Located in the heart of the Pacific Ocean, the future of the U.S. military in Hawai‘i is a subject of intense debate as leases for approximately 46,000 acres of military base land are nearing expiration. The armed forces secured these lands from the state in the 1960s through 65-year leases at a nominal fee of just $1, with the terms beginning to expire in 2028.
Unsurprisingly, many advocate for the return of these territories. Historically, the U.S. military played a pivotal role in seizing indigenous lands following the overthrow of the Hawaiian monarchy in the 19th century. Today, the military occupies roughly 25 percent of O‘ahu, the state’s most populated island, and 5.6 percent of the state overall—a higher proportion than any other U.S. state.
Discussions regarding the future of these lands have taken place between the state of Hawai‘i and the Trump administration. Hawai‘i’s Congressional members and the state’s official indigenous-led agency, the Office of Hawaiian Affairs, have also actively participated in these debates.
With the future of the military’s presence in Hawai‘i hanging in the balance, we co-authored a major report earlier this year titled “The True Cost of the U.S. Military in Hawai‘i,” aimed at providing a clear assessment of the armed forces’ local impact.
For years, bold claims have been made regarding the economic benefits the U.S. military brings to Hawai‘i. However, the data reveals that the military’s contribution is significantly smaller than commonly perceived, while the economic damage and other harms caused by its presence remain hidden or overlooked.
Drawing on over 45 years of collective experience studying the U.S. military, our calculations demonstrate that the Pentagon and other sources have exaggerated the military’s impact by billions of dollars. Meanwhile, the military’s presence is driving up rents and exacerbating the housing crisis, damaging the environment and public health, and stifling the growth of industries that could generate more local jobs.
Amid the ongoing debates surrounding the expiring leases, here are the military’s true impacts.
Exaggerated Claims
The Pentagon, segments of the state government, media outlets, and advocates frequently describe the military as part of a “three-legged stool”—alongside tourism and real estate/construction—that serves as the backbone of the state’s economy. They cite billions of dollars in annual military spending, including $10 billion for FY2023, as proof of the Pentagon’s contribution to the state’s economic well-being.
Through a 2025 research trip to Hawai‘i and an examination of government spending data, we identified the fundamental flaw in these claims: they imply that all Pentagon spending related to Hawai‘i directly benefits the local economy.
This is entirely untrue.
Significant portions of Pentagon spending never enter the local economy. Instead, these funds are disbursed to individuals and corporations based in other states and countries.
In total, our findings indicate that the military’s actual economic impact is closer to $7.2 billion annually. This represents a reduction of $2.8 billion, or nearly 30 percent, from the $10 billion frequently cited by the Pentagon.
Consequently, the military represents 6.4 percent of Hawai‘i’s total gross domestic product (GDP), rather than the 9.2 percent recently claimed by the Pentagon and state government sources. Notably, our 6.4 percent calculation aligns closely with the most recent estimate of 6.0 percent of GDP provided by Hawai‘i’s Department of Business, Economic Development & Tourism.
While $7.2 billion is a substantial sum, at least five other industries are larger statewide, including real estate, accommodation and food services, state and local government, retail, and health care and social assistance.
Where the Money Goes
Unlike other industries where the vast majority of employees are state residents, the opposite holds true for the military. The overwhelming majority of military personnel are not from Hawai‘i.
Consequently, significant portions of military spending allocated to salaries and benefits actually leave the local economy when active-duty personnel from outside Hawai‘i depart the state.
Thousands of military personnel officially counted as living in Hawai‘i actually reside on Navy vessels for significant portions of the year or are deployed overseas. While a portion of their salaries circulates within the state’s economy, much of it does not. In total, our calculations show that Hawai‘i benefits from $3.7 billion in military personnel spending, which is roughly two-thirds less than the $6.2 billion claimed by advocates.
Substantial Pentagon spending also leaves the local economy because many military contracts are awarded to corporations not based in Hawai‘i. For instance, the top recipient of Pentagon contracts performed in Hawai‘i in 2023 was a joint venture between a Spain-based multinational and a Texas-based company, partnered with a smaller Hawai‘i-based firm. Two of the remaining top five recipients were also not headquartered locally.
The state conservatively estimates that 15 percent of contract dollars awarded to non-local companies leave Hawai‘i as profits and operational expenditures in the companies’ home locations. This suggests that at least $301.5 million in contract dollars claimed to benefit the state in 2023 actually departed Hawai‘i.
Overlooked Costs of the Military’s Presence
Beyond the inflated estimates of economic benefits, the military’s presence imposes costs on Hawai‘i in numerous ways that are rarely acknowledged. Because most military personnel and their family members are not legal residents of Hawai‘i, they generally do not pay state income taxes, yet they still benefit from the state’s public infrastructure, public services, and amenities.
The military’s presence also exacerbates the housing affordability crisis. Our report estimates that active-duty service members living off base and renting in the private market drove up rents on O‘ahu by 7.1 percent in 2024 alone. This increase forced local non-military renters to pay an average of $154 more per month and $1,850 more per year. This upward pressure on rental prices contributes to housing instability, the homelessness crisis, and the displacement of thousands of households priced out of the state.
The issue is compounded by the generous housing allowances the Pentagon provides its personnel—a monthly average of $3,679 per service member in Honolulu County. Combined with the military’s occupation of land, which keeps land prices artificially high and restricts housing supply, this directly harms Hawai‘i’s residents.
Meanwhile, the 46,000 acres of land the military has leased for a dollar since the early 1960s represents billions of dollars in lost rental revenue. Based on the fair market value of this land, our report calculates that Hawai‘i could claim up to $134 billion in back rent.
This sum does not account for the billions of dollars required to repair the environmental and public health damage caused by military training, testing, and other activities. A 2017 report by ProPublica estimated total past and future environmental cleanup in Hawai‘i to be $2.77 billion, excluding the $400 million spent since 1994 to only partially clean up the island of Kaho‘olawe after decades of Navy bombing.
Some argue that the military creates the jobs Hawai‘i needs. While it is undeniable that military spending generates employment, it is an inefficient job creator compared to other industries. Our report, building on years of research, shows that military spending creates an average of 5.3 jobs per $1 million invested, compared to an average of 12.3 jobs created when the same funds are invested in healthcare, education, food production, housing, and energy efficiency.
In other words, spending in non-military industries creates an average of 134 percent more jobs than military spending, with the vast majority of these jobs going to local residents. It is simply more efficient to invest in other economic sectors rather than rely on military expenditure.
New Beginnings?
The future of the leased lands remains unclear. Returning most or all of the territory to Hawai‘i would not necessitate any significant change in the military’s overall presence, as the leases represent less than 20 percent of the roughly 250,000 acres the military occupies in the state. Simply put, the U.S. Armed Forces have more than enough space to continue their current operations—although “The True Cost of the U.S. Military in Hawai‘i” report also presented safer alternatives to the military’s current strategy, which is centered around Hawai‘i and aggressively confronting China in the Pacific.
The Army has already indicated it will relinquish nearly 800 acres of a controversial training ground responsible for significant environmental damage. Some locals envision a university dedicated to learning, cultural preservation, and ecological repair occupying this space.
As our report demonstrated, hundreds of former bases across the United States and the world have been converted into new spaces that benefit local communities. In Hawai‘i, a former Army fort was transformed into a state park and monument, a community college, a state emergency operations center, and a school for children with special needs. Elsewhere, base conversions have produced thousands of jobs and created housing, hospitals, business incubators, solar and wind farms, cultural preservation sites, and much more.
As the people of Hawai‘i consider their future, they deserve an accurate picture of the armed forces’ actual impacts and the available alternatives, rather than billions of dollars in exaggeration.
