April 9, 2026, 10:55 a.m.
Hawaii State Capitol
Conference Room 211 and Videoconference
To: Senate Committee on Ways and Means
Sen. Donovan M. Dela Cruz, Chair
Sen. Sharon Y. Moriwaki, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: TESTIMONY IN SUPPORT OF HB2385 HD3 SD1 — RELATING TO HOUSING
Aloha Chair, Vice Chair and other Committee Members,
The Grassroot Institute of Hawaii supports HB2385 HD3 SD1, which would allow projects built under county affordable housing incentive programs, such as Honolulu’s Bill 7 program, to be eligible for the state’s general excise tax exemption for construction work that is already available to other affordable housing projects. The legislation would apply to taxable years beginning after Dec. 31, 2026 and would sunset on July 1, 2031.
This bill could improve the financial viability of affordable housing projects and reduce Hawaii’s housing deficit.
And that deficit is significant. A 2024 update to the Hawaii Housing Planning Study estimated that the state needs 64,490 new housing units built between 2023 and 2027 to keep up with demand.[1]
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
1050 Bishop St. #508 | Honolulu, HI 96813 | 808-864-1776 | info@grassrootinstitute.org
[1] “Hawaii Housing Planning Study 2024,” prepared by SMS Research and Marketing Services, Inc., FSR Consulting LLC and Ward Research, Inc. for the Hawai’i Housing Finance and Development Corporation, Table 39A, p. 124.
