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Leroy Laney, Chief Economist at First Hawaiian Bank, and Michael Sklarz, Senior Vice President and Director of Research at Locations Inc., join Roth in August 1993 to dissect why living in Hawaii costs so much. By 1990, a typical Oahu family of four needed 34 percent more income than a mainland equivalent—up from 20 percent in 1970—with the median single-family home price near $350,000, roughly three and a half times the national median. Laney identifies the main culprits as inventory costs (retailers carry two to three times mainland stock levels), the compounding effect of Hawaii's excise tax, concentrated land ownership that prevents competitive pricing, and a government that has overextended into activities best left to the private sector. Sklarz adds that no new private rental project has been built on Oahu in more than 20 years because land prices make them financially unworkable; government rental housing succeeds, he argues, only because the state borrows at municipal bond rates and skips the profit requirement. Both guests warn that rent control would further deter private developers, and Laney closes with a deliberately open-ended observation: prices that appear permanently high have a history of eventually coming down.
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