When classes resumed Tuesday after winter break at Maui Preparatory Academy, there were 26 new students enrolled at the private school, on top of the 100 children returning from the fall, whose parents have decided to work remotely from Hawaii during the Covid-19 pandemic.
On Oahu, an organized effort to attract temporary residents employed on the Mainland to work in the Islands drew more than 50,000 applicants for 50 spots that will be chosen by the end of this month.
Other tech workers are taking their own initiative to move here, where an earlier workday to accommodate Mainland time zones means more time to enjoy the surf.
Even Larry Ellison, who bought 98% of Lanai eight years ago, recently told employees at Oracle Corp. — the company he co-founded that is leaving the Bay Area for Austin, Texas — that he’s living full-time in Hawaii and commuting “through the power of Zoom.”
WFH may mean work from home anywhere else during the Covid-19 pandemic, but for a lot of people these days it means Work from Hawaii.
Many of the new students at Maui Prep and other private schools in the Islands have parents who work in high-technology industries based in the San Francisco Bay Area or Seattle who don’t blink at multimillion-dollar price tags for homes on Maui, Hawaii Island or Kauai — or tuition that can start at $16,000 for elementary school.
At Maui Prep, enrollment for the Napili private school has nearly doubled this year with the influx of new residents from Kapalua to Kaanapali. The school has been conducting in-person classes since Aug. 17.
“We actually have had a huge outpouring specifically from California, from the Bay Area, Menlo Park, Silicon Valley, Palo Alto, all those areas,” said Liz Turcik, Maui Prep’s director of admissions. “We’re so happy about it but we’re looking at over 100 students in a 250-student school, so it’s a massive intake of students.”
Hawaii was already starting to gather data on remote work before the Covid-19 pandemic forced companies to allow employees to work from home and spurred some to make the move.
It was part of a long-talked-about effort to diversify the state’s economy away from tourism, which has plummeted during the pandemic, said state Sen. Glenn Wakai, who is involved in the Movers and Shakas effort to bring temporary residents here to work remotely, offering them a free plane ticket and deep discounts on Waikiki hotels.
“What’s most important is the workforce development part of our diversification plans,” Wakai said. “We need capital, we need infrastructure, and we need workforce.”
Wakai noted that Hawaii has come a long way in the last 10 years in terms of capital and infrastructure with the Entrepreneur’s Sandbox and accelerators such as Blue Startups, the Elemental Excelerator and the University of Hawaii’s XLR8UH.
While much of the discussion about workforce development has focused on STEM education — science, technology, engineering and mathematics — that’s a generational change, Wakai said.
Hawaii needs change sooner, he said.
“What’s really a huge benefit of bringing in technologists who already have that brain capacity is that that will be one of the main ignition points for us to truly launch into diversification of our economy,” he said.
Covid has exposed “this huge vulnerability to the Hawaii economy,” said Ed White, who stayed in Hawaii after being posted here with the Army and works in tech for a Washington defense contractor.
White is active with the Movers and Shakas effort and is also a vocal contributor to discussions about remote work on the Hawaii Slack, a networking channel.
White said technology is a pathway for the economy, “not just away from tourism but reliance on boats and planes.”
“We can’t afford not to have a tech sector here – it’s the only industry here that we’re able to do independently,” he said.
Movers and Shakas was born from an idea that Jason Higa, CEO of Zippy’s Restaurants’ parent company FCH Enterprises, presented to fellow leaders at a meeting of the Hawaii Executive Collaborative as a way to help the tourism industry.
Lynelle Marble, the group’s executive director, said the idea was to create a way to help fill the gaps created by the loss of the traditional seven-day visitors “while also giving an opportunity for former residents of Hawaii to come back home — could we bring remote workers home?”
“That really resonated, not only because of wanting to try and help fill some of those gaps around the visitor industry but also because everyone’s looking at what’s next for Hawaii trying to build a resilient economy,” she said. She cited the HEC’s economic talent roadmap that focused on three strategic opportunities for the short and long term — expand work-based learning, rapidly re-skill and credential and grow sector-based strategies.
“There’s potential here if we make sure that we bring the right type of people to Hawaii that are willing to share knowledge resources that our Hawaii people may not have otherwise been exposed to,” she said. “There’s a tie-in and there’s potential there to help build up and not only support the tourism industry in a different way, but also to help connect our residents to some out-of-state knowledge resources that may help their businesses, their nonprofits, as well.”
For Higa, it was the stories of friends’ sons and daughters returning home with their families to work remotely from Hawaii that got him thinking about bringing people here to work as temporary residents.
“Covid has certainly brought many challenges, but it’s brought opportunities, opened doors to different things that businesses would have never looked at,” he said. “And, the thought of someone coming home and working remotely and staying here permanently and raising their family, that’s Richard Matsui.”
Matsui has become a spokesman for the work-from-Hawaii movement since he, his wife and newborn daughter came six months ago from San Francisco for what was supposed to be a temporary move to be closer to his parents during the pandemic.
That temporary stay has since become permanent for Matsui, CEO of kWh Analytics, a San Francisco-based tech firm that does risk management for solar farms. He’s running the company from Kakaako, while managing his team in San Francisco.
After arriving in Honolulu, Matsui wrote a five-page Google Document with advice for others thinking about spending the pandemic in Hawaii, and circulated it among his network in the Bay Area — 15 of those people have since made the move.
His efforts led him to Higa and a group of other local business leaders who formed the committee to create the Movers and Shakas program.
The idea was to lure other high-achieving, high-earning people with good jobs on the Mainland — especially those who grew up here — to Oahu to work for at least a few months during Covid and generate room nights for some of the empty hotels in Waikiki.
“I was just so happy to meet up with Jason,” Matsui said. “I don’t have the relationships on the island to build the wonderful team he has.”
Higa said he also consulted Denise Yamaguchi, whose Hawaii Food and Wine Festival pivoted during the pandemic to virtual events and launched the Food-A-Go-Go website to help restaurants with their takeout and delivery business, for ideas.
Soon others, including Rob Nobriga, president of Island Holdings; Ben Ancheta, president of the executive search firm Inkinen; and Lori Teranishi, principal and founder of the communications firm iQ 360, formed a committee to formulate the Movers and Shakas program.
The selected group of 50 people will receive airfare and deep discounts at hotels in exchange for sharing their time and talents with the community and local nonprofit organizations.
Higa and the group also got help from Paul Yonamine, chairman of Central Pacific Bank, and Kevin Dahlstrom, the bank’s chief marketing officer; as well as FCH’s vice president of marketing, Kevin Yim.
Higa said Duane Kurisu, chairman and CEO of aio Group, then connected the group with Marble, who has become the committee’s organizer.
The efforts dovetailed with a long-term remote worker program being put together by the state Department of Business, Economic Development and Tourism, and could provide the state with data it was seeking, Higa said.
The cost of the Movers and Shakas program is about $500,000, Higa said. That is being underwritten by sponsors including Zippy’s, the Central Pacific Bank Foundation, the Hawaii Executive Collaborative, Inkinen, Island Holdings, the Omidyar Foundation and DBEDT.
The application period opened Nov. 29 and by the time it closed on Dec. 15, more than 50,000 people had applied.
“The response has been so overwhelming,” Marble said. “There’s a lot of interest and a lot of really good, qualified people who understand the intent.”
Finalists have been notified and the final 50 are expected to be chosen by the end of this month.
There are already more than that who have come here on their own initiative, which may help stem the flow of people leaving Hawaii because of the pandemic economy. The Hawaii Tourism Authority’s daily passenger numbers counted nearly 4,000 intended residents in the month of December alone, and the daily numbers were similar to those in previous months.
Ashley McShane came home to her family on Oahu in August; she had been laid off from her job at Twitter in San Francisco right before the pandemic started. She worked as a program manager at Blue Startups until its most recent cohort ended and is now looking for opportunities in the local tech space and is active on the Hawaii Slack.
McShane said one friend flew to Maui for two months to escape the California fires, while another is waiting for the “housing market to stabilize a little bit so he can sell his home in the Bay Area and come out here and work remotely.”
“I really feel like there’s this honeymoon phase everyone has with Hawaii,” she said. “Covid is giving everyone a chance to act on that honeymoon.”
That seems to be the case for Sabina Alistar, who had been thinking of moving to Hawaii since first visiting in 2008, but never found a right time to make a change.
The Covid-19 closures — “there’s fewer things to do in San Francisco and you don’t get to see your friends anyway” — and a friend’s death in an accident in June — “he had just decided to enjoy life” — put things in perspective for Alistar, who decided to make the leap across the Pacific with a plan to stay for between six and nine months. She recently found an apartment near the Honolulu Zoo that is within walking distance to the beach.
Since the pandemic began, Alistar’s company, a tech firm in the home improvement market in Northern California with 150 employees, got rid of its office space in San Francisco.
“This just fueled our decision to go all remote,” she said.
And it freed her to work from Hawaii, where she manages a team of 17 spread across the world, as far away as Kazakhstan. Her biggest challenge is finding a time for meetings “when everyone can participate.”
She met Matsui after arriving in Honolulu and is looking to get involved with one aspect of Movers and Shakas.
“I’m excited that they’re building these opportunities to volunteer,” she said. “I’m hoping to get involved.”
But while some coming to Hawaii to work remotely plan temporary stays, some with families are making more permanent commitments, especially in high-end communities on the Neighbor Islands.
A recent luxury market report by Hawaii Life found the number of sales of homes for more than $3 million were on track to surpass 2019, along with the dollar volume. A lot of those buyers bought sight unseen, unwilling to comply with Hawaii’s mandatory 14-day quarantine, which lifted in October; Hawaii Life’s Mary Anne Fitch sold a $14.5 million home in Kapalua after a three-hour FaceTime tour.
A taxing issue
One issue that has come up on the Slack discussions is whether remote workers will have to pay income tax on their earnings while in the Islands. The answer is yes — Hawaii can tax income earned while working here, but the remote worker will likely not be double-taxed by the home state.
“Most states will give you a credit for the tax that you pay to Hawaii or the home state’s tax on the income that is from Hawaii,” said Tom Yamachika, president of the Tax Foundation of Hawaii.
Meanwhile, Hawaii joined a dozen other states last month in filing amici curiae, or friend of the court, briefs with the U.S. Supreme Court urging justices to take up a petition by New Hampshire seeking to stop Massachusetts from taxing residents who have been working remotely. The petition focuses on workers who previously commuted to jobs in Massachusetts but have been working from home during Covid — New Hampshire says its neighbor doesn’t have the right to tax the income of those workers.
The Wall Street Journal recently reported that a ruling by the high court could have significant impact on state revenues and could set a precedent for taxing remote workers beyond the current pandemic. The Tax Foundation of Hawaii also joined in an amici curiae brief filed by the National Taxpayers Union Foundation urging the high court to take up the New Hampshire petition.“People are finding they can work from home and they can learn from home and people are looking for safe havens,” said Jim Schneider of Kukio Properties, the brokerage at the Kukio Golf and Beach Club on Hawaii Island. “All these remote marketplaces have been going off the charts. It’s been fantastic.”
Schneider said he’s noticed another trend.
“A typical buyer at Kukio in the past probably spends two months a year here – I feel that’s at least doubling,” he said. “Some are people spending a third of the year here, or half.”
Those with children sometimes bring tutors to home- or remote-school, while others enroll in local schools, a boon to private schools that may have lost local students because of the pandemic.
“It’s a blessing for Maui Prep because it’s helping us as a private nonprofit small business, and in time of need,” Turcik said. “It’s really helping to balance everything in terms of students who are full-pay versus students who are on financial aid and getting a little bit of help from the school.
“We don’t get any federal or state funding, unlike public
schools, so we do need every dollar of revenue that comes in,” she said. “So,
we’re really, really happy to have these families coming to stay with us.”
