A federal law passed in July could nudge Hawaii’s state and local governments to make it easier to build new housing by reforming their zoning codes and adopting preapproved building plans.
All four members of Hawaii’s congressional delegation voted for the sweeping 21st Century ROAD to Housing Act, which made it through both chambers of Congress in bipartisan fashion.
The law aims to boost home construction by changing the two levers that control much of the housing market: land-use regulations and financing.
On the financing side, the law allows loans from the Federal Housing Administration to be used to construct accessory dwelling units and increases the amount of a bank’s capital that can be used for “public welfare investments” such as affordable housing.
In Hawaii, these FHA loans for ADU construction could be valuable. Each county allows the construction of two ADUs per residential lot, and homeowners with space on their property can take advantage of this law to convert a garage into an apartment or build a small backyard cottage.
The ROAD to Housing Act addresses federal regulations directly by streamlining environmental reviews for certain projects, such as those built on previously developed land and the conversion of office buildings to residential use.
It also removes the requirement that manufactured homes certified by the U.S. Department of Housing and Urban Development be affixed with a permanent steel chassis. Some estimates suggest this could reduce the cost of such homes by up to $10,000.
Meanwhile, the law indirectly takes aim at state and local regulations by amending federal grant programs to encourage the reform of land-use, zoning and permitting rules that delay or deny new housing opportunities.
Metro areas that increase home production will be rewarded with additional Community Development Block Grant funds, while areas that lag behind will see cuts.
The new law also sets up a grant program to help local governments create preapproved building plans, which can be helpful in reducing permitting timelines for repetitive projects.
In Hawaii, Hawaii County already offers such plans for single- and multifamily homes, but it is the only county to do so.
In the 2026 legislative session, Hawaii lawmakers in the House and Senate passed resolutions encouraging the Honolulu Department of Planning and Permitting to create such a list of preapproved plans.
Pew Charitable Trusts has a useful explainer of the ROAD to Housing Act here. The entire 140-page law can be read here.
