 Welcome to Inside Hawaii Real Estate, a show dedicated to providing up-to-date information news to Hawaii home buyers, homeowners, and investors. I'm Will Tanaka with my co-host, business partner, and wife, Leone Lam, a realtor with over 20 years of experience in various leadership roles in the Hawaii real estate industry. Thanks, Will. Will is a full-time realtor with a background as a lawyer, and he also used to lead a Hawaii title in Astral Company. And Will and I work as a team to keep you informed about the latest in Hawaii real estate. And you know, being born and raised in Hawaii, I believe and understand that Hawaii has a very special and unique history all around our state. You'll find very special historic places, monuments, architecture, and historic homes. So today, we're going to be discussing with a very, very special guest about buying or selling a historic home in Hawaii. We're so honored to have Kirsten Faulkner, the Chief Executive of Historic Hawaii Foundation. Kirsten oversees all aspects of its preservation programs, strategic planning, business lines, and even its operations. Before Hawaii Historic Hawaii Foundation, Kirsten was a senior city planner for Denver, Colorado, and she holds a master of arts in urban and environmental policy from Tufts University. She's also a member of the American Institute of Certified Planners. Welcome, Kirsten. Thank you so much for joining us. Welcome. Thank you. I'm so excited to be here with you. Thanks, Kirsten. So please tell us a little bit more about Historic Hawaii Foundation and what is a historic property? Thanks, Leonie. Historic Hawaii Foundation is a statewide nonprofit organization that will turn 50 years old next year. It was founded before. So the organization itself is about to become historic, so that's kind of exciting. But for the past five decades, we've helped people save historic places. So working with different property owners, grassroots organizations, government agencies, realtors, to identify what are the places that matter in their communities and what are some of the programs that can help them save those places. It's really for not only ourselves, but for future generations, like what can we learn from the past that can inspire the future? That's what we're all about. And you know, in terms of historic homes, how would you define? A historic home to people who have no idea what that entails. Yeah, you know, Hawaii, as Leonie said earlier, has such a rich and diverse and layered history. So even before we talk about current homes, think about how people used to live pre-contact, right? Going back in time. And this architecture of the native Hawaiians before Western contact was very much light on the land. You know, they would use, of course, local building materials. They didn't have nails. They didn't have ropes. They didn't have bracketing systems. They had stone and that and wood and became experts in putting those together to house sleeping spaces and communal living spaces and eating spaces. Really, building from that into contemporary and modern era, you can see the evolution of architectural styles and the way people always relate to the place itself, to the environment and the natural climate. And that's one of the things that makes Hawaii's architecture and design just really special is that background. So you know, what we see is daily life in Hawaii has those reminders of everyone that came before and all the generations before and all the wisdom that came before. I think that's part of the beauty as well, what we have. And you know, in real estate, I remember helping sell a 1930 home, a historic home in Manoa a couple of years ago, and I thought, oh, wow, this is, you know, the first time I've been in a historic home. So it was really fascinating. And you know, from your experience, you know, have you seen houses from like the late 1800s? Early, you know, other homes in the early 1900s? You know, the earliest historic home that still exists, obviously there were some of these pre-contact homes that is probably the mission houses home in downtown Honolulu. So it's 1820. The 1821 frame house is still there, just celebrated 200 years. And that was really the first one that brought in Western styles of architecture and materials and construction. So that's probably the oldest one. There's a few from the 1840s that are still around. But really, you don't start to see a lot of a higher count of historic homes until about the 1890s or so. And then of course, you can track it almost like a curve, you know, as we get closer in time to where we are now, you get more and more and more. So especially in Manoa, you see a lot from the turn of the 20th century up until just before World War II. So the 1920s and 30s are very richly represented. But then all across the state, you also saw a vast building boom after World War II. So a lot from the 1940s and 50s and 60s. So different eras of history, and they all have unique styles and just a way to respond to what makes Hawaii unique. So when it comes to the historic homes, can you tell us a little bit about the Hawaii Register of Historic Places? And how does that come to play? Yeah, great question. You know, getting back to an earlier question, which I'm not sure I completely answered, what actually is a historic property? So even before historic homes, there's other kinds of historic properties, right? So it kind of depends on how you define it. But if you use the definition in state of Hawaii statutes, there's two different tests. One is just straight-up age. Is it 50 years or older? And it can be a building, a structure, a site. It could be an entire district of places. It could be an object. It could be an aviation property, you know, it could be a hay out, it could be something underwater. But 50 years is the test. But you look at that and say, wow, that's a whole lot of stuff, right? So you don't want to just stop at age. You want to look beyond that. And so the state also says, well, beyond age, what else would we want to think about? And really what you want to think about next is historic significance. You know, what does it tell us about the past? Was it significant for an event or for a person or for a style of architecture or for construction technique? Or can we learn something from it? You know, is there some archaeological study or information potential? So those are more important tests than just age, is significance. And then the other test is, is there still something there, there's something left? You know, has it changed so much? Has it burned down? Has it been bulldozed? I mean, it could be significant, but not intact. And so you start to look at things like integrity. Does it have its integrity of materials and design and location and setting? So those are the aspects that really add more dimension to the idea. And then the other thing is there's different kinds of properties. There's buildings, which we've been talking about, but there's also bridges and railroads and archaeological sites and petroglyphs. You know, so there's sites and districts and objects and all of those have a story to tell and they're all part of what makes Hawaii unique and special. So it's important, I think, to understand all that. And then when you say, well, the Register of Historic Places, that's the official state list that says these are the places that tell the story of Hawaii's past. They tell us how we lived, how we learn, how we worship, how we are educated, what we can learn from, what we can teach others. And that official list is sort of a subset of all the things that could be on it. So you have to affirmatively nominate a property to be on the Register of Historic Places. It's not automatic. So there's lots of places that could be or meet the criteria to be on, including a lot of homes, but not everyone has taken that step to actually nominate them and have them listed. This is really fascinating because if you're the owner of a historic home and, you know, because it has cultural and historical significance, does that mean that you have to open up your home to the public or in some capacity, you know, have the historic and Hawaii Foundation take photos, videos? Well, what are the requirements as a homeowner of historic home? A really good question. The main obligation or responsibility is to be a good steward of place. And that's true whether or not anyone's looking over your shoulder and scolding you and saying you need to do this. We all have responsibility to places and to our community and to do the best we can with the resources we have. So I try to remind people that by being the owner of a historic property, that's an opportunity to be a good steward and to honor the people that came before you and to leave it in good condition for the people who come after you. And these places are historic whether or not they're on the register of historic places, whether or not you take advantage of any of the tax incentives or any of the programs that are available. So I guess that would be first. But beyond that, there are some incentive programs that encourage and help people to do that, to be good stewards. And one that comes to mind often is all of the counties offer a property tax reduction if you have a historic home that has been designated for preservation. So first it has to be on the state register of historic places. So not just eligible for but actually listed. And that's through a state process. And then through the county process, you can apply for this tax reduction in exchange for certain conditions. So getting at your question, well, what are those conditions? One of the conditions is that you keep it in good condition. You keep it weatherproof, you fix the roof, you treat for termites, you keep the characteristics that convey that significance in the first place. But there is no obligation to open it up to others. You don't have to allow people to come inside. You don't have to offer tours. City and county of Honolulu does require that the exterior of the home be visible from the public street. So people who want to walk through the neighborhood or drive by and have the benefit of knowing that these places exist, they need to be able to see it. So it's behind a high fence or behind a high hedge or down a private street. Then obviously you wouldn't be able to see it from the public street, right? So what City and County of Honolulu did was establish what they call alternative viewing. And on the second Saturday of every month, the property owner would have a designated viewing point where people could come on and see the house and be able to view it. So this is not because it's necessarily a historic home, but because it's a historic home getting that property tax exemption. But again, they wouldn't come into the home. It's only to that viewing point and only at certain days and times and hours and only if you can't see it from the street all the time. And you actually kind of, yeah, you kind of mentioned earlier about the tax benefits. So of course the cultural and historical aspect as a homeowner and there's also a tax benefit. And my understanding is that for the City and County of Honolulu, you know, on the island of Oahu, that tax benefit is that the homeowner only pays $300 a year for real property taxes. Is that correct? That is correct. And it's the minimum annual property tax, which of course can change as City Council decides what they think that should be. Right now it's $300 a year, but it could change if City Council changes it. But the idea is by reducing the property tax liability that frees up those resources to actually go into preserving the home itself. So taking care of those characteristics and taking care of this historic property can be expensive. And so this is a way for the City to incentivize and support that property owner investment in what's ultimately a community good. So it's very cost effective for the City because this way they, you know, they forgo some taxes, but they get the benefit of preserving 200 historic homes. But really at the property owner expense and effort. So that's the public policy idea behind it. The property owner would apply for this reduction, and then it's good for 10 years. And the enforcement comes to the real property assessment division. They have inspectors that go out, not only for historic properties, but for any kind of tax incentive. There's others as well to go out and make sure those conditions are being met. And if somebody thinks those conditions are not being met, they can, you know, call the real property assessment division and let them know and they'll send out inspectors. And the idea is that first you would try to correct it and make sure give everyone a chance to fix whatever is wrong. But then if they don't, then they can cancel the property tax incentive and then the property owner would have to pay back the foregone taxes. So, especially when a property is bought or sold or transferred, if that incentive rolls with the property, so the new owner would have that same reduction and that same obligation. But it means they have to keep up their end of the bargain. They have to continue to take care of that historic home, or they might have to pay the back taxes with interest. Oh, wow. I always want people to be really aware that, you know, there are conditions and it's a really robust program. It's got great enforcement. And it's a really great way to invest in our neighborhoods, invest in our homes, but everyone has to do their part. So don't go into it lightly. And I love how you said earlier about, you know, being a good steward of the land and the property. And I think that's such a good reminder for all of us, you know, whether you're a homeowner or even if you're renting this to be a good steward in general. And, you know, so in addition to this Hawaii when there's also, is there also a national, a national registry or something and are there any benefits that come along with that. There's a parallel national register of historic places. So the Hawaii register is obviously just the state of Hawaii. The national register is for the entire country. Fortunately, they both use the same nomination form. So you don't have to apply twice. You can do a single form and then apply or nominate the property. So the process includes, first of all, just description. Where is it? What is it? Who built it? When did they build it? What's its historic background? A description of its features, you know, how big is it? What's the massing? What's the materials? And then once that nomination is submitted, the state of Hawaii has a Hawaii Historic Places Review Board. And they're experts in historic preservation. They have architects and archeologists and historians and native fine cultural practitioners. They're appointed by the governor. They're confirmed by the Senate. They are, they take their jobs very seriously. And they hold a public meeting with a public hearing. And at the end of that process, they will decide if this property is worthy of preservation and meets all the criteria for being listed. That's at the state level. And then they can also forward it on to the national level for a similar consideration for the National Register of Historic Places. So as far as incentives there, most of the incentives at the national level are for rehabilitation of commercial properties, actually. So not as many for individual homeowners or owner occupied homes, but for rental or for commercial developments. There's this property tax, I'm sorry, it's an income tax credit for rehabilitation of historic properties. So not just because you own them and they're historic, but because you're investing in them. So one of the examples we have of this on a walk is Cunea, Cunea villages, which is the former Del Monte pineapple plantation workers housing. And of course, from the pineapple plantation closed, the entire area has now been converted to diversified agriculture, but they still need housing for farm labor, you know, and especially as we focus on agriculture and feeding our communities, you need people to do that labor, you need places for them to live. So Cunea villages took these homes that have been under resource for a very long time. They use this federal tax credit to invest in them and they rehabilitated 50 historic homes for affordable workers farm housing. It's a wonderful success story. That is wonderful. So the national site is more for commercial you're saying versus residential. Right, it has to be income producing. I see. So, so that can be rental housing that it could be retail it could be office it could be resort it could be agriculture. It just has to have an income producing use. And of course it's a tax credit so it has to be an agency that pays taxes. So for nonprofit organizations that don't have a tax liability, it's much harder to use unless they partner up with a private developer that does use it, which is what Cunea did. That was a public private. Well, I was it was a private nonprofit partnership to make this project work. I remember I feel like you had shared with me once about Holly Eva store lots is that was that something that was considered national or is that just in Hawaii. That was another really interesting one, but it was just in Hawaii, but it wasn't one of these tax credit projects. It was a property owner that wanted to revitalize part of Holly Eva town by investing in these historic properties and being able to share their significance with, you know, not only the North Shore, but all the millions of people that go to visit the North Shore. So heritage tourism is a very real reason people come to Hawaii to experience how Hawaii is different than Mexico or the Caribbean, you know this is a place with a very strong culture of very strong environment and a very strong history and people like to see that. So just to go back to about the maintenance, and you know, let's say that I'm a prospective buyer of a historic home, and you know there's jealousy windows I want to renovate the kitchen, I want to put solar panels on PV panels. How does the renovation request and approval work for the historic Hawaii Foundation and how does this perspective homeowner get approval I mean, can can they renovate, you know, remove the jealousy windows to put in, you know, more upgraded windows and can you put solar panels and how do you, you know, what kind of approval process is there. That's a really great question. The idea behind historic properties is there's not a one size fits all. All the solutions need to be tailored to the the significance and the character of that place, and what the uses. The house museum that's going to have a very different kind of level of expectation that if it's a place you live in and every day and you need to make sure you know your plumbing works in your kitchen works and your security system works and you have internet and all those things. So there are national standards that take into account all those differences. And they are easily available. We linked them from our website, but that's what's used by the state historic preservation division when they're evaluating change. So the idea is, you can make changes, you can upgrade systems that needs to be livable you need to be able to invest in it you can do solar panels you can upgrade your kitchen all those things. You need to do it in a way that doesn't destroy the character or the architectural features. And so that's where this guidance becomes important, because maybe it's the difference of where you put the panel, or what kind of window you're changing it to. Are there ways to fix the historic windows instead of just ripping them out. You know, so those are the things that would be taken into account. So it's just a normal permitting process of property owner would, if it triggers a permit, you go through the Department of Planning and permitting, they refer it to the state historic preservation division for review. And then, once they confirm that you're not destroying any of the historic fabric, then they say yes go ahead. And it's, you know, really just the normal process except for that extra step of the state historic preservation divisions review. We can point my organization we don't review permits we don't review projects that's really a government function, but we advise people on where to find these standards and how to apply them. So we won't do your project for you but we can point you in the right direction. Thank you for that clarification and in terms of renovations, we even heard of a historic property that was a, what was permitted to build a second story, even, you know, it did. Of course, follow the guidelines, you know, got the necessary approvals but they actually were able to construct the second story on the on the historic property. That can happen. It also depends on, you know, do you have enough space. So being a historic property doesn't exempt you from all the other zoning and development responsibilities so you still have maximum lock coverage maximum densities maximum heights you know all those things. But with additions what you want is something that is compatible to the historic property. So if you have a two story building and you're putting a one story edition on the back or vice versa I guess. It can be done in a very sensitive and harmonious way, but you would want to have someone who really knows what they're doing to look at that, that architecture and how it fits. So you don't want to, for example, put the addition in front of the historic facade, you know, and block the main view that wouldn't be very sensitive, but maybe on the side or to the back or something that matches roof lines or something that makes it look appropriate. And as a buyer of a historic home. So once you purchase it, you can either live there you can make it, you know, into rental second home and still preserve the historic home designation. Yes, regardless of the use right the historic designation runs with the land. It doesn't change with the owner. And actually it doesn't change with the use either. So if it's a historic home that's being, I don't know adapted to be an Airbnb or something. It's still a historic home, but they need to still get all the appropriate approvals. So if you're just doing Airbnb anywhere right you got to go through that process to, but you're right it wouldn't take away it's historic significance it would just need to be done in a way that is appropriate. Have you ever taken a historic designation from someone. Have you have you kind of overseen that before the designation. I mean, things only become more historic right they don't become less historic. So once it's recognized as a historic property. That's more or less forever. The only way to take away that designation is through basically the same process that designated in the first place you have to make a nomination it has to go to the historic places review board they have to have a public hearing. They have to take a vote and the only reasons they are allowed under law to undesignate something is if they made a mistake in the first place like they never should have done it. If they didn't follow due process in the first place if they didn't follow the procedures correctly, or if it has lost its historic significance. So if they got bulldozed or burned down or there is lost integrity there's nothing left. Guys, no it becomes historic it stays historic it becomes more historic. It's not something you do on a whim. It's not something you just. Now we have it now we don't. You have to go into this very thoughtfully and be committed. You know, Kirsten, we want to wish a very 50th almost 50th right happy birthday to historical foundation. And I love what you said about kind of inspiring the future by going back in time. And, you know, as we kind of we're actually coming to an end and swine to see if you had any final thought that you would like to share as we start to wrap up. Thank you for this opportunity and to be able to share my excitement and enthusiasm about why is historic neighborhoods. I just think the more you learn about where you're from or where you've moved to or the places we can experience the richer they are. You know so, going out and learning the history seeing the places walking around these neighborhoods can be very inspiring. And that inspiration should lead to a sense of stewardship and that's really what we want we want to be good caretakers of this place that we love. So I hope people take that to heart and they find some joy in doing that. Thank you for letting me share my thoughts on this. Very well said I love that and you know thank you for inspiring us and thank you for being on our get the wonderful guest on our show today. You were fantastic Kirsten. We learned so much and thank you. Thank you very very much. We really appreciate your Kirsten and Aloha. Thank you so much for watching Think Tech Hawaii. If you like what we do, please click the like and subscribe button on YouTube. You can also follow us on Facebook, Instagram and LinkedIn. Check out our website thinktechawaii.com. Mahalo.