US Military's Economic Impact in Hawaii Questioned Amid Land Lease Renewals

The future of the U.S. military in Hawai‘i is a subject of growing debate as land leases for approximately 46,000 acres of military base land approach expiration. These leases, originally signed in the 1960s for 65 years at a token fee of $1, begin to expire in 2028. Some groups advocate for the return of these territories, given the military's historical role in seizing indigenous lands after the overthrow of the Hawaiian monarchy in the 19th century. The military currently occupies about 25 percent of the most populated island, O‘ahu, and 5.6 percent of the state's total land area, a proportion higher than in any other U.S. state. A new report, "The True Cost of the U.S. Military in Hawai‘i," has been released to assess the armed forces' local impact. It challenges long-held assumptions about the economic benefits provided by the military, concluding that its contribution is significantly smaller than commonly believed. The report highlights that the military's presence contributes to rising housing costs, environmental damage, public health issues, and limits the growth of local industries. According to the report, annual military spending figures, such as the $10 billion cited for FY2023 by the Pentagon and state government, often overstate the direct economic benefits to Hawai‘i. The actual economic impact on the local economy is estimated to be around $7.2 billion per year, nearly 30 percent less than claimed. This discrepancy arises because substantial portions of military spending are paid to individuals and corporations located outside Hawai‘i, thus not circulating within the local economy. Furthermore, a significant portion of military personnel salaries and benefits leave the local economy when active-duty members from outside Hawai‘i are transferred. Similarly, many military contracts are awarded to companies not based in Hawai‘i, with an estimated 15 percent of contract dollars leaving the state as profits or expenditures in the companies' home locations. Beyond inflated economic benefit estimates, the military's presence exacerbates the housing affordability crisis. The report estimates that active-duty service members renting off-base pushed rents on O‘ahu up by 7.1 percent in 2024 alone. This has led to non-military renters paying an average of $154 more per month, contributing to housing instability, homelessness, and forcing thousands of households to leave the state due to unaffordability.