DPP Is Hawaiʻi’s Economic Chokepoint and Its Biggest Near-Term Opportunity

Here’s the reframe. The Department of Planning and Permitting (DPP) is one of the most powerful economic levers in Hawaiʻi. (Yes, it is a bureaucratic nuisance, too. Two things can be true.) DPP governs time. And time, in construction and development, is money. Arguably, more valuable money than tourism dollars (it stays here), just not as sexy, and doesn’t have an HTA, to lobby for it.

DPP is a system under pressure that can either harden or reform this year. DPP has the chance to do the latter and, in doing so, set the tone for what structural change can look like across state and city government for the future.

What’s at stake is clear: without operational reform at DPP, Hawaiʻi will continue to price itself out of development and push costs higher. Delays and the inability to forecast accurately often provide industry operators too much uncertainty, and prices reflect this. Time can no longer be treated as if it has no economic cost. This is why the very public friction around DPP right now matters. DPP should lean in. 

The numbers are not abstract. Estimates suggest DPP backlogs left behind more than $1 billion in direct construction costs (annually), with broader economic impacts easily 5x that amount, at $5 billion. In fact, DBEDT alone attributed $146 million to direct inflationary revenue missed tied to permitting delays. These dollars shrink projects, eliminate housing units, crush entrepreneurial dreams, and quietly transfer advantage to those who already own assets and can absorb cost overruns. This widens the wealth gap even more. First-time buyers, renters, small contractors, young families are paying the price. (I digress…)

DPP’s stated position that “revenue is not our mission” reveals a real leadership blind spot. Revenue is not the intent of a healthy permitting system, but it is the inevitable outcome. Pretending revenue is irrelevant is like an ER saying it’s only responsible for processing charts, not whether patients live. A functioning permitting system creates the throughput.

What’s often cited as DPP’s biggest weakness, the roughly 25% job vacancy rate, is actually its greatest opportunity now, if leadership gets this right. This is no longer about headcount and staffing up. The solution is identifying the institutional knowledge inside DPP and leveraging it through training and AI, so that staffing can be reduced, but be better compensated. 

This is where AI matters. It cannot, cannot be layered onto broken processes. AI’s role is to remove administrative drag, routinize back-office work, and create visibility and forecasting so the people who actually know how to move permits can do that work at scale. Technology does not fix organizations; leadership does. Technology amplifies what leadership makes possible. 

(One insight, more than a prediction, I’ve yet to meet a lawyer who really enjoys an operational turn-around job and is set up for success, especially one that requires energy, vision, and comes with unfavorable scrutiny. Years ago, the Head of DPP came in to solve one real problem that the FBI found, corruption. That’s over. Mission accomplished. DPP has evolved.)

If DPP gets this right, the impact extends far beyond permitting. The people who execute this turnaround will build a rare muscle in Hawaiʻi’s public sector: the experience of fixing something, BIG. That is institutional IP. And it’s transferable. Maybe what Hawaiʻi cannot get out of the private markets, can be built in the public sector. 

Bottomline: A good chunk of tourism dollars leak out of the state; construction is one of the few industries where money reliably stays local. And yet we kneecap it with a permitting machine that treats delay as neutral. Accelerating construction is the most powerful economic intervention the city can make right now and accelerating permitting is how it happens. Turn-arounds are thankless until the job is done, that’s what the politicians are learning.

DPP is not a side story in Hawaiʻi’s economic future. It is the front line. DPP has a chance to prove the government can still be fixed. That is the scale of what’s at stake.

Let’s get it in 2026.

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