Local officials and advocates are celebrating the passage of significant housing reform bills that made it through the state legislative session this year.
At a bill signing ceremony this week, Gov. Josh Green said each law would help add to the affordable housing supply in a state that desperately needs it.
“Our local families are leaving in large numbers in the last few years and that is because housing is too expensive,” he said. “We committed to building 13,000 affordable units by 2026, so we need tools to do that. And the Legislature has given us a bunch of tools.”
Perhaps the most notable — and controversial — of those measures is Senate Bill 3202, an urban development bill that forces the counties to increase the number of accessory dwelling units, or ADUs, allowed on residential properties in urban areas by 2026.
The measure was contested throughout the legislative session and narrowly survived a final floor vote in the state House of Representatives.
Opponents — particularly those on Oʻahu — said the bill won't actually lead to affordable housing and instead warn that it'll encourage overcrowded neighborhoods and monster homes. The Honolulu City Council even passed a resolution opposing SB3202.
The measure requires the counties to allow up to two ADUs on residential properties, although in many instances one is already allowed.
Honolulu councilmembers said that few homeowners actually take advantage of the existing single ADU allowance, so there isn't a demand for more. But they worried the new law will further entice developers to buy and flip properties and sell them for a higher price — making home buying more unattainable for residents.
Another issue is that the bill honors existing private covenants that would block additional ADUs on some properties, and could restrict where they would go.
When asked, Green said he wasn’t sure how many additional housing units would come out of expanding ADU allowances.
Still, there's optimism surrounding the new law. U.S. Sen. Brian Schatz called the bill’s passage a “seminal moment” in Hawaiʻi's affordable housing effort and a political shift to improve the situation.
“The reason I think this bill is a big deal is because I think it will make a difference. But the reason that I think we should all take hope in the enactment of this law is that we are beginning to change the political equation as it relates to housing. There is nothing progressive about preventing housing,” he said.
Home prices in Hawaiʻi are among the highest in the nation, contributing to a cost of living that has forced Native Hawaiians and other residents from their homes.
The University of Hawaiʻi Economic Research Organization found that over the last several years only one in five local households could afford a medium-sized, single-family home in the state. Another UHERO report found that government regulations are a significant barrier to constructing affordable housing.
"People of goodwill created a thicket of regulations that make it almost impossible to build the thing that we all say we want and need," Schatz said.
Up to 41,000 additional housing units are needed statewide by 2035 to keep up with demand, according to the state Department of Business, Economic Development and Tourism’s latest projections.
Green said that 60,000 affordable housing units are “in the pipeline” but many get stuck because of a lack of funding, difficulties in acquiring properties and other issues.
He said SB3202 and the other measures represent extra tools to add to Hawaiʻi’s affordable housing supply.
Rep. Luke Evslin, who chairs the House Committee on Housing, said, “The housing crisis is, I think, by far the biggest crisis that we face, but what gives me hope is that, more so probably than even these individual pieces of legislation getting signed today, is this incredible group of stakeholders who came together from every level of government and from community to fight really hard for the passage of these bills and to take action.”
“This package of bills, in my opinion, represents the most important housing regulatory reform and zoning reform passed by the Legislature in probably over 40 years," Evslin added.
Some other legislation from this session is also expected to impact local affordable housing. Green signed Senate Bill 2919 to give counties more authority over short-term rentals, possibly bringing thousands of affordable housing units back to the market.
“We believe about 75,000 of (the short-term rental units) are of questionable approval. So, we will do well if each of the mayors take advantage of that legislation and bring housing back to the market,” Green said.
Maui County Mayor Richard Bissen has already proposed legislation that would return 7,000 transient vacation rentals to the local housing market. The other counties are also trying to figure out how to implement the new law.
Senate bills 2066 and 2133, also signed by Green, support the Hawaiʻi Housing Finance and Development Corporation’s efforts to create more affordable housing.
House Bill 2090 requires the counties to allow for the “adaptive reuse” of commercial buildings into housing units by the end of the year.
Honolulu Councilmember Tyler Dos Santos-Tam is optimistic about the measure, and supporters say it will revitalize downtown and underutilized areas.
“There's going to have to be a number of other bills to address what the state is telling the counties to do, but at the end of the day, we have to do it. The ball's in our court,” Dos Santos-Tam said.
