 Kay Lee Akeena, president of the Grassroot Institute. Well, perhaps you've heard of the Institute and our work in Hawaii. We're an independent think tank, and we focus on issues involving individual liberty, free markets, and limited accountable government. We're nonpartisan, and we don't take any money from the government or partisan sources, and we do that because we want to provide an independent perspective that can be shared by anyone from any political background whatsoever, because our focus is on what reason talks about, what reason says in terms of research and common sense. Today, I have the privilege of introducing the year by sharing with you one of our workers in Washington, D.C., who's an island girl who's living there right now, and hopefully will be able to find a way to bring her back. But in the meantime, she serves at a distance as the policy director of Grassroot Institute. Her name is Malia Hill, and Malia and I are going to talk about what went on last year in terms of major issues in public policy. In with the old, out with the new, or out with the old, in with the new. We get a little confused here because the old seems to linger a little bit longer than we hope. We're going to talk about issues that were compelling to Hawaii in terms of public policy in 2019, as well as what to look forward to in 2020. But in the meantime, please say hello to my guest today, Malia Blomhill. Malia, welcome to the program. Hi, thanks so much for having me. It's good to be here. Well, you do such good work for the nation and for Grassroot Institute. I want to thank you. I see we're broadcasting from your kitchen there. You've got a nice room outside of D.C. Yes. Well, now I feel like I'm going to give people the wrong idea about spaciousness. But yes, we're in my kitchen. What would it take to bring you and your husband and your beautiful children back to Hawaii? And don't start negotiating your salary with me on the air. Let's talk a little more generally. Oh, this is the perfect place to negotiate. In truth, it's the same thing that everyone who's left Hawaii wants. You know, all my families there, my sisters on Oahu, I've got cousins and aunties, and I'd like nothing more than to be able to raise my kids in Hawaii. But like everyone else who left, it just comes down to cost of living and opportunities, opportunities for my husband and my family. It's just too expensive. There's no secret to it. Everyone knows it. What frustrates people is that just no one seems to be interested in doing what needs to be done to really address cost of living. Well, that's an interesting insight that nobody, or at least the people who should be doing the work aren't doing the work that needs to be done. But at least you're working on helping everyone in Hawaii understand what's going on in the economy. In fact, we have a series called Why People Left Hawaii. Do you want to tell us a little bit about that series? It's a form of communication that is putting a face on a public policy issue. Yeah, I think this is an interesting one because it's really touched people. And I know why, because it touches me. Everyone who has lived or grown up in Hawaii has family who is left or they are the family who is left. And it really hits close to home because when you see these stories on the grassroots social media or the grassroots website, you're reading about Tom and Pauline and such, but you're really reading about your cousin and your uncle and your friend from back in school. And the stories are each different and unique, but there's the same thread through it all over and over again. I love Hawaii. I love the sense of family. I love being by the beach. I miss it. And then there's always the heartbreaking part, but we needed to work two jobs. My husband and I never saw each other. We didn't have enough room to have children here. I had a better job offered in Nevada. The same story slightly different and something that I think everyone can really relate to. Well, there are many stories like that coming out every week that we hear about and publish in our publications. In fact, you're a big part of what we put out in the Grassroot Institute. We do serious research studies on major issues dealing with the economy and government transparency. And we also do cartoons, but all of that goes out weekly to people and you work with a great team. Tell us a little bit about some of the issues in 2019. Are we still going to be looking at the same kinds of issues we dealt with in 2019 as we go into 2020? Or have we solved every problem in Hawaii? Only if everything old is new again. It would be nice if we could say, oh, that's it. Checkmark, we solved that. We solved the rail. We solved constant living. We solved these problems. But the truth is, when we're looking forward to 2020, I think we'll be seeing a lot of the same big issues from 2019. So our biggest story, one of the things that we focus on so much of the Grassroot Institute cost of living, it was related to taxes and various regulations like the Jones Act. That was a big issue for us in 2019, something people are really interested in, how we can reform, update the Jones Act, the law that is about to celebrate its 100th birthday, the federal law that basically restricts the shipment of good between American ports to ships that are built in the US, flagged in the US, predominantly a US crew and owned the US. And that law is really very hard on non-continuous parts of the United States, Hawaii, Alaska, and Puerto Rico. This previous year, we saw some work done on how the Jones Act affects Puerto Rico, how it makes everything more expensive for the Grassroot Institute. For us, it was really interesting to see because there's a lot of similarities between Puerto Rico and Hawaii and how as islands, Puerto Rico, we can be smaller, but still we're so dependent on shipping for everything. Well, you know, I think you're on a good issue over here because if I were to list the top five issues that we dealt with in Grassroot Institute in 2019, Jones Act would certainly be one of them. And what you mentioned about Puerto Rico is important. A lot of people don't realize how relevant the Puerto Rico story is to what's going on in Hawaii. Sometimes we think that Puerto Rico is so remote, both in terms of its distance from Hawaii and in terms of its tiny part of being the part of the United States. What is that relevance? What is it about Puerto Rico's experience with the Jones Act that relates very much to a potential future for Hawaii? Well, I think it's twofold. First off, there's just the obvious similarity. Puerto Rico is an island. It depends very, very heavily on goods brought in from the U.S. and abroad in order to just survive. You know, almost everything needs to come to an island, and Hawaii is in the same position. But I think the other thing to take note here is that the Jones Act in relation to Puerto Rico really became a big issue more recently following a devastating hurricane. There was basically a brief waiver of the Jones Act related to Puerto Rico, so that much needed supplies to get to Puerto Rico. And when you have to waive a law to respond to an emergency, it really raises so many questions about why does this law exist? Is there a better way to do this? And in Hawaii, where we have hurricanes, where we depend so heavily on goods brought in from the U.S. and elsewhere, it really makes you ask, what is the Jones Act doing to Hawaii? How can we reform the Jones Act and help Hawaii in terms of lowering the cost of living, in terms of helping businesses that depend on the export of goods? It's a really big issue, and I think it's one that people don't understand. It's felt through the whole economy. It's not just a question of saving a little money at the grocery store. The Jones Act affects the energy prices. It affects pretty much everything that requires something to come to Hawaii or an industry that depends on goods brought to Hawaii will have a Jones Act effect. Well, what you say makes sense. It kind of begs the issue, in fact, to say that if we have to waive the Jones Act during a time of emergency to survive, why even put it back in place during normal times? But do you think that Hawaii will have as difficult a time in getting Washington D.C.'s attention to changing the Jones Act as Puerto Rico has? Because after all, we are a state, and in many ways, a favored state, a place that lives in the hearts and minds of people all over the nation who've lived here, who've visited here, who dream about coming here, who understand our history with Pearl Harbor? Well, you know, I'd like to think that we have a couple advantages. We're a state. I think it's worth noting that Representative Ed Case of Hawaii Congressman is actually in favor of Jones Act reform and has introduced legislation to reform the Jones Act. So we finally have a prominent Hawaii politician who agrees with the Grassford Institute that this is a law that is harmful to Hawaii's economy. And I think that is important as well. So I'm hoping, you know, maybe this is, you know, optimism. I don't think it's necessarily a very easy path, but I'm hoping that this really means that we're going to see the beginning of a real true bipartisan effort to update the Jones Act. Well, another issue that we've worked on at the Grassford Institute is short-term rentals. And Honolulu took some very restrictive action towards short-term rentals quite recently, and this has been very controversial. It seems to be an issue where there's often polarization between one side and the other, and very little talk about how we can balance the different competing concerns of people who have various needs. What are your thoughts on this issue? Yeah, this one turned out to be not a surprise because there has been a trend towards regulating short-term rentals in the mainland as well, but more of an interesting look at the different needs of Hawaii residents and of the way that this debate unfolded. Because I think there was this picture people had of a short-term rental operator that isn't necessarily in line with the truth. So Grassford Institute, we submit a testimony, or comments rather, on the Honolulu City Council short-term rental bill, and we did so criticizing it for being extremely draconian and for infringing upon property rights. What we wanted people to realize is that this image of a short-term operator who is extremely careless of his community and allows the detriment of the neighborhood, there are already laws to stop that, and they should be enforced. But we're not, a lot of these people, they rent out their homes because it's what helps them afford living in Hawaii. And they are a sort of business that has grown up in Hawaii that has helped the local economy. And that there should be this balance between making sure that, you know, Hawaii, our neighborhoods stay good and safe and clean. And we keep that sense of neighborhood, neighborhood-ness family. And that we also respect that there is a property right. There is, you do have the right to do something with your home. If your home, in order to keep that home, you need to rent a room a few weeks a year to a tourist, that there's a way to do that, respect the community, but also be able to make the money you need to afford your home. And that's what we are trying to balance there and help people understand that this isn't something where the government should just be rushing in with extremely high fines and heavy-handed regulation. The way various economies operate and the way the world works has changed rapidly over the last 10 years. We've seen the rise of ride-sharing, Uber, Lyft, and so forth. We're also seeing that same trend in the travel industry. People travel with a different expectation now. Do you think that our actions to limit temporary vacation rentals will have an impact upon the tourist industry? I think it almost definitely will. There was, you know, we haven't had much time go by yet since these new ordinances went into effect. But when they were doing surveys and preparation of it and when the word got out, there were our people who only come to Hawaii because they can use Airbnb or other short-term rentals who only seek out that experience who aren't interested in the typical tourist experience. As you say, you know, the world has changed, travel has changed, and there are people who either because it's what they can afford or because it's the specific experience that they want are only interested in coming here if this is an option. Well, I'll ask you a question after we take a short break and that is whether the rise of temporary vacation rentals has actually been hurting the rental market, making it harder for locals to find places to rent? If you think about that for a minute, we'll be right back. I'm Kili Ikeena on the Think Tech Hawaii show called Hawaii Together. Hello, I'm Dave Stevens, host of the Cyber Underground. This is where we discuss everything that relates to computers that's just kind of scare you out of your mind. So come join us every week here on thinktechawaii.com 1 p.m. on Friday afternoons and then you can go see all our episodes on YouTube. Just look up the Cyber Underground on YouTube. All our shows will show up and please follow us. We're always giving you current relevant information to protect you. Keeping you safe. Aloha. Aloha. I'm Wendy Lowe and I'm coming to you every other Tuesday at two o'clock live from Think Tech Hawaii. And on our show, we talk about taking your health back. And what does that mean? It means mind, body, and soul. Anything you can do that makes your body healthier and happier is what we're going to be talking about, whether it's spiritual health, mental health, fascia health, beautiful smile health, whatever it means. Let's take healthy back. Aloha. Hi, I'm Kili Ikeena and we're back on Think Tech Hawaii's Hawaii Together talking with Malia Blomhill, director of policy for the Grassroots Institute. And we're going to dive right back into our conversation. Malia, just before the break, I asked you about the impact of temporary vacation rentals on the local rental market. Some people think it's intuitive that if homes are being used to rent to visitors, they're not being used for rentals to locals. As a result, it's harder to find a place to live. But does the data show that? What have we found? You know, that's definitely something we saw a lot of claims about. But the fact is that we don't really have enough information about it. What we've seen is that a certain fairly substantial amount of those homes available for short term rentals would not be available as rental properties, especially at what I call like the more affordable lower end of the market. People either live in them part time, therefore they wouldn't be renting them as long term rentals. Or they are at a very high end of the market where it's not really going to address the whole lack of affordable housing issue. It's been debated. It's really widely, it's something that you'll see a lot of claims about. But the fact is we really need more data. In fact, some of the things we've seen suggest that rentals costs in Hawaii have actually gone down very slightly, not related to, for reasons not necessarily related to short term rentals, but which suggests that if they do have an effect on rental prices, it's not as significant as people are saying. Well, let's segue from that into the issue of affordable housing. There is definitely a shortage of housing in Hawaii, and there's a shortage of affordable housing. Certainly many politicians have come up with their own ideas as to how to solve that problem. And they range from building tiny homes to various types of communities to something called the aloha homes. Do you want to tell us a bit about that? Because we've been analyzing this. It's a new concept, but in many ways an old concept as well, one that is in practice to some extent in a land far away called Singapore. What's the issue about aloha homes? Well, aloha homes, well, it's a bit of a moving target. I should warn at once because what I'll say here may not end up being what is introduced the next time someone brings it up. But it is a program that was proposed during the 2019 legislative session, basically where the state would build homes and then sell leases for a long term lease. Sometimes it would be 99, you know, various numbers have been thrown around for how long that lease is. But let's just say a lifetime thereabouts lease. And that was proposed as the way to address the housing crisis. The Singapore model is used, you see people mentioned Singapore which had a successful version of this with a lot more conditions about what you had to do to qualify, how you could lose out, what you had to do with your money. None of those really made it into the aloha homes proposal, partially because I think you can probably question the feasibility of it or even the constitutionality of making all these requirements on someone who is trying to buy a leased home through the government. So to really summarize it, it is a government housing project. The state will build a housing project. It'll rent apartments for long, long leases that people will then buy the lease and have to keep up. But what it's done, they don't own the home. They're just getting a lease. And the idea was that this is going to somehow address the lack of affordable housing in Hawaii. It's got all the hallmarks of things that make certain politicians very happy. It's expensive. It will take a while to build. It feels like doing something. And I think that's the appeal. There are a lot of issues that need to be worked through, particularly the differences between Hawaii and Singapore where it has been fairly successful. You mentioned a few of them in terms of the qualifications. We have some other issues as well, such as the capacity of government. Our state government is facing massive amounts of billions of dollars of unfunded liabilities, whereas Singapore is a phenomenally wealthy government. There's a difference there in terms of being able to fund and see such projects as this all the way through. In addition to that, we haven't had a lot of great success showing that our state or our city government is very competent in running massive projects, whether it's the rail or the airport or our state hospital system. So there's concern about the state becoming a massive landlord as well. Those are some of the issues. We spoke a little bit earlier about why residents of Hawaii are leaving. They're leaving at an all-time high. Recently, our state's population has actually suffered some depletion of locals according to statistics. What's going on? And again, analytically, what have we found out is the cause? Well, the state has experienced several straight years of net loss, basically. Net population decline, primarily to domestic migration. In other words, people are leaving for the mainland. It's all a fancy, statistic way to say lots of people are leaving for the mainland. The last fiscal year, it was something around 13,000 people left Hawaii residents. This isn't about tourists or anything like that. Hawaii residents left for the mainland. Now, they've done some studies. They've done some surveys asking people, why are you leaving? And again, it's always pretty much the same. Cost of living too high, economic opportunity, affordable housing. And the really interesting thing that you need to note is who is leaving, because it's not the very wealthy, the very, very, very 1% or whatever. It's actually the people who, it's doctors. It's entrepreneurs. It's people that we really do need. We talk about there's doctor shortages, there's nursing shortages, there's teacher shortages. That's the group. Those are the kinds of people, people who start businesses, people who are professionals, who have this impetus to leave for better opportunity and who we very badly need to keep here. Well, in many ways, those who are leaving are leaving to seek lure oceans or greener grass, so to speak. And they tend to be those who have productive economic capacity. So when they go, they go to get jobs, they go to pursue business opportunities, and they build an economy elsewhere. In other words, Hawaii is losing the very kind of people who help drive an economy and who help build a society. And that's one of our greatest, if not our greatest resource altogether. Well, we've talked about a lot of issues so far, and we're asking the question, in terms of public policy, have we seen out with the old and in with the new? And it seems pretty evident that the old is going to stick around with us for quite a while. I've got a list of the topics that the Grassroot Institute staff felt would be big ones for the year 2020. You help put this list together. Let me just go through it real quickly. Number one, in 2020, we'll have the Jones Act and we'll see some new interesting movement in terms of advocating for change of the Jones Act. Two, minimum wage will be with us as an area of advocacy in our state legislature. Number three, the rail, it's still with us and yet it reaches a milestone. In 2020, it's slated to actually start operations. That'll be interesting. Fourth, we have an election, both local elections as well as the national election taking place. And fifth, housing remains with us as probably the most critical issue here in Hawaii, the need for homes that people can afford to buy and the need for residences that individuals can rent. Of these issues, which one do you think is really going to be a hot one? In fact, let me just change that question in our limited time left. You have some perspectives on the minimum wage battle that goes on. Oh, definitely. I mean, I think that a lot of these, you know, are they hot in terms of politics, are they hot in terms of what people are really concerned about? Minimum wage is definitely hot in terms of politics. I fully expect to see it debated again. One of the things that makes it complicated is that there has been a push for a rather dramatic increase in the minimum wage. We're not talking, you know, a 75 cent boost. We're talking a boost of several dollars. I've seen $15. I've seen $17. And there are lots of local businesses who are very willing to say, we can't afford this. We would have to shut our doors. But this political push for the minimum wage, I wonder whether those people are really being heard. And if there's a realization that the businesses who are saying, we have to shut our doors, those are the real local businesses, you know, not the bigger corporations that can more easily absorb these kinds of expenses, but the small, you know, mom-and-pops, the local, small, medium businesses that kind of give our state its character. And those are the ones that are really seriously endangered, restaurants especially, by a significant hike in the minimum wage. And I think the better tactic, you know, if there's any legislators out there listening and wondering, you know, what can we do? We need to do something about this cost of living. Raising the minimum wage will not lower the cost of living. In fact, it's more likely to raise the cost of living as well, because all of these businesses will have to raise their prices to compensate. Instead, look at things that you can do to make the state more affordable, you know, give everyone a raise by lowering the cost of living. Look at taxes that can be reduced, you know, hold back from the next surcharge. Look at fees that have grown too high. Those kinds of things, those are the kinds of changes that I think could have the same effect as a minimum wage hike, but without the same, in terms of helping people have more money in their pocket, but without that really negative effect on the economy as a whole. Well, I think you've hit the nail on the head with this issue that it really is about people and their ability to survive and to thrive. It's about people having enough money to afford the kind of life, the kind of livelihood, the kind of life for their children that they want and that they deserve. And so getting there is the real question. And I think the data shows pretty clearly, and you've mentioned this, that climbing up by forcing the minimum wage up, we will never feasibly get to a living wage. Instead, let's bring the living wage down. Let's do those things that create an economy that is affordable for people to live in. I think that's what you're saying. That's exactly it. A living wage is not an economic measurement. It's just a sociological measurement. And the minimum wage is never really intended to be that. So if we're looking at how do we make it possible to live in Hawaii, then I think the thing to do is to look at all the things, all the regulations, the fees, the taxes that make Hawaii unaffordable, instead of trying to legislate it. A good closing point, because that's exactly what we're going to continue to do at the Grassroot Institute in 2020, look for ways to make life more affordable for all the people of Hawaii. Malia Blomhill, Director of Policy at Grassroot Institute, thank you for being with us. Thank you. And to everyone, aloha until next time on Hawaii Together on the ThinkTech Hawaii Broadcast Network, aloha.