Why we need change now
Explore how the current system is failing and why change is necessary. Dive into the facts, hear from those directly impacted, and decide for yourself. Find articles, case studies, and research that highlight the real challenges and the need for action.
TACKLING A CRITICAL THREAT TO HOUSING
Aggressive attorneys are encouraging homeowners to skip the process and pursue lawsuits for construction defects. These lawsuits drive up housing costs, delay necessary repairs, and restrict access to home loans. The laws were intended to promote cooperation and swift resolutions, but the rise in unnecessary litigation is undermining that purpose. Reforms need to restore the original purpose of the law to ensure legitimate defects are repaired quickly and fairly, while protecting homeowners from predatory legal practices.PROTECTING HOMEOWNER RIGHTS
Homeowners deserve a fair and balanced process to address legitimate construction defects without being forced into lengthy and costly legal battles. When disputes arise, the focus should be on resolving issues efficiently and ensuring that repairs are made swiftly — not enriching attorneys through litigation. By fixing the system, we can safeguard homeowner rights, providing them with timely solutions that protect their investment and quality of life. Without these protections, homeowners are left vulnerable to delays and additional expenses, which could ultimately undermine their ability to maintain their homes.CONSEQUENCES WITHOUT CHANGE
The consequences for Hawaiʻi’s residents will be severe if we do not make changes. The cost of homes will rise exponentially as legal disputes add unnecessary expenses to construction projects. Homebuyers— especially first-time buyers and veterans—will struggle to secure loans as lenders back off from funding litigated homes. Homeowners will face years of delays in getting needed repairs, often left covering costs out of pocket after attorney fees. Worse still, the housing crisis in Hawaiʻi will deepen, with fewer homes being built and more families unable to afford or maintain their homes.March 19, 2025
Honolulu Star-Advertiser Editorial: Home ‘defects’ put hurt on owners
On one thing, we’ll bet most Hawaii homebuyers and would-be buyers, homebuilders, insurers, real estate agents and (maybe) even lawyers in the field agree: For median-income households, homes here cost too much, take too long to build and are too vulnerable to bureaucratic and/or legal hurdles that hike costs and stall the process of buying or selling “affordable” homes.
Read MoreMarch 16, 2025
Aloha State Daily: Here’s how construction defect litigation is affecting housing in Hawai‘i
Housing availability and affordability have long been issues in the Islands, with the state’s housing shortage often attributed to factors like high costs and regulations that can stymie new development.Read more
Read MoreMarch 10, 2025
New UHERO Study Reveals Debilitating Impact of Construction Defect Litigation on Housing Access in Hawaiʻi
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.
Read MoreMarch 6, 2025
New Coalition “Housing No Kākou” Launches to Tackle Hidden Threat to Housing Access
FOR IMMEDIATE RELEASE
MEDIA CONTACT
January 31, 2025
Honey Maltin-Wisot
(808) 445-0696
info@housingnokakou.com
New Coalition “Housing No Kākou” Launches to Tackle Hidden Threat to Housing Access
Statewide advertising campaign highlights how construction defect lawsuits are hurting homebuyers and homeowners
Honolulu, HI — A new coalition, Housing No Kākou, has launched to address a hidden but growing threat to homeownership in Hawaiʻi: the surge in construction defect litigation. Organized as a 501(c)(4), Housing No Kākou brings together affordable housing advocates, homebuilders, industry professionals, and labor unions to ensure local families can access housing without unnecessary legal barriers.
To raise awareness and build support for much needed legislative reforms to the Contractor Repair Act (CRA), Housing No Kākou is launching a statewide advertising campaign. The first ad, “Make A Home,” debuts this Friday and highlights a reality that many prospective first-time homebuyers face—being unable to secure a mortgage due to construction defect lawsuits.
Government-backed lenders, more commonly known as FHA, VA, Fannie Mae and Freddie Mac, which offer loans with very low down payment requirements, often cannot issue mortgage loans for condominiums involved in construction defect litigation. This leaves prospective first-time homebuyers with limited options, as private portfolio lending typically requires higher credit scores, higher interest rates, and higher down payment, typically as high as 20%. Meanwhile, for existing homeowners, lawsuits can delay much-needed legitimate repairs, leaving them stuck in long and drawn-out legal disputes.
The Hawaiʻi State Legislature is currently considering HB420, SB179, SB331, and SB1650, which would bring much-needed reforms to the CRA by streamlining the construction defect resolution process, requiring that contractors and homebuilders have the opportunity to address legitimate defects before litigation, and ensuring first-time homebuyers aren’t unintentionally locked out of mortgage financing.
“As a civil engineer who has worked closely with architects, contractors, and homebuilders, I’ve seen firsthand the challenges in building housing and the unintended consequences of bad policies,” said Greg Hiyakumoto, Board President of Housing No Kākou. “These lawsuits are making it harder for local families to buy homes. Housing No Kākou is committed to ensuring homebuyers aren’t caught in a system that pushes them out of the market.”
Housing No Kākou is dedicated to advocating for reforms that protect homeowners while ensuring that housing remains accessible for Hawaiʻi’s families. The coalition invites the public to learn more and join the movement at HousingNoKakou.com.
View “Make a Home” here.
For logos, click here.
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About Housing No Kākou
Housing No Kākou is a broad coalition united by a shared mission to remove the barriers to housing. We are affordable housing advocates, non-profit organizations, home builders, building industry professionals, community leaders, and organizations committed to promoting reforms that make homeownership attainable for prospective buyers and protect new homeowners from issues that threaten their overall quality of life. Learn more at www.HousingNoKakou.com.
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