The Plaza Accord (1985)
The most recent point in history to have a culture altering effect on the growth of Honolulu did not happen in Honolulu at all.
On September 22, 1985 representatives from West Germany, France, England, the United States, and Japan met in New York City at the Plaza Hotel and signed an Accord which artificially decreased the value of the US dollar by 50% in relation to the Japanese yen. This type of policy that Reagan had campaigned against subsequently increased US inflation, and doubled the buying power of Japanese investors of American assets. Due to its characteristics, Honolulu’s real estate and tourism markets became a natural fit for Japanese investment (Bonham 1998, 3). These investors began a campaign of massive consumption of Honolulu’s most prestigious real estate. At its peak between the years of 1986 and 1990, Japan brought in a total of 10 billion dollars in capital to the state of Hawaii, the majority of which remained in Honolulu (de Lama 1994).
No one on O’ahu epitomized this state of crazed real estate investment more than Japanese tycoon Genshiro Kawamoto. In 1988 Kawamoto became a fabled character as he would cruise Honolulu’s most desirable neighborhoods in a black limousine dubbed the “Kawamotomobile” and send his representatives to ring doorbells to make offers above market value in cash (Lindsey 1988). By 1990, and the end of the real estate bubble, he had purchased nearly 200 properties (de Lama 1994). During this time period, the price of an average home rose from 188,900 in 1985, to a staggering 498,511 only five years later (Nuar 2013). Following the 1980s the Japanese markets went into a gradual recession known as “the lost decade”. This dried up their ability to invest in foreign markets, and all but halted the rise of real estate prices in Honolulu (Hayashi et al. 2001).
The greatest impact of the Plaza Accord has been the change of land ownership in the City of Honolulu. A growing Japanese upper class in Honolulu has effected what kind of shopping, investements, and construction developments were shapping Honolulu's physical landscape.