Didn’t Hawaii Housing Authority v. Midkiff Fix Excessive Housing Cost in Hawaii?

The short answer to the question posed by the above headline is, Hell, no!

But in case the 1980s Midkiff controversy (467 U.S. 229)  is not uppermost  in your mind by now, let’s review the bidding. This was a case in which SCOTUS held that it was just fine for the State of Hawaii to take by eminent domain the titles of land lessors who subdivided their land into building plots and leased them at friendly rents to folks who built (and lived in) single-family homes. By the 1980s those lessees (who had entered into those leases voluntarily) decided that they didn’t want to be lessees any more — land values were rising on Oahu and understandanbly, they wanted to get in on the gravy train. Long story short, the state legislature responded to their demands and passed a law allowing the condemnation of those lessors’ titles for resale the lessees. SCOTUS approved because it found the Hawaiian legislation to be a permissible effort to stabilize or even reduce the cost of housing on Oahu. How that could happen, given that the legislation produced not even one square inch of buildable land, the court did not explain.

The Midkiff case inspired reams of legal commentaries, and we ourselves have contributed to the slaughter of trees for the paper consumed in the process — see 31 Hawaii L. Rev. 423, 429-433, which tells the story of how instead of stabilizing or reducing the cost of housing on Oahu, the title transfers effected by Midkiff resulted in a dramatic escalation of housing costs, and made Hawaii the most expensive place to live. So why is this bit of old news of interest now? We’re glad you asked.

It all came back today when over our morning cup of coffee we came across an editorial in the New York Times (Occupy Honolulu, Nov. 21, at p. A22) kvetching inter alia about — are you ready? — “an absudly tight housing market” in Honolulu. We coulda told them that this would happen, back in the 1980s, and indeed someone did. When the Midkiff case was before the U.S. Court of Appeals on its way to the Magnificent Nine, Judge Cecil Poole wrote a conncurring opinion (in favor of the condemnee-owners) pointing out that the Hawaii legislation in issue couldn’t work because its provisions were antithetical to the law’s stated objectives. He was right, of course, but the Supreme Court refused to listen, asserting that even if the Hawaiian legislature was wrong, that was no business of the court.

So let’s raise a cup of whatever beverage sustains you at the moment, to Judge Cecil Poole for being right and prescient, even if SCOTUS was wrong in rejecting his sage advice. In other words, the legislature can be wrong, but that does not include legislative acts that go beyond mere wrong and are irrational — acts that cannot help but produce results that are diametrically opposite to the stated legislative objective. Whatever that may be (the phrase “loony tunes” comes to mind), it isn’t law.

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