The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Senate Committee on Judiciary on Feb. 27, 2026.
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Feb. 27, 2026, 10:30 a.m.
Hawaii State Capitol
Conference Room 016 and Videoconference
To: Senate Committee on Judiciary
Sen. Karl Rhoads, Chair
Sen. Mike Gabbard, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
TESTIMONY IN SUPPORT OF SB2423 SD1 — RELATING TO ZONING
Aloha Chair, Vice Chair and other Committee members,
The Grassroot Institute of Hawaii supports — and offers amendments to — SB2423 SD1, which would prohibit the counties from requiring minimum lot sizes larger than 2,500 square feet and place other limitations on required setbacks and parking minimums. These prohibitions would be applicable only to parcels zoned for housing in the state’s urban district.
SB2423 would also allow counties to create a process through which landowners could exempt themselves from the bill’s requirements.
This legislation would be a major step toward reducing housing costs for Hawaii residents. Allowing smaller lots in urban areas would reduce land costs, which can represent as much as 75% of the cost of buying a single-family home.[1]
In Hawaii, each county currently sets its own minimum lot sizes. For residential zones, Hawaiʻi County’s smallest minimum lot size is 7,500 square feet; Maui and Kauai both have their smallest minimum lot size set at 6,000 square feet; and Honolulu’s smallest is 3,500 square feet.[2]
Considering Hawaii’s extremely high land costs, imposing minimum lot sizes contributes to housing prices that few local families can afford.
Consider this example: A vacant 6,000-square-foot lot in Honolulu is valued at $1.2 million. Under current lot-size rules, only one house could be built on it. But allowing that land to instead support two fee-simple houses on 3,000-square-foot lots would greatly reduce the land cost per house.
For a potential homebuyer, reducing the land cost from $1.2 million to $600,000 could mean the difference between being able to afford a mortgage or not. The houses built on those smaller lots would also be smaller, and therefore cost less, than a single home built on the 6,000 square foot lot.
Cities across the United States that have experimented with decreasing minimum lot sizes have seen an increase in the construction of smaller, less expensive homes. This is also not a new concept.
Back in 1998, Houston, Texas, reduced its minimum lot-size requirement for parts of the city from 5,000 square feet to 1,400 square feet, and it applied the change to most other areas in 2013. A 2023 study showed that the homes built on these smaller lots were markedly more affordable — valued at almost 40 percent less than other single-family homes.[3] Other research also indicates that large minimum lot sizes contribute to higher housing costs.[4]
Houston does allow individual neighborhoods to opt out of the minimum lot-size requirement through a process that is similar to the one outlined in this legislation.
As such, SB2423 strikes a balance between expanding housing opportunities for Hawaii residents while allowing homeowners to have a say regarding what gets built in their neighborhoods.
However, there are improvements that the committee could make to this draft of the bill. In particular, Grassroot believes the minimum lot size should be reverted back to 1,200 square feet; that the lot width and depth rules be restored; and that the language prohibiting counties from requiring more than 30% of a lot to be open space be restored; and that the language prohibiting counties from requiring homes be less than 3-stories be restored.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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[1] Eric Pape, “Living Hawaii: It’s The Land That Really Drives Up Honolulu’s Home Prices,” Honolulu Civil Beat, Nov. 13, 2015.
[2] Jonathan Helton, “How to facilitate more homebuilding in Hawaii,” Grassroot Institute of Hawaii policy brief, December 2023.
[3] Alex Horowitz and Tara Roche, “Lot-Size Reform Unlocks Affordable Homeownership in Houston,” Pew Charitable Trusts, Sept. 14, 2023.
[4] Patrick Tuohey, “Why minimum lot size reform should be on every city’s housing agenda,” Better Cities Project, Dec. 15, 2025.
