FOR IMMEDIATE RELEASE
March 10, 2025
Media Contact:
Reina Miyamoto
(808) 523-8116 (o) or (808) 292-0304 (c)
reina@hihomeownership.org
New UHERO Study Reveals Debilitating Impact of Construction Defect Litigation on Housing Access in Hawaiʻi
Honolulu, HI — The Hawaiʻi HomeOwnership Center (HHOC) collaborated with key stakeholders to release this new, independently-commissioned report Monday examining the effects of construction defect litigation on Hawaiʻi’s housing market—first-time homebuyers, current homeowners, builders, and the overall housing industry.
The foundation of HHOC’s mission is rooted in helping Hawaiʻi residents overcome barriers to homeownership. Recognizing litigation as a potential factor hindering housing access, HHOC engaged the University of Hawai‘i Economic Research Organization (UHERO) to research whether—or how—construction defect lawsuits might reduce the supply of for-sale homes, limit financing, or drive up costs for first-time buyers.
“Our goal at the Hawaii HomeOwnership Center is to ensure the dream of homeownership remains within reach for local families,” said Executive Director Reina Miyamoto. “By commissioning this study, we wanted to discover whether these lawsuits are creating another barrier—and if so, how to address it. Whether through our financial literacy classes or programs, we want families to have every chance to become successful homeowners. The report will be used to improve our services and the information we provide to our members and the community.”
UHERO analyzed housing production data, insurance trends, court filings, mortgage financing records, and conducted interviews. Among the key findings in the report:
- Increased Costs: Construction defect litigation can push up insurance and materials costs, raising the price of homes and limiting developers’ willingness to build for-sale units— especially more affordable condos.
- Financing Barriers: Ongoing or potential litigation can make properties ineligible for common government loan programs, like FHA or VA which provide low or no down payment options, forcing potential buyers into higher-cost portfolio loans that can increase monthly
- Market Ripple Effects: Developers may steer away from for-sale projects due to the higher risk of litigation, further constraining the availability of entry-level and mid-range homes. In turn, aspiring homeowners face tighter inventory and higher prices.
- Effects on Existing Owners: Homeowners in projects under litigation may find refinancing or tapping home equity more difficult, while also navigating years-long legal proceedings.
“Our report finds that construction defect litigation in Hawai‘i has increased significantly over the past two decades, affecting a growing share of newly built homes and contributing to higher development costs,” said Trey Gordner, a policy researcher at UHERO. “While litigation serves an important consumer protection function, its increasing frequency and scale may have unintended consequences for housing affordability and homeownership access.”
Since its inception in 2003, HHOC has provided homebuyer education and related services to more than 6,700 members, of which nearly half have successfully purchased a home. Over half of those homeowners were considered low-income. The study’s results will inform how HHOC continues to “provide education, information, and support to create successful first-time homeowners” in Hawai‘i.
Click here for a link to the UHERO study.
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About Hawaii HomeOwnership Center
The Hawaii HomeOwnership Center (HHOC) provides education, information, and support to create successful first-time homeowners in Hawai’i. By addressing barriers and increasing rates of home ownership, the HomeOwnership Center aims to build stronger families and communities throughout the state of Hawai’i. Services are available to anyone regardless of their income. HHOC is rated as an exemplary organization by NeighborWorks America, a Congressionally Chartered non-profit organization with a mission of creating opportunities for people to live in affordable homes, improve their lives and strengthen their communities – HHOC is one of 3 NeighborWorks Organizations in Hawaii.
HHOC Mortgage was initiated by HHOC with the purpose of providing affordable financing alternatives and providing financial support to HHOC’s programs. Niche programs include their Down Payment Assistance Loan that is an affordable alternative to mortgage insurance for low- moderate income buyers with less than 20% down payment. The Deferred Closing Cost Assistance Loan helps address closing costs including points to buy down a buyer’s interest rate through a loan with 0% interest and no monthly payments. https://hhocmortgage.org/
HHOC Housing and Land Trust was created by HHOC with the purpose of preserving and creating affordable homeownership opportunities. In the future, HHLT hopes to be able to purchase homes under government buy-back restrictions should the government waive their option to repurchase the property & has made progress through being selected as the buy-back agent for HCDA. This will support sustainability of the program while providing truly affordable ownership opportunities for low to moderate income buyers. To learn more about the HHLT program visit www.hihomeownership.org/hhlt.