June 23, 2026, 2:30 p.m.
Honolulu Hale
To: Honolulu City Council’s Committee on Housing, Homelessness and Parks
Andria Tupola, Chair
Augie Tulba, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: Bill 18 (2026), CD1 — RELATING TO AFFORDABLE RENTAL HOUSING
Aloha Chair Tupola, Vice Chair Tulba and other members of the Committee,
The Grassroot Institute of Hawaii supports the new proposed draft of Bill 18 (2026), CD1, which would make changes to the Bill 7 affordable housing program.
Specifically, the new draft bill would allow Bill 7 projects to be built in business zoning districts; increase the 20,000-square-foot maximum lot area to 40,000 square feet; clarify that Bill 7 projects can be built to the height allowed by the underlying zoning district or 60 feet, whichever is taller; and repeal maximum square footage rules for different unit configurations.
The draft would also remove proposed additional requirements — mandatory parking spaces, elevators and residential manager apartments in some projects — that would have decreased homebuilders’ flexibility and added costs for eventual tenants.
Currently, Honolulu’s Bill 7 program offers homebuilders relaxed zoning rules, property tax breaks, fee waivers and other financial incentives in exchange for building multiple housing units, at least 80% of which are required to be rented for at least 15 years at rents that would be affordable to residents making 100% or less of the area median income.[1]
The program has been an important tool for city homebuilders trying to produce affordable housing, and the expansions proposed in this bill would add much-needed flexibility for homebuilders interested in using the program to reduce Honolulu’s housing shortage.
After all, a 2024 update to the Hawaii housing planning study estimated that Honolulu needs 27,710 new units built between 2023 and 2027 to keep up with demand.[2]
Bill 18 (2026) also aligns with the city’s 2025-2028 Strategic Housing Plan, which sets a goal to “Identify opportunities for maximizing urban land use through adjustments to density standards in the Land Use Ordinance,” and states that “Enhancing predictability for developers is also critical, with a focus on methods to streamline and standardize processes.”[3]
Likewise, this legislation supports the housing goals laid out in the city’s Primary Urban Center Development Plan.
Policy H-1.3 in that plan aims to “Encourage a greater variety of housing types, including low or middle-density multifamily housing, ADUs and ohana units, mid-rise apartment buildings and shared housing models,” and policy H-2.1 aims to “Expand the supply of income-restricted affordable housing through requirements, incentives and public-private partnerships.”[4]
Grassroot does request that section six of the original draft of Bill 18 (2026) — which would allow more units to be built in projects close to high-service bus stops — be restored in this proposed draft.
That language would advance policy H-1.1 of the Primary Urban Center Development Plan, which is to “Enable and incentivize residential infill development in transit-accessible planned growth areas.”[5]
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] § 32-1.1 Definitions., Revised Ordinances of Honolulu, accessed Oct. 31, 2025.
[2] “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.
[3] “Strategic Housing Plan 2025-2028,” Prepared by the Mayor’s Office of Housing with CommunityScale, January 2025, p. 70.
[4] “Primary Urban Development Center Development Plan,” Honolulu Department of Planning and Permitting, April 2025, p. 158.
[5] Ibid, p. 158.
