reimbursements for mental health services provided by a supervised intern, as well as for people with some provisional licenses.)

Her next job, then, needs to be a nonprofit or public-sector job that doesn’t rely on private-insurance reimbursements to stay afloat. The other alternative is charging out-of-pocket fees, which many people can’t or won’t pay, or paying a provider to supervise her work.

Swafford is stuck in limbo, hoping for one of the few paid positions to complete her 3,000 hours of supervised experience, but knowing that she might have to return to Oregon, where she grew up, or move somewhere else.

Nonprofits Are Underfunded

If she’s lucky, Swafford might land a paid postgraduate position at Child & Family Service, which is near the employer she had as a graduate student. This nonprofit organization in ‘Ewa Beach has been in operation since 1899 and works with vulnerable communities across the Islands.

“(State) funding has been stagnant for years and years … impeding our ability to provide mental health services.”

– Karen Tan, President & CEO, Child & Family Service

Swafford would be thrilled with that. But after completing her lengthy training, she would face the same dilemma that many therapists and teachers and social workers face: low pay, made worse by the exorbitant cost of living and burden of student-loan debt.

Child & Family Service, for example, gets its funding from about 120 state contracts, but the dollar amounts have been flat for ages, says Karen Tan, the nonprofit’s president and CEO. She and about 50 similar organizations have formed a “true cost coalition” that is advocating for more state funding to cover rising expenses, particularly salary boosts.

“Funding has been stagnant for years and years and years, which is impeding our ability to provide mental health services and why people are leaving and why there’s a backlog,” says Tan.

“These are well-educated, highly skilled clinical folks, and we’re paying them what the state contracts allow us to pay them,” she says. “It’s almost like, ‘You chose that career, therefore you must suffer.’ ”

Three of her staff recently announced they’ve accepted federal jobs in Hawai‘i, which Tan says are typically positions with the military.

“So you’re pulling clinicians away from the greater community in Hawai‘i because the federal government actually pays a livable wage,” says Tan. She notes that her top clinical position only recently cleared the six-figure threshold.

While she’s had to cut staffing and reduce services in some areas, she says that “fortunately, we’ve got enough compassionate staff that say they’ll do it even though the salary is so low.”

Swafford could also try to find postgraduate experience with state agencies, such as the Department of Education, the Department of Health or Child Welfare Services. But for many, that turns into a short-term option.

Based on anecdotes from the field, Higa-McMillan thinks that people often jump ship when their training hours are completed and license secured. “Once they get licensed, then they can leave and start billing private insurance to get paid a higher rate,” she says.

Reimbursements from the federal Medicaid plan are significantly lower, making it harder to accept many low-income Med-Quest patients in Hawai‘i and harder for patients to find help.

Staffing Problems

At the state Department of Health’s Child and Adolescent Mental Health Division, Jamie Hernandez Armstrong, Ph.D., the chief psychologist, cites struggles with staffing and finding outside providers. The Department of Health overall had a 24% job vacancy rate as of April.

Armstrong’s division works with youths with severe mental health challenges, including early-onset psychosis. Almost half of her clients are Native Hawaiian.

Her team of about a dozen psychologists and a handful of psychiatrists works at family guidance centers on O‘ahu, Maui, Kaua‘i and Hawai‘i Island, treating young people directly and helping to connect them with the appropriate services.

Some of the providers they contract with include Child & Family Service, Catholic Charities of Hawai‘i, Hale Kipa, Aloha House and the Bobby Benson Center. But outside providers are stretched thin and face staffing problems of their own.

“Prior to the start of the pandemic, we were serving around 2,500 kids at a time, and now we’re serving closer to half those numbers,” says Armstrong. “Part of the struggle is that there’s a lack of mental health providers, and sometimes kids are waiting for a long time.”

Another reason she thinks her division can’t find outside providers is that many are leaving intensive, in-person therapeutic environments for telehealth. Telehealth, she says, doesn’t work for her clients, who, at the lowest level of care, see a therapist for multiple hours a week in their homes.

Tan confirms that, as a licensed clinical social worker, she receives a barrage of telehealth offers. “I get emails all the time saying, ‘Come work for us. You’ll make $110,000 a year doing online counseling.’ I can imagine someone saying, ‘I think I’m going to go do that.’ ”

Other providers stay in their state positions but take second jobs to make ends meet. “I know a lot of clinicians who work for the government and they also work in private practice, which is just wild to me,” says Swafford. “For many people going into the field, the plan was to have just one career.”

At Kaiser Permanente’s Waipi‘o clinic on O‘ahu, Andrea Kumura, a licensed clinical social worker who works primarily with children and teens, says her clinic has been short-staffed for a decade, even as demand for services has spiked. When kids returned to school, it triggered a wave of social anxiety and academic stress after so many months online, she says.

Kumura has 85 clients and sees 27 of them each week. It takes two to three months to schedule an initial appointment, and follow-up appointments take six to eight weeks to schedule. For regular patients who need twice-monthly visits, appointments have to be made two months in advance.

“It’s nearly impossible for teens to get weekly appointments, which is the frequency that many need,” she says.

Kumura was on the picket line during a 172-day strike that ended in February, which is considered the longest work stoppage of mental health care workers in U.S. history. She’s glad to see many of her patients again, and happy that more employees are being hired.

But she says Kaiser is still filling the vacant positions of people who left permanently, and her caseload would need to be halved to give young people the attention they need.

Prioritizing Mental Health

Hawai‘i’s priorities are often misplaced, says Tan, and the worsening state of mental health among its young people is a testament to that.

“I’m a firm believer that where you spend your money is where your value is,” she says.

With years of experience in social services, she views many mental health issues as byproducts of poverty and family struggles. Communities in distress create young people in distress, she says.

Tan wants to see more investment in preventive “upstream” services before crises erupt, and higher pay so that the field attracts and retains the best people. And given the huge number of young people who struggle with anxiety, depression and suicide ideation, the usual excuses fall flat.

“Someone will always say, ‘There’s so many demanding needs,’ ” says Tan. “Well, tell me one person whose child is suicidal who would say, ‘Go fill that pothole. That’s much more important than my youth.’ ”

At first glance, Jane thought the Kapolei Lofts seemed like a decent place to live. The 17-acre property’s 499 units were spread across 14 modern, low-rise buildings, and it had a gym, pool, walking path and community park.

She had grown up on O‘ahu and lived in apartments all her life, and what she liked most about this complex was that it was new and 60% of its units were restricted to renters making less than 140% of the area median income.

Then in 2018, more than a year after living there, private equity giant The Blackstone Group purchased the property for $197 million. Jane and her roommate saw their first rent increase – almost $200 a month – at their next lease renewal.

She says new fees were added over subsequent years for parking, the unit’s water and sewer, common area water, pest control and mandatory personal liability insurance. By the time they moved out last year, these charges added more than $300 a month to their base rent. She says she also dealt with disruptive neighbors and that trash littered her building’s hallway, the parking lot and dumpster area. She says management would downplay or ignore her complaints and requests to enforce the community’s rules.

“They don’t care, they only care that they get their money for their rent,” she says. “They don’t care about people that live there.” Jane is not her real name; we’re using a pseudonym because she says she fears her former landlord will retaliate against her.

Private equity firms, private equity-backed firms, firms that offer private equity real estate funds, and firms with other private equity co-investors or joint ventures own at least 1 million apartment units in the country – around 3.6% of all apartments – according to a June 2022 research memo by Americans for Financial Reform, a nonprofit and non-partisan coalition. Such landlords have a reputation for hiking rents, reducing upkeep, aggressively pursuing tenants in court, and imposing new or increased fees to extract profits from renters, according to the memo and coverage by ProPublica, Mother Jones, The Atlantic and other national media.

Altogether, Hawaii Business Magazine spoke with 11 current or former renters of local private equity-owned apartments on O‘ahu. Some had positive things to say, but many shared stories of sharp rent increases, poor upkeep of their units and common areas, numerous fees, and a lack of transparency about how those fees are calculated. We verified their tenancy by asking renters to share with us leases and other documents.

Several renters spoke with us on the condition that they not be named or that we only use their first or middle names because they worried that sharing their stories could jeopardize their leases or their work. And in some cases, current renters didn’t want us to disclose the size of their units, their rents, the number of people in their households or certain other specifics for fear of being identified.

We only heard back from one private equity firm. Blackstone says that it’s had a positive impact on its O‘ahu communities by investing in improvements, increasing regular communications with renters and helping tenants who couldn’t pay their rent earlier in the pandemic.

Corporate Landlords

Private equity firms generally acquire assets by assembling pots of money from insurance companies, university endowments, pension funds, wealthy individuals and other types of accredited investors. They typically seek 20% profits on their investors’ contributions, plus 2% management fees, according to PitchBook, a capital markets research company.

Carter Dougherty, communications director at the Washington, D.C.-based Americans for Financial Reform, says private equity firms commonly do leveraged buyouts, where they use both equity and debt to make purchases. And unlike other entities, private equity firms generally hold assets only for three to five years, so there’s pressure to extract profit for investors and pay off the debt.

“That model is what is behind all this pressure on tenants in various ways, whether it’s raising the rents, skimping on repairs or adding fees,” he says. “Behind all those bad things is the private equity model of debt, of wealth extraction.”

These firms have traditionally invested in promising private companies, though since the Great Recession, they’ve also assembled vast portfolios of single-family and multifamily homes. Today, they are some of the largest corporate landlords in the country.

Private equity’s presence in Hawai‘i’s multifamily market is relatively new. The earliest record we could find was from 2003 when California-based The Bascom Group purchased what is now known as the Oasis Townhomes. Mark Bratton, senior VP at Colliers International Hawaii, says private equity and other institutional investors aren’t very active here because Hawai‘i only has about 30 market-rate residential properties with more than 100 units.

Private equity firms typically want larger deals – $50 million or more – for investments to be worth their time and efforts, he adds. Plus, Hawai‘i has to compete with other, more attractive markets on the mainland. Colliers Hawaii tracks local multifamily transactions with sales prices over $1 million.

Blackstone is currently the largest private equity landlord in the Islands, controlling 2,700 apartment units across the Kapolei Lofts, The Element, Kapilina Beach Homes and Kalaeloa Rental Homes. It uses Greystar as its property manager. Waterton Associates, which describes itself as a real estate investment and property management company based in Chicago, owns about 530 units at Waikele Towers and Oasis Townhomes in Waipahu and Palms of Kilani in Wahiawā. We include Waterton as a private equity landlord because its $1.5 billion Waterton Residential Property Venture XIV fund is categorized as a private equity fund in its filings with the U.S. Securities and Exchange Commission. That fund was used to acquire two of its Hawai‘i apartment complexes.

Priced Out

On a weekday afternoon, the streets of the Kalaeloa Rental Homes are mostly empty. Cars are parked in their driveways or under their carports, and the former military-housing apartments built in the 1970s and 1990s show no activity, save for palm trees blowing in the wind. Starting rents in December ranged from $2,900 for a 2-bedroom, 1-bathroom unit to $4,200 for a 4-bedroom, 2.5-bathroom townhome.

Tiare and her family have lived in one of the 3-bedroom townhomes for several years, enjoying proximity to her kids’ schools and extended family. She’s also felt safe because security personnel drive around at night and the community is separated from the rest of Kapolei. Their rent was a little pricier than what they were used to and would increase at renewals before Covid, but it was still manageable.

That changed after the pandemic-related eviction moratorium expired. Her rent increased almost 14% at her 2022 lease renewal, she says. The community’s office told her the increase reflected the unit’s market value. She had a couple of months’ notice, but a job loss during Covid had depleted her savings and other rentals were charging even more, so leaving Kalaeloa Rental Homes was not an option.

“We’re still just suffering because of the rent being so high,” she says. “And it’s like OK, I have other bills that got messed up and you have to choose what is the better thing to make a payment on. Are you going to make your family homeless because you’re not going to pay the rent on time, and they’ll charge you all the attorney fees and all these extra percentage of fees because it’s late?”

Joshua Abiva and his family moved out of their two-bedroom Kalaeloa home last fall after only a year because their rent was expected to increase by $700. He questioned the landlord’s reasoning when he saw that an identical unit had been listed for $2,800 a month – $700 less than he was expected to pay.

“If that’s the case then we have to move out because I don’t know who can afford $3,400 and that’s not even including the utilities, and it’s not even our own home,” he says.

He, Tiare and other renters we spoke with say they know several local families that left Kalaeloa and the other Blackstone properties because they couldn’t afford the rent hikes.

Starting rents at the Kapilina Beach Homes vary from $2,900 for a 2-bed, 1.5-bath unit to $3,300 for a 4-bed, 2.5-bath townhome. The community comprises both military and civilian families. One renter we spoke with shared screenshots from the Kapilina resident Facebook group. They show that rent increases of several hundred dollars occurred prior to Blackstone’s ownership. Since late December 2021, when Blackstone acquired the property, renters have shared increases on the Facebook page ranging from $90 to $600.

One renter, a single mom, told us it seems common for residents to leave after one year because of the high increases. She had moved her family from the mainland because she wanted her kids to grow up in a safer, more laidback community. She has anxiety about having to move again.

Eight miles mauka at The Element, starting rents range from $2,300 for a 1-bed, 1-bath unit to $4,200 for a 3-bed, 2-bath unit. One renter told us their rent increased 14% last year. “Who can afford that?” the renter asks. “I’m just like, wow, y’all are greedy.” This renter did not want their exact increase or unit type specified in the article for fear that management could identify them.

That renter says the military presence in Hawai‘i also contributes to the high rents at The Element and other area properties. Military service members on O‘ahu receive a basic housing allowance, which in 2022 ranged from $2,000 to $3,900, according to the Department of Defense. Those with dependents and those with higher ranks have housing allowances on the higher end of the spectrum.

“To me, these then are not built for local residents,” The Element renter says. “So my biggest question is, where do we go? What do we do?”

‘Sucking Us Dry’

Hawaii Business Magazine reviewed about 10 leases from the apartment properties owned by Blackstone and Waterton. These documents were 30 to 50 pages long, depending on the included addendums. And while they included the fees that renters would have to pay, several tenants we spoke with said they felt these fees were hidden among the dense language of their leases, and that the properties’ staff were not transparent enough about what the fees would cover and how they’re calculated.

The types of fees and their amounts vary from property to property, but renters are typically on the hook for parking, pet fees, common area maintenance, electricity, water, sewer, trash, pest control, late fees, and new payment account fees and monthly billing administrative fees for utilities, among others. Residents pay their utilities to a third-party company, rather than directly to the utility companies.

Photo: Getty Images; Photo Illustration: Kelsey Ige

Tiare, the Kalaeloa Rental Homes renter, says her utility bills come to about $900 a month. She says her monthly bill doesn’t tell her how much electricity or water she uses. She says she has to request that information, which provides meter reads and usage, plus the charges for each utility and fee. Her unit is supposed to be submetered, and her building has solar on its roof, but she doesn’t know where the meter is so she can verify that her bills are accurate.

Abiva, who used to live in the Kalaeloa Rental Homes’ Kaimana apartments, says he would spend about $600 on his utilities. One of his bills from spring 2022 showed that he was being charged about $400 for electricity, $115 for sewer and $55 for common area maintenance, $25 for water, plus a $5.50 service fee.

The Kalaeloa Rental Homes made the news in 2016 for having similarly high utility bills – ranging from $600 to over $1,000 – though it only seemed to impact the Kaimana apartments. The 120 units didn’t have separate electrical meters, so bills were based on square footage and the number of occupants. The former owner, Boston-based real estate private equity firm Rockpoint Group, later installed individual electrical meters at each home and solar panels on most buildings.

A LivCor spokesperson wrote in an email that some residents directly benefit from its solar infrastructure and that their team is working on plans to expand the solar capacity at all its properties. LivCor is a Blackstone portfolio property responsible for the asset management of Blackstone’s multi-family communities.

A couple that lives at the 50-unit Waikele Towers say they’ve seen more fees added to their bills over the years. The owner before Waterton required them to pay taxes, which were added to the base rent; mandatory renter’s insurance; maintenance fees; common area fees; and a pet deposit. Then, when Waterton came in, they also had to pay for common area electricity and a share of the building’s water. There’s also a $75 monthly miscellaneous charge, but they don’t know what it’s for. They’ve asked management to explain the fee, but management didn’t provide a straight answer.

“They would say, ‘this is your amount you have to pay regardless,’ ” one of the couple says. “ ‘This is the amount that we’re charging you.’ Basically, ‘if you don’t like it, you can leave.’ Basically, just they’re saying like we had no choice to pay these without any explanation.”

In total, the fees added about $300 to their base rent. They later pushed back against some of the fees and no longer have to pay for all of them, but they say they still feel exploited by their landlord.

“They’re just sucking us dry,” one of the renters says. “It’s to the point where, like, we’re worried … because it’s just every turn, it’s like, ‘You guys owe us more money, you guys owe us more money.’ ” They have wanted to leave Waikele Towers for a while but were stuck during Covid and relied on rent assistance to pay their bills. They’re planning to move as soon as their lease ends.

They admit they didn’t read their most recent lease renewal as well as in prior years, so they missed the new addendum adding common area electricity and water to their bills. They say their lease wasn’t misleading, but it wasn’t very clear either.

“We’re not just concerned about us, we’re concerned about everyone else in this building that’s being affected, and they might not realize what’s happening… they might not be as attentive to things,” one of them says. “So I’m really worried about the other families and the future families and even the past families that were here that kind of got screwed over by these people.” Waterton and its local partner and property manager, Tower Development, did not respond to multiple requests for an interview.

Dan O’Meara, Honolulu consumer and housing managing attorney for Legal Aid Society of Hawai‘i, says renters don’t always have time to read through complex, lengthy legal documents. The nonprofit serves low-income clients, including some at the Palms of Kilani who also have issues with numerous additional fees popping up on their leases.

The Blackstone and Waterton leases are based on templates from the National Apartment Association. Their utilities addendums include brief descriptions for how a tenant’s utility costs are allocated. They might say that the electricity is submetered, for example, or that a tenant’s allocation is based on the number of people residing in the dwelling unit, the square footage of the dwelling unit or a combination of the two. But if the allocations are not based on renters’ actual usage, there’s no clarification as to whether tenants are sharing in the costs for utilities in vacant units. O’meara calls the fees “insidious.”

“What happens is you think, ‘OK, $1,900 for this. OK, sounds good,’ without realizing when you add in things that you normally wouldn’t be paying for, like water, sewer, trash, common area maintenance fee and this administration fee, you might be paying an extra $150,” he says. “It’s really, apples to apples, you’re paying closer to $2,100 rather than $1,900 for your rent.”

He says he’s seen other corporate landlords charge tenants numerous fees. Tenants would benefit if landlords were required to disclose estimated ranges for how much various fees will cost, before lease signing.

In an email, Julio Morales, senior VP of asset management at LivCor, wrote that rents and fees are “thoughtfully set” to ensure they can provide a high-quality living experience.

“Fees are comparable to similar apartment communities in the area – some fees are prorated based on unit size, and all are disclosed at lease signing before a resident moves in and are itemized for transparency,” he wrote. We reached Blackstone and its portfolio company through its local public relations company, Bennet Group, and they requested that we email them a list of questions.

Justin Tyndall, a UHERO assistant professor, says landlords typically charge as much as they can, regardless of whether they are private equity or not. Private equity landlords, however, have more tools, personnel and data to act faster and more aggressively than smaller landlords, he says. For example, owners of apartments with artificially low prices might suddenly impose large rent increases if they find it will yield larger returns.

“I think their incentives are pretty similar to a mom-and-pop landlord but the speed with which they make reforms is going to be different,” he says.

Tiare, the Kalaeloa renter, says she wishes her landlord was more supportive of local families and their struggles to stay in Hawai‘i. “We’re in a situation where we have no choices, we don’t have options,” she says.

Frustrations With Upkeep

Kapilina Beach Homes sits on 392 acres of Navy land at Iroquois Point. The more than 1,400 units are former military housing built in the 1960s. The community has been renovated since it transitioned to private ownership; one of the major projects was the construction of a new community center with a fitness center, kitchen and business room. Shoreline restoration work was completed under California-based Carmel Partners, the real estate investment firm that owned the property between 2012 and 2018. Carmel Partners also renovated the units with new flooring, countertops, cabinets and other additions.

Joshua Klaassen says he enjoys living at Kapilina. He is a special education teacher at Ewa Makai Middle School and has lived in a 3-bedroom single-family home at Kapilina for about seven years. The community was originally recommended to him by a coworker. He says he hasn’t encountered large rent increases or had issues with maintenance like some other residents. He says his rent increases have always been manageable, and he hasn’t noticed any differences under the property’s different owners.

Since he’s lived there, the community has opened a splash pad, dog park, and a community center with a pool and fitness center. His family’s favorite amenity is the pool. And he likes that the community has grassy areas between the single-family homes, which is different from many other ‘Ewa neighborhoods that are located closer together.

“What I like about it is it feels like a safe community,” he says, adding, “The speed limits throughout the neighborhood are 15, so … I don’t worry too much about having my kid play outside and ride his bike up and down the streets of the neighborhood.”

A playground at Kalaeloa Rental Homes | Photos: courtesy of Blackstone

But other renters we spoke with say the homes need a lot of work. Renters in the Kapilina residents Facebook group have posted about plumbing issues, broken appliances and pests. And they relay their frustrations when Kapilina takes awhile to address them or makes things worse when doing repairs.

The single mom at Kapilina who spoke with Hawaii Business Magazine says paint peels off her single-family home’s walls: “It’s like they’re doing Band-Aids on everything, and you can only do that for so long,” she says. “The homes desperately need to be renovated.”

She also says she’s had termites crawling and flying inside her home. She says it took over a week for Kapilina to send someone to inspect the place. Once that was done, the company refused to fumigate and were only willing to replace a damaged built-in wooden structure. And when she had mold in her home, she says, Kapilina failed to take her concerns seriously and showed no sense of urgency.

“They continuously bank on people not knowing their rights, being stuck here and unsure where else to go, and being constantly terrified of the rent going up,” she says. “So in a sense, I’d venture to say the majority of people here feel held hostage by the conditions and treatment of management.”

Xavier Bonilla, who moved out of Kapilina in March 2022, says maintenance workers were supposed to paint over a patched wall from a burst pipe in the four-bedroom townhouse he shared with four other adults and two kids. The maintenance staff was quick to fix the pipe and patch the wall, but once Blackstone took over in January, they never returned to paint. The wall was still unpainted when he moved out.

Bonilla is also a plaintiff in a class action lawsuit against Kapilina Beach Homes. The lawsuit originally asked the company to stop charging for rent and water when water was contaminated by fuel leaks at Red Hill between December 2021 and spring 2022 and waive exit fees if residents broke their lease. The lawsuit is now in federal court and seeks an unspecified amount of damages, return of rents and other remedies guaranteed by the Landlord-Tenant code, and attorneys fees and costs.

Tiare, the Kalaeloa renter, says she has dealt with rats in her walls for years. She says she’d hear them scratching and squeaking at night, which gave her anxiety and prevented her from sleeping. Sometimes, they’d also run across the floor.

She says she’d call the Kalaeloa office monthly, and maintenance staff members would give her a couple of traps to put outside her home. But they would only send their pest control worker on regularly scheduled days, so she’d sometimes have to wait a week for the traps to be re-baited. Frustrated with their slow response, she finally asked maintenance in 2022 to seal off the area where rats were entering her home.

It’s helped, and she says it’s understandable that the area has rats because there’s a lot of trees nearby, but she’s disappointed it took so long to address the problem. She also had to buy her own traps because she says she needed more than the few that maintenance gave her. One month, she caught nine rats in traps, she says.

“Never would I imagine five years ago that we’d be paying this much money in rent for problems,” she says.

Rob Harper, head of Real Estate Asset Management Americas at Blackstone, wrote in an emailed statement that the company is “immensely proud of our track record in Hawai‘i, prioritizing our residents’ well-being while making a positive impact in West O‘ahu.”

He added: “We have invested more than $17 million to improve our communities, boosted on-site staffing levels by 10%, increased regular communication to residents and introduced popular activities free of charge. Importantly, during the pandemic, we suspended evictions for nonpayment of rent for over two years and instituted generous support programs to help local families most impacted. Our commitment to being good owners and neighbors has resulted in a 22% increase in resident satisfaction rates as compared to the prior ownership.”

State and federal laws prevented landlords from evicting tenants for non-payment of rent. The state eviction moratorium was in place from April 2020 to August 2021, and the federal one from September 2020 to October 2021.

Morales of LivCor, the Blackstone portfolio company, wrote that the $17 million investment included critically needed maintenance work, apartment renovations, and enhancements to shared spaces like parks, pools and gyms. More work is planned for 2023 and beyond, including efforts to make its communities more sustainable.

Shoreline at the Kapilina Beach Homes | Photos: courtesy of Blackstone

Other Impacts

Blackstone says it has had other positive impacts on its Hawai‘i communities. LivCor, the Blackstone portfolio company, wrote that it also developed a rental assistance advisory program to help residents apply for rental assistance and allow them to pay past-due rent via payment plans. The company also waived late fees and credit card fees, and allowed greater flexibility on lease breaks, transfers and roommate changes.

And during the Red Hill water crisis, the company provided each household with a $1,000 grant to help with disruption-related costs, waived termination fees and water service charges through April 2022, delivered water coolers and jugs, offered free compostable serving items and utensils, reimbursed off-site laundry service costs, and arranged access to off-site shower facilities, Harper wrote.

A LivCor spokesperson also wrote that the company has “serious concerns with the integrity of (Hawaii Business Magazine’s) survey results given the sample size reflects a tiny fraction of our resident population and the publication took no meaningful steps to assure that those commenting even live in or have ever lived in our communities during our ownership period.”

Hawaii Business Magazine issued a call on our website and social media channels to help us find renters who lived at private equity-owned apartments. We also found renters by talking with community members. We asked Blackstone via its public relations firm to provide us with tenants who would be willing to speak with us, but they did not provide any. We verified that the 11 renters we spoke with lived at these properties during the companies’ ownership periods by asking renters to share with us their leases and other documents to verify tenancy.

We also spoke to two people who were happy with their rentals, and we have included their comments. For example, mom-of-two Rhee moved her family to O‘ahu shortly after the pandemic began. They had previously lived in Northern California and wanted to be around water and live in a place with more stable weather.

They moved into a 2-bed, 2-bath unit at the Kapolei Lofts. Rhee says it was hard to adjust to a new home and new community during the pandemic, but she enjoyed living at the Lofts. She says she often spent time at the property’s pool, and that she loved that staff hosted a virtual paint night, socially distanced gift-wrapping events during the holidays, virtual scavenger hunts around the community and breakfast events.

“Every time I do drive by, I’ll go, ‘Oh look, our first home,’ and I always smile because I made it as best as I possibly could and it really was a good experience,” she says. She and her family have since moved into their own home.

Bratton, the VP at Colliers International Hawaii, says private equity and other institutional investors have had positive impacts on Hawai‘i’s multifamily market because they’re providing better products.

“The vast majority are always reinvesting right away, trying to lift up the quality of the product for rental housing,” he says.

He and his team worked on Waterton and Tower Development’s January 2022 acquisition of the Oasis Townhomes. Both companies strategies include making upgrades to their properties. According to Colliers’ Hawai‘i investment report for the second quarter of 2022, the Oasis Townhomes was in the midst of a more than $20 million renovation. Bratton adds that the property will soon have a new name.

Read about the design for this story here.

Small Share of Rentals

Private equity landlords own a small portion of O‘ahu’s overall rental stock. According to the U.S. Census Bureau, there were an estimated 183,000 renter-occupied housing units on the island in 2021.

Deja Ostrowski, an attorney with Medical-Legal Partnership for Children in Hawai‘i, wrote in an email that she’s concerned about private equity’s presence here because it controls some of the larger projects that Native Hawaiian and Pacific Islander families need.

And with 2,700 units in the ‘Ewa/Kapolei area, private equity may be the largest landlord in West O‘ahu. There are an estimated 10,700 renter-occupied units in the 96707 and 96706 ZIP codes for Kapolei and ‘Ewa Beach, according to the Census Bureau’s 2020 five-year estimates. Numbers for 2021 were not available.

Dougherty, with Americans for Financial Reform, says when private equity firms buy a bunch of units in a particular area, it creates a small monopoly within that neighborhood: “If you own them in a small geographic area where there’s a captive audience where they need to live there, then … you’re narrowing people’s choices,” he says.

In some cases, like when private equity takes over all of the older, more affordable sources of rentals in a community, fixes them up and then charges higher rents for the higher-quality units, that presence can cause entire neighborhoods to no longer be accessible to certain tenants, says Mad Bankson, housing research coordinator with the Chicago-based non-profit Private Equity Stakeholder Project.

The stakeholder project aims to empower communities impacted by private equity investments. That has included helping renters get their corporate landlords to address repairs, neglected maintenance, and to halt or slow evictions and rent increases. Jordan Ash, the nonprofit’s director of labor/jobs and housing, says it’s hard to fully measure the impact that private equity landlords have had on tenants because many tenants are afraid to speak out. Those who have worked with the Private Equity Stakeholder Project tend to be part of an organization, like a tenants union.

Photo: Getty Images; Photo Illustration: Kelsey Ige

Ostrowski wrote that Hawai‘i needs to have a serious conversation about housing security and tenant rights: “We need massive law changes that will prevent rent gouging, regulate how much a landlord can increase rent, require landlords to have cause to evict someone, allow people a grace period rather than 5 days before an eviction filing or 45 days to vacate a unit,” she wrote.

“We need a workable way to withhold rent from a landlord that isn’t repairing a unit rather than requiring a tenant to bear the cost of that themselves first. We need to abolish laws that require a tenant to risk paying legal fees if they challenge a landlord who has an uninhabitable unit. We need to fund tenant union programs and our landlord-tenant hotline and DCCA to actually regulate bad landlords.” DCCA refers to the state Department of Commerce and Consumer Affairs.

Retaliatory rent hikes and evictions are prohibited by the Landlord-Tenant Code, but the main way for tenants to dispute them is to go to court. According to DCCA, its Office of Consumer Protection may initiate investigations based on complaints, but, generally, the office is constrained by law from instituting legal actions on behalf of individual tenants.

State Rep. Troy Hashimoto is the vice chair of the House Committee on Housing. He says that the topic of private equity landlords hasn’t become a big enough issue for the Legislature to address, but legislators are aware of it. He says his committee is focused on monitoring how the expiration of Covid rent relief will affect the overall rental housing market.

Philip Garboden, affordable housing professor at UH Mānoa, says Hawai‘i needs to create more lower-income, subsidized housing, especially when in the state of Hawai‘i there are many mechanisms to make existing housing more expensive or create new luxury housing.

One legislator who has been vocal about the need for public housing is State Sen. Stanley Chang, who has proposed several bills over the years to create a program in which the state would provide low-cost, high-density, for-sale leasehold housing on state lands.

“Those who would focus on a purely private sector solution to our housing shortage, I think, are ignoring the fact that there are a lot of problems that come with these really aggressive private sector investors and landlords,” he says.

He adds, “The reality is until we start building 10,000 homes per year, we are going to see more outside investment in our real estate market, we’re going to see more people forced to move outside Hawai‘i.”

A Whole Lot of Stress

Some of the current and former renters we spoke with say they felt trapped living at the Blackstone and Waterton properties. Jane, the former Kapolei Lofts renter, says the property’s rule was that tenants must give 60 days’ written notice to break their lease and pay a lease buyout fee of one month’s rent. The Waikele Towers renters’ 2022 lease showed that they would also have to give 60 days’ notice, and their buyout fee would be two month’s rent.

O’Meara, the Legal Aid Society attorney, says that 60 days’ notice is uncommon in Hawai‘i leases. And one of the challenges for renters is that the 60 days’ notice isn’t contemplated by the state’s Landlord-Tenant Code.

“The Landlord-Tenant Code doesn’t address if you’re cutting out during the term of your lease, other than you’re still liable and that’s where there’s a duty to mitigate on the landlord’s part,” he says.

Photo: Aaron Yoshino; Photo Illustration: Kelsey Ige

Tenants could transition to a month-to-month agreement because the Landlord-Tenant Code allows month-to-month renters to provide only 28 days’ written notice. But those we spoke with say that shorter-term leases can be $100 or $200 higher each month than yearly agreements.

At Kapilina, the single mom we spoke with says she is basically waiting every day for whatever issue comes next.

“We want to be happy here because our kids are happy and it’s an enclosed community,” she says. “But there are many issues, and it’s hard to feel comfortable living in a community where the management actually does not care about you.”

She says she feels exploited by her landlord and wouldn’t have moved her family from the mainland if she knew what living at Kapilina was going to be like beforehand.

“It’s a whole lot of stress and worry for people because you just never know what’s going to happen from day to day,” she says. “And hearing this is so widespread in communities that are owned by the same corporation is not comforting at all. It’s good to know so that we can avoid those properties if we do have to move.”